YouTube ad strategy under threat as Viacom brings $1bn lawsuit

by Gareth Jones Marketing 28-May-08, 08:30
LONDON - YouTube's fledgling video advertising service could face 'certain death' should
Viacom successfully sue parent company Google for copyright infringement, according to
experts. Media conglomerate Viacom has brought a $1bn lawsuit against YouTube that, if successful, could scupper the video-sharing site's commercial strategy, which is currently being rolled out globally. Google has outlined plans to recoup the £880m it paid to acquire YouTube by allowing brand-owners to run ads around videos on the site. The service is currently limited to clips from partners, including Universal Pictures, NBC and EMI, but YouTube is widely expected to extend the model to user footage, 10 hours of which is uploaded to the site every hour.However, YouTube may be forced to remove hundreds of millions of clips from its site
if US courts side with Viacom in what could be a landmark case. Analysts believe that this would have a 'serious impact' on YouTube's ability to generate revenue from advertisers keen to tap into its huge global user-base.

'Restricting the amount of video content on YouTube will mean certain death for its commercial model,' said Jim Clark, senior technology analyst at Mintel. Google claims that the suit, which centres on 150,000 'unauthorised' clips, could threaten the free exchange of information via the internet.