Read the full suit text, which has some entertaining stuff about how YouTube's "friends" function, and here is the statement Viacom released Tuesday morning:
YouTube is a significant, for-profit organization that has built a lucrative business out of exploiting the devotion of fans to others’ creative works in order to enrich itself and its corporate parent Google. Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws. In fact, YouTube’s strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden – and high cost – of monitoring YouTube onto the victims of its infringement.
This behavior stands in stark contrast to the actions of other significant distributors, who have recognized the fair value of entertainment content and have concluded agreements to make content legally available to their customers around the world.
There is no question that YouTube and Google are continuing to take the fruit of our efforts without permission and destroying enormous value in the process. This is value that rightfully belongs to the writers, directors and talent who create it and companies like Viacom that have invested to make possible this innovation and creativity.
After a great deal of unproductive negotiation, and remedial efforts by ourselves and other copyright holders, YouTube continues in its unlawful business model. Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused.
Translation: Viacom doesn't like the deal it has been offered by YouTube, so it is bringing out the big legal stick. Google has almost certainly realized by now this entire business of clips is, despite their best intentions, going to the courts, so this action had real inevitability. Nevertheless, it still has a reasonably high chance of being settled before district court judges get to weigh in, even thought the stakes just went up markedly.
More broadly, this is, of course, dumb on Viacom's part. Having one good place to view content is such better marketing than having to wander all over the web to view thirty-second clips from myriad shows. This is the continuing triumph of hidebound copyright law over marketing, the impact of which will almost certainly continue to be the rise of new grassroots content -- like WallStrip, etc. -- less concerned about redistribution of their content.
As an aside, an interesting snippet from the Viacom suit text stands out. Is GooTube playing infringement favorites?
YouTube’s failure to take reasonable measures to prevent infringement of Plaintiffs’ copyrights stands in stark contrast to the protection which YouTube offers for the content to which it has acquired licenses through various business partnerships with other copyright holders. YouTube’s cofounder and chief executive Chad Hurley has publicly stated that YouTube will use filtering technology to identify and remove copyrighted works for companies that grant licenses with YouTube, but not to companies that decline to grant licenses on YouTube’s terms. By limiting copyright protection to business partners who have agreed to grant it licenses, YouTube attempts to coerce copyright owners to grant it a license in order to receive the protection to which they are entitled under the copyright laws.