Why is this irrelevant?
- Because if Google takes the next logical step and goes through the motions of fighting the lawsuit, the companies will be in court for years. (During which time Viacom's content will become less relevant and YouTube's platform will become more powerful.)
- Because $1 billion in damages is absurd. Viacom wants headlines--and is getting them.
- Because $1 billion is also chump change in this league. (The injunction is potentially more problematic, but would likely just force YouTube to do what it will eventually have to do anyway--develop better ways of monitoring what is on the site).
- Because the lawsuit is just another negotiating move and will disappear when the companies finally come to terms.
Why won't the Viacom lawsuit shut down YouTube the way the music companies shut down Napster? First, because the resources Google can draw on to defend itself are about a million times as big as Napster's were. Second, because Google already has plenty of real distribution agreements with other real media companies that will view the Viacom fusillade as a chance to gain online market share. (These media companies are not likely to suddenly switch sides and team up with Viacom.) Third, Viacom doesn't really give a damn how many people watch its content on YouTube--they just want to get paid what they view as a less-insulting amount for the use of that content.
The bottom line: If/when Google finally makes a concession or two, Viacom will declare victory, and the lawsuit will disappear. Then, a couple of years later, when every media company in the world has a distribution deal with Google and Viacom's content is even less of a percentage of total views than it already is, the deal will get renegotiated on more favorable (to Google) terms.