Google's YouTube to Remove 100,000 Videos From Viacom
|YouTube, the video-sharing site owned by Google Inc., agreed to remove more than 100,000 clips produced by Viacom Inc. after they were posted without permission.
Viacom asked to have the videos removed because YouTube was unwilling to reach a ``fair market agreement'' to compensate for using the content, New York-based Viacom said in an e-mailed statement today. Google said it would comply with the request.
The clash highlights the challenge San Bruno, California- based YouTube faces from media companies, which say the site is gaining popularity from content at their expense. Though YouTube promised to use software to filter out unauthorized clips, it has yet to do so, Viacom said in the statement.
``Viacom is obviously unhappy about what Google has offered,'' said Greg Sterling, an analyst at Sterling Market Intelligence in Oakland, California. ``This is an effort to ratchet up the pressure on Google.''
Shares of Google fell 25 cents to $481.50 at 4 p.m. New York time in Nasdaq Stock Market trading. They have risen 4.6 percent this year.
``It's unfortunate that Viacom will no longer be able to benefit from YouTube's passionate audience,'' YouTube said in a statement about removing the clips. ``We take copyright issues very seriously.''
Viacom owns MTV Networks and Nickelodeon and is controlled by billionaire Sumner Redstone.
YouTube said in the statement that it prohibits users from uploading material that infringes copyrights and that it removes unauthorized content when notified.
Compensating content owners for the material that appears on video sites such as YouTube and Google Video may push up Google's costs. Chief Executive Officer Eric Schmidt said on an earnings conference call this week that he will continue to invest in advertising and Web content this year.
The company said when it bought YouTube in November that it set aside more than $200 million in stock from the $1.65 billion purchase price to protect against lawsuits.
``Bottom line, we think Google pays up now, in the early days,'' Ben Schachter, an analyst at UBS AG, said today in a note. ``We think that it's an excellent use of capital, though it may pressure margins.''
Under copyright law, YouTube is obliged to take down unauthorized clips within a ``reasonable'' period of time, said Helene Freeman, an intellectual property attorney at Dorsey & Whitney LLP in New York. Otherwise, YouTube can be liable for damages.
Content owners have asked for material to be removed from YouTube in the past. Last month News Corp.'s Twentieth Century Fox Film Corp. obtained a court order to force YouTube to identify a subscriber whom Fox said posted pirated copies of its television shows such as ``24'' and ``The Simpsons.''
Still, media companies see YouTube as a means to promote their content and reach young consumers, who are spending more of their time online.
YouTube last year brokered licensing agreements with music companies including Warner Music Group, Universal Music Group and Sony BMG Music Entertainment. The company also is showing news, sports and entertainment clips from CBS Corp.
``To some extent it is vital marketing,'' Freeman said.