Pumped Up On Joost, Viacom Sues Google

Includes: GOOG, VIA
by: Bambi Francisco

If it weren't for Joost - the new television site started by Niklas Zennstrom and Janus Friis - I don't think Viacom (NYSE:VIA) would be so bold.

On Tuesday, Viacom announced that it's suing Google's (NASDAQ:GOOG) YouTube for $1 billion, claiming 160,000 pieces of its content has been viewed 1.5 billion times. Based on a back-of-an-envelope calculation, each video view is basically worth about 65 cents. Is that reasonable? Based on other content arrangements, yes.

Does Viacom have a valid argument? Yes. Does Viacom have a good defense? Unclear, given the DMCA - which gives content service providers, like YouTube a bit of a free pass as long as it complies. Is Viacom playing high-stakes poker? Yep, considering it could strain its relationship with the biggest channel on the Internet.

But Viacom can play a bit of hardball now that it has a wild card of sorts. And, that card is Joost, which Viacom took a financial interest in last month. Joost was started by the two founders of Skype and KaZaA. Clearly, these boys know how to rattle an industry and make compelling products.

Last month, Viacom announced a deal with Joost, in which the media company would allow Joost to distribute shows from Comedy Central and MTV. Both sides will share advertising, as part of the deal.

Would Viacom be so bold if it didn't have a potentially big winner in Joost? "I think that if Viacom didn't have a financial interest in Joost, it would not be so aggressive," said Ian Ballon, an attorney at Greenberg Traurig. Ballon is an expert on copyright law and had represented content owners in the Grokster case.

But not everyone agrees.

"I don't think Viacom is being aggressive because of Joost," said Sameer Mithal, consultant to media and content companies at BusinessEdge. "I think that it's being aggressive because it wants to get a share of the revenue that it feels entitled too."

Ultimately, if Joost isn't at all part of the reason why Viacom is being a bit more aggressive, Joost is getting something out of this. It's gett a lot of press. Just take a look at all the mentions that Joost gets on stories between Google's YouTube and Viacom.