YouTube could presumably argue that, legally, it is not responsible for what individuals choose to upload (as long as its user-agreements make clear that they aren't allowed to upload pirated clips). Unlike the file-sharing start-up of the month, moreover, YouTube has the resources to make sure that a court battle drags on for years--at which point Viacom and every other network will probably be paying YouTube for distribution rather than the other way around.
Viacom presumably knows at least the first part of this (and is presumably in denial about the "one day we'll be paying YouTube for distribution" part). So one wonders just how far it will go to force YouTube to remove all the offending content. And in the meantime, of course, it will sacrifice all the promotion and revenue that it would have gotten had it found a way to agree to play ball.
As for YouTube, meanwhile, one wonders whether content removal can be automated--a simple search and delete?--or whether the company will have to hire an airplane hangar full of full-time censors. Either way, even though the Viacom content is reportedly among the site's most popular content, YouTube will obviously do just fine without it. In the world of video clips, Viacom's just a bit player.
UPDATE: YouTube capitulated. Which means Viacom's clip library will now be much less valuable than it would otherwise be (even with no revenue share, the clips no doubt generated some brand value, user familiarity, advertising, etc.) For the sake of users, let's hope the two parties soon kiss and make up.
Anyone know the details of how YouTube removes 100,000 files in one go? Automated or by hand?