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This is a copy of the lawsuit Universal filed against MySpace on November 17, 2006, in the United States District Court of Central California. In the suit, Universal claims that MySpace is guilty of copyright infringement. Universal claims that the songs and music videos shown on MySpace are done so illegally and without permission from copyright holders. Universal uses Jay-Z as an example in their case against MySpace, saying that songs from his new CD, "Kingdom Come", are available on MySpace even though, at the time the suit was filed, the record had not been released. Universal says that MySpace is well aware of the copyright laws that it is breaking and continues to support the "user-stolen"content distributed on the site. They also say that MySpace knows that they don't have a liscense from the copyright holders of the songs and videos it distributes. The proof, says Universal, lies in the agreement each MySpace user makes with the site that gives MySpace control over what can be done with the content. Universal says that MySpace knows that these are not the real copyright holders, and yet continues to show infringing content without permission.
This case is extremely relevant to the YouTube copyright discussion. First off, it could convince MySpace and other similar sites to follow YouTube's lead and strike revenue sharing deals with major studios. The YouTube business model would then be seen as a blue print for similar companies, and this in turn would help shield YouTube and other sites from future lawsuits. However, this case could end up hurting YouTube. Universal claims that since MySpace edits and posts much of the content on the site, they are knowingly infringing upon the copyrights of the videos and songs available on their site. Although YouTube's users do much of the posting and editing, YouTube itself still edits user content. If the courts buy Universal's arguments, YouTube could be in grave danger of future lawsuits.
Peter Fader of Wharton called the agreement between Warner Studios and YouTube, which allows Warner music videos to be played on YouTube in return for a portion of the ad revenue, the "single biggest business development deal in the history of digital media". Internet mogul and Dallas Mavericks owner Mark Cuban, on the other hand, believes that YouTube will ultimately have the same fate as Napster and be crushed by copyright lawsuits. The real answer may lie somewhere in the middle.
The article mediates a debate between naysayers, such as Cuban, and optimists, like Fader, over what the fate of YouTube will be. Cuban states that YouTube is "in the same boat as Napster". He argues that although YouTube may do a lot of good things for copyright holders, such as the promotional benefits, it will not be enough to make every single copyright holder happy. Cuban notes that it would only take one successful lawsuit against YouTube to bankrupt the company. Fader, on the other hand, suggests that the Warner deal could lay the groundwork for future deals between YouTube and other major Hollywood studios. His prediction seems to be right on the money. Since this article was published, YouTube has made agreements with CBS, the NHL, NBC, and most notably, Universal Studios, which had previously been YouTube's most outspoken critic.
Also discussed is the significance of the agreement between Warner and YouTube. Fader notes that this agreement represents a sort of paradign shift, mentioning that Warner took a completely opposite stance when it was fighting Napster in court. Also, the agreement sets a trend for other companies to follow suit. This prediction by Fader was also proven true with the new YouTube agreements mentioned earlier. Fader also predicts that these deals will allow YouTube to "call the shots" in the video industry, much the same way Google runs the search industry.
The debate in this article is the fundamental issue regarding YouTube and its legitimacy. It is important for YouTube to secure protection from copyright lawsuits, and they seem to be doing that with recent agreements and their willingness to takedown copyrighted material. However, Cuban's view does hold true that one lawsuit could cripple the company, and that lawsuit could be Tur v. YouTube. The ruling of this case and others like it may ultimately determine YouTube's future.
Cox describes the deal struck between Warner and YouTube. Warner agreed to post its entire catalog of music videos on the site, while YouTube agreed to share any ad revenues gained from these videos, as well as the "65,000 daily submissions which incorporate Warner music." The CEO of Warner is quoted in this article as saying basically that technology is changing and that Warner needs to adapt to these changes. The article also brings up some of YouTube's arguments on why their business model is legal, while Napster's was not. YouTube's founders argue that, unlike Napster, the site knows exactly what material is being posted and that they are willing to take down any material that infringes upon copyright. The article also notes that YouTube is a great place to publicize videos, TV shows, songs, and other forms of entertainment. Cox points to the example of "Lazy Sunday", a Saturday Night Live skit that became immensely popular because of YouTube and led to a resurgence in Saturday Night Live's ratings.
One of the interesting things about this article is that, although it was only written about two months ago, it is already very outdated. It talks about the problems companies encounter when suing YouTube, noting that the company doesn't really have millions in capital to sue for. That is no longer the case after Google's $1.6 billion aquisition of YouTube. It also quotes a Universal representative as saying that YouTube infringes on copyright and is an illegal site. This is no longer Universal's position, being that they, like Warner, recently reached a revenue sharing agreement with YouTube. This article demonstrates how quickly YouTube is moving in its attempts to be seen as a legitimate, legal business.