While the Internet promotes creativity and diffusion of ideas and entertainment, it has also enabled widespread dissemination of copyrighted materials. This class action lawsuit filed by Viacom International Inc. against Youtube in 2005 details the large-scale infringement Youtube has committed against music, film, and television companies. Although Youtube claims the websites purpose is to provide a forum for "user generated" material, the website contains innumerable copyrighted content. One could view clips from every genre of film or television and music clips from live shows or music videos. The plaintiffs hold Youtube responsible because they have enabled the format for such infringement without assuming the responsibility of monitoring the content. Furthermore, the plaintiffs argue "the availability on the Youtube site of a vast library of the copyrighted work is the cornerstone of the Defendant's business plan." Because Youtube makes significant profit off of these copyrighted works, they leave it to law abiding individuals and copyright owners to monitor the site. Even if the site removes the illegal content once notified, it usually returns to the site within no time. Moreover, Youtube has devised a feature that precludes copyright owners from finding infringing videos.

Viacom holds Youtube responsible because the site "knowingly reproduces and publicly performs the copyrighted works" and allows for extended distribution by enabling one to "embed" a video into another website. Although users are the ones who originally upload the content, Youtube converts the material to their own software format for display and reproduction. More importantly, such websites dissuade people from producing creative works in fear their copyrights will be violated and subject to egregious exploitation. Youtube acknowledges such illegality by sending cease and desist letters to people who provide software that can be used to make copies of Youtube's videos. Youtube sites that such copies are "unauthorized" yet the plaintiffs recognize that Youtube does not want such copies available because they need viewers for their own site to retain advertising revenues. As compensation for Youtube's violations, the plaintiffs order that the defendants device a system to prevent infringement and provide statutory damages for past and present infringements amounting to at least one billion dollars.

This lawsuit directly pertains to my paper in that it shows the legal measures the film industry is taking to combat piracy. Because my paper also focuses on the evolution of the industry in this online world, it is important to note the setbacks such technological develoments have caused for the industry.

This is the case, long awaited, between Viacom and YouTube.  In this case, Viacom makes a number of requests compelling YouTube to release information as well as media and content.  While there are eight motions, they are not all granted; five are denied.  This is interesting, as we must note the reasoning behind Judge Louis L. Stranton’s decisions on July 1, 2008.
    In favor of YouTube, the motion to compel production of search code is denied, and the cross motion for a protective order of the source code is granted.  This is based on the reasoning that such a disclosure would expose a trade secret (that costs thousands of man hours) and that there is no evidence that such a tool could even filter out infringing videos.  The motion to compel production of the source code for the Video ID program is also denied on the grounds that it is also a trade secret and Viacom doesn’t make a significant showing of need.  Also, YouTube claims that they could figure it out by using it.  Judge Stranton does grant the motion to compel production of all removed videos.  Viacom claims that access to all of these files is necessary to identify any infringing videos (but burden of such a task lies on Viacom).   It is also granted that YouTube produce all data from Logging databases concerning each time a video is viewed on the website or on a third-party website.  This passes because of the insufficiency of an IP address to identify personal information.  The motion to compel production of all those data fields which defendants have agreed to produce for works-in-suit, for all videos that have been posted to the YouTube website is denied because “No sufficiently compelling need is shown to justify the analysis of “millions of pieces of information” sought
by this request.”  He also denies the motion to compel production of the schema for Google Advertising databases, but grants for the schema regarding the Google Video Content database.  This is because the plaintiffs have already been promised the only relevant data in the database, they do not need Google’s confidential map of how it runs its advertising business.  Viacom is also denied the ability to access all private videos, except the data related to these videos that is not the actual content.  
    This is essentially the main case that I will use as an example in my paper in determining whether or not YouTube’s business violates copyright laws.  I hope to explore my other sources as well to see if there are any rulings that I do not agree with.  It is important to note that the Judge’s decision is not to shut down YouTube, but to assure that any infringement is addressed, while maintaining YouTube’s ability to function as a unique video sharing network.

            The complaint filed in the case Viacom et al v. YouTube et al, shows the potential harms from digital distribution of content. In the complaint, Viacom contends that not only does YouTube provide a service in which it is possible for users to post copyrighted material, they encourage it and have infringed copyrights for the purpose of promoting and growing the website. The complaint decides to sidestep the DMCA and make a charge based on previous copyright law. They argue that YouTube is not providing the necessary resources to copyright owners to stop infringing material, and that they are purposefully failing to stop the uploading of copyrighted material. This charge contains two important pieces of information for the topic of new media distribution. One, that there is a market being monetized of copyrighted material, and two, that there is rampant piracy and costs with preventing this piracy.

            The complaint makes a strong yet unsubstantiated claim that the majority of web traffic to YouTube is driven by copyrighted material. Anecdotally and unscientifically this does not seem to be an accurate description. Looking at the "Most Viewed" clips on YouTube, the lists are dominated by user generated content. Most of the viral clips that have become representative of Web 2.0 were user generated. The few notable exceptions being Saturday Night Live's Digital Shorts which were promptly taken down by YouTube before being uploaded to NBC.com and Hulu.com by NBC. In this view that is as scientific as the complaint is, it does not seem to hold true that it is copyrighted material that is driving web hits. In addition, YouTube had in place a 10 minute limit to any video clip (albeit for mainly storage limitation reasons) that would have precluded any longform entertainment to be posted.

            This debate brings up the discussion of now three types of new media content. Copyrighted material created for traditional media that is reused in new media, new media created and produced for digital distribution by professional producers, and user generated content. In this case it seems that YouTube is dedicated to being the market leader in user generated content, while allowing other sites such as Hulu.com to be the standard for redistribution of traditional media.

 

Judge Stanton ruled in favor of Viacom in some aspects of his decision and in favor of Youtube in others. In favor of Youtube, he denied Viacom access to Youtube’s search code, noting that it is a trade secret that cost Youtube thousands of man-hours to produce and that it will not help Viacom determine the extent to which Youtube is liable. This decision came after numerous programming experts testified that there is currently no search code in existence with the ability to distinguish between copyrighted and non-copyrighted works. Similarly, the judge denied Viacom access to the Video ID Program. The judge also denied Viacom’s request for access to all videos currently available on the Youtube servers. Viacom claimed this would help them determine how much knowledge Youtube had relating to infringing videos, but Youtube’s response that they have been entirely accommodating to Viacom’s requests was favored by the judge. The judge stated that there is “no compelling need…to justify the analysis of millions of pieces of information.” The judge similarly denied access to the Advertising Schema, stating that this was both a trade secret and not necessary information. However, the judge favored with Viacom in many aspects, in an attempt to allow them to research how much power Youtube has over infringing videos on its website. He mandated that Youtube produce information about all videos that have already been removed so as to determine the amount of copyright infringing videos that have been available in the past. Most interestingly, he allowed Viacom access to all information about who has viewed which videos and how many times they have been viewed. This includes IP addresses, screen names, and videos viewed for every user. Viacom states that this will allow them to know, proportionally, whether copyrighted videos are typically viewed more often or less often than non-copyrighted videos. The judge also allowed Viacom access to the Google Video Content database so as to allow Viacom to determine Youtube’s knowledge of infringing activity.

This decision is interesting because it details the opinions of a judge who has considered both Viacom and Youtube’s opinions. He allows Youtube to retain several of its valuable coding secrets, but makes large concessions to Viacom to allow them to determine Youtube’s knowledge of infringing material. The reason for this decision can likely be linked to the relatively young age of cases like this. The DMCA has only been active for 10 years and many aspects of website liability for users infringing on copyrights are still uncertain. By allowing Viacom access to Youtube video records, the court is essentially hoping that Viacom will either show that Youtube is guilty of indirect liability or that Youtube has no control over the infringement beyond its current efforts. Thus, the impact of this court decision will likely come from Viacom’s analysis of Youtube video information. In my paper, I plan to further examine the same topic: whether or not Youtube is completely free from liability for infringing material.

Mark Cuban, creator of Broadcast.com and outspoken opponent of Youtube, directly compares Youtube to the original Napster website in this blog entry. He attributes Youtube’s quick success to two specific sources: “Free Hosting from any 3rd Party Site” and “Copyrighted music and video.” He goes on to make direct comparisons between Grokster, Napster, and Youtube. Napster was “the first to tell you it [pirating] wasn’t illegal.” He argues that the only reason Youtube hasn’t been brought to court multiple times already is that the studios are not sure what having so many clips available illegally means for them financially. Similarly to Napster, once the lawsuits begin, they will not stop until the service is forced to shut down. He observes that Youtube is remarkably similar to Napster, because users can simply open as many Youtube pages containing copyrighted songs as they want, and then listen to the songs as they would on Napster. Youtube will be hurt not just by lawsuits, but also by the wide availability of copyrighted content in legal online channels, such as NBC making clips available on its own site. Cuban states that as soon as Youtube is sued by copyright holders, it will be forced to find and remove all infringing content. This will leave the site, he argues, devoid of most appealing content.

While Cuban is correct in noting that there is a large amount of copyrighted material available on Youtube, he fails to take into account several key details. First, he states that Youtube will be sued for inducing others to commit infringement, just as Napster and Grokster were sued. Unlike Youtube, however, Napster and Youtube advertised themselves as sites which allowed users to download any music they wanted. They actually did induce users to visit the site for the purpose of downloading infringing material, whereas Youtube encourages users to visit its site to host user-generated content, evident from its slogan of “Broadcast Yourself.” Cuban also suggests that after copyrighted material such as TV shows is widely available in other locations and once copyright holders begin ordering their content to be removed, Youtube would be devoid of any content to set it apart from competitors. However, sites like Hulu, Joost, and services run by major Television studios have been online for over a year and Youtube is as popular as ever. This debunks the argument that Youtube would be unappealing once its copyright material was removed and other legal video-viewing services were established. Rather, users still visit the site for non-copyrighted material, and it continues to thrive, having just signed several deals itself with major content creators and TV Studios. Cuban’s main oversight is in the DMCA. He completely fails to take into account the fact that the DMCA Safe Harbor law removes Youtube from direct liability for any infringing videos that are posted on its service, so long as it removes them upon request of the copyright holder.

On March 13, 2007, Viacom International Inc. filed a class action lawsuit against Youtube claiming massive copyright infringement by the defendant. Viacom filed the suit after sending takedown notices to Youtube demanding over 150,000 copyrighted videos be removed from its servers. In its complaint, Viacom notes “millions have seized the opportunities digital technology provides to express themselves creatively.” However, Viacom argues that Youtube has “harnessed technology to willfully infringe copyrights on a huge scale.” Youtube, the complaint urges, has built a library of infringing video clips in order to increase profit. Rather than attempting to remove all infringing videos, Youtube “has decided to shift the burden entirely onto copyright owners to monitor the Youtube site…to detect infringing videos and send takedown notices to Youtube.”  Viacom claims that Youtube increases its own value at the expense of copyright holders through the following methods: displaying advertisements above infringing videos, allowing users to embed infringing files onto other websites to draw users to Youtube and subsequently increase ad revenue, and permitting users to keep copyrighted videos hidden from the public. Viacom also notes that Youtube hosts the videos on its own servers, rather than simply acting as a conduit through which users pass files. This, in Viacom’s interpretation, makes Youtube the primary copyright infringer as it is the entity that is actually “performing” the copyrighted footage.

Youtube is one of the more influential websites in the development of Web 2.0. The website has essentially ushered in a new age of internet democratization by giving all users the ability to create and host content. Viacom’s complaint fails to take several important copyright issues into account, however, decreasing the lawsuit’s validity in several key issues. First and foremost, it assumes that Youtube has a clear intention of hosting copyright infringing content. While the court decided that Grokster, in MGM Studios v. Grokster, did not have sufficient non-infringing uses to escape liability, Youtube was developed as a website where average internet users can upload home videos. When asked about a memory associated with Youtube, users will typically discuss a humorous home movie they saw rather than an illegal movie clip. Similarly, Viacom assumes that Youtube is responsible for policing its site for all copyrighted material, failing to mention the DMCA once in the lawsuit. The Safe Harbor clause of the Digital Millennium Copyright Act, however, removes service providers from liability for any copyrighted material that users upload to their servers, specifically if the content provider removes material that a copyright holder insists is infringing. Youtube immediately removes material upon receipt of a takedown notice, typically without even ensuring that the entity which issued the notice is actually the copyright holder. Youtube is similarly protected by the Inducing Infringement of Copyrights Act, which protects sites which do not induce others to commit copyright infringement. Rather, Youtube encourages users to produce their own works.

In early 2007, Viacom sued Youtube for extensive copyright infringement. Youtube claimed protection under the Safe Harbor law in the Digital Millennium Copyright Act, but arguments still abound regarding the extent to which Youtube is liable for copyrighted files uploaded to its servers. In my paper, I will attempt to answer that question: how liable is Youtube for copyright infringement committed by its users and what can it do to ensure protection from further liability? I will begin my bibliography, and my paper, with the original Viacom lawsuit, followed by articles detailing the emergence of the DMCA. I will then cite several articles and cases arguing both for and against Youtube's innocence. This will be followed by several examples of steps Youtube can take to shield itself from liability. I will finish my argument by citing the judge's decision in the Viacom case, which still fails to offer a definitive answer of whether or not Youtube is liable for infringement.

    This article written by Lawrence Lessig, a professor at Stanford University, sees Viacom’s lawsuit against YouTube as preempting Congress’ preeminent role in determining copyright law.  Lessig cites to case law and the Constitution to conclude that sound policy and history support deference to Congress when major technological innovations alter the market for copyrighted material.  He opines that Viacom is trying to play an end run around Congress and the 1998 Digital Millennium Copyright Act (“DMCA”) with its lawsuit against YouTube. 

    He explains that the DMCA was intended to protect copyright owners while making it possible for internet service providers to avoid crippling copyright liability.  It achieved this result by immunizing the internet service provider from liability for infringing material posted by its users as long as it removed the infringing material upon notice by the copyright holder.  According to Lessig’s article, the statute expressly places the burden of policing content on the copyright holder and not on internet service providers like YouTube.  Through its complaint, Viacom is trying to shift that burden onto YouTube. 

    Lessig claims that Viacom, not satisfied with a Congressional statute, is turning to the courts to “update the law.”  According to this article, it is not the role of the courts, but rather the role of Congress to modify the DMCA’s safe harbor provision.  He states that Viacom’s lawsuit will result in the internet facing years of uncertainty in litigation and possibly undermining the intent of Congress to forge a cooperative relationship between copyright holders and online service providers through the DMCA’s statutory framework. 

    The underlying assumption in this article is that YouTube will have a valid defense under the DMCA to Viacom's claims of infringement.  This paper will critically analyze Lessig's fundamental assumption that the DMCA provides a viable defense for YouTube.  An important part of this analysis will be Lessig's argument that the court should defer to Congress.  Specifically, the paper will keep in mind Congress' intent in enacting the DMCA and its balancing of the rights of copyright holders with the need to protect internet service providers who are the pioneers of an emerging means of communication.

       This law review article written by Jason Breen from the UCLA School of Law analyzes YouTube’s defenses to the Viacom lawsuit and, in particular, the safe harbor provisions of the Digital Millennium Copyright Act (“DMCA”).  The article examines each of the requirements mandated by the DMCA and how those requirements have been interpreted by the courts.  It also points out where some of the court decisions appear to be inconsistent. 

       This article examines requirements of the DMCA that YouTube must meet in order to qualify for safe harbor protection.  First, the author reviews whether YouTube accommodates “standard technical measures” used by copyright owners to identify their copyrighted works as required by section 512(i) of the DMCA.  Second, as the protections of the DMCA are only available to qualified service providers, this article examines whether YouTube will qualify as a service provider and notes that the courts have broadly interpreted this provision.  Third, YouTube must establish that it does not have actual or apparent knowledge of the infringing material.  By providing a plethora of cases, the article concludes that the high standard of proving the provider has the requisite knowledge would likely weigh in YouTube’s favor.  Fourth, according to the article, a more difficult hurdle for YouTube to meet is the requirement that YouTube not receive a financial benefit directly attributable to the infringing activity where it has the right and ability to control such activity.  The article points out two conflicting lines of judicial reasoning regarding this two-part test.  Using citations provided by this author and after reading several of these cases (some of which are included in this Annotated Bibliography), I can address in my paper how these conflicting theories might impact YouTube’s defense under the DMCA. 

       The author concludes that it is likely but far from certain that YouTube will be able to avail itself of the DMCA’s safe harbor in light of the uncertainties in the law and factual questions as to YouTube’s operations.  This article is helpful in analyzing YouTube’s operations, Viacom’s allegations, and in providing citations to court decisions which I will read and apply to the facts of this lawsuit in order to make my own judgment as to whether YouTube should prevail under the safe harbor provision of the DMCA.

In March 2007, Viacom filed a lawsuit against YouTube based on YouTube's direct and secondary infringement of Viacom's copyrighted material. YouTube denied Viacom's allegations and argued that it is protected under the 1998 Digital Millennium Copyright Act (DMCA) which Congress promulgated to provide a safe harbor to shield on line service providers from monetary damages or injunctions for infringing material posted by their users. In enacting the DMCA's safe harbor provision, Congress devised a statutory framework in which copyright holders and service providers could cooperate, thereby maximizing creativity - an underlying goal of copyright law. The Viacom lawsuit sets the stage for a battle between copyright holders and service providers of user generated content. Thrust into the middle of this battle is the court which must determine whether YouTube meets the requirements of the DMCA's safe harbor provision. My paper will address the question of whether or not YouTube will meet the requirements of the DMCA's safe harbor provision, taking into account Viacom's arguments and YouTube's counter arguments as applied to the statute's language and legislative history and the surrounding case law.

       This law review article analyzes whether or not YouTube will be able to defend itself against Viacom’s claim of copyright infringement under the safe harbor provisions of the Digital Millennium Copyright Act (“DMCA”).  The author examines the case law concerning the specific requirements of the DMCA including: 1) qualifying as a service provider; 2) the actual or apparent knowledge test; 3) the direct financial benefit test; and 4) the ability to control the infringing activity test.

       What is particularly helpful to my paper is that the author provides extensive information on YouTube’s business operations.  The article details the automated and user generated nature of YouTube’s site which is relevant to the DMCA’s knowledge and control tests.  It also provides a discussion of how YouTube generates revenue.  An analysis of YouTube’s revenue stream is relevant to the financial benefits test required under the DMCA.  The article’s discussion of YouTube’s business will be relevant to analyzing whether YouTube should meet the DMCA threshold and core requirements, which are fact dependent.

       The author opines that the site’s easy to use technology provides a ready platform for showcasing original and transformative videos.  Against this backdrop of user creativity, it is clear that YouTube’s website also contains unauthorized copyrighted works.  However, the author provides evidence of YouTube’s good faith efforts to run a legitimate business not premised on the unauthorized use of copyrighted works.  Such information is pertinent to an overall sense as to whether YouTube’s purpose is to simply pirate other companies’ videos or to provide a venue for sharing new and original video content.

       The author concludes that given the uncertainties surrounding how the court may interpret the various requirements of the DMCA, it is unclear whether YouTube will be afforded safe harbor protection.  For the purpose of my paper, this article will be helpful in providing factual information as well as citations to various court decisions which I will read and analyze so that I can reach my own conclusions concerning the application of the DMCA to YouTube.

       This article written by Michael Fricklas, general counsel at Viacom, sets forth Viacom’s legal and factual arguments supporting its position that YouTube should not be afforded safe harbor protection under the Digital Millennium Copyright Act (“DMCA”).  First, he argues that YouTube is not the kind of entity envisioned by Congress in enacting the DMCA.  YouTube, he claims, is more than a storage service provider; it is an entertainment destination.  Second, Viacom’s attorney claims that YouTube’s policies with regard to infringing content are selectively implemented with more proactive action given to companies in which it has a licensing agreement.  Third, the rampant unauthorized copyrighted material on YouTube demonstrates that it has the requisite knowledge of infringing activity.  He cites as further support for a finding of knowledge the fact that YouTube creates a list of “featured videos” on its home page.  Fourth, Mr. Fricklas states that YouTube receives a direct financial benefit from infringing activity.  He contends that infringing content generates popularity and more viewers which increase advertising revenue.  Fifth, he asserts that YouTube has the ability to control content.  As evidence of this fact, Mr. Fricklas states that YouTube’s managers remove pornography.  Finally, as a policy matter, he claims that requiring copyright owners to patrol the web on an ever burgeoning number of sites would be unfair.  Forcing YouTube to obey copyright laws would not stifle innovation.  Instead, Viacom’s attorney argues that protecting intellectual property spurs investment and thereby the creation of new technologies.  It is, therefore, critical that the law ensure that YouTube respect the rights of copyright owners, like Viacom.

       Mr. Fricklas’ arguments are, of course, partisan.  However, they shed light on Viacom’s perspective and the facts that it may rely upon during the lawsuit.  The article also crystallizes some of the hurdles that YouTube will have to overcome if YouTube is to receive safe harbor protection.  In reaching my conclusion as to whether YouTube should meet the DMCA’s requirements, it will be necessary to present and analyze Viacom’s arguments.  This article will be helpful in that regard.

This is the actual case in which Viacom filed an amended complaint, seeking punitive damages in addition to the statuory damages originally requested in the March 13, 2007 case.

In reference to my project, this provides an update to the ongoing case of Viacom v. Youtube. The request to amend for additional damages was denied. It was ordered that punitive damages could not be recovered in accordance with the Copyright Act.

Viacom Inernational Inc.v. YouTube, Inc. No. 95-02103. Southern District of New York District Ct. of the US. 7 March 2008.

This article recounts the early days after the decision was announced to break Viacom into two separate companies (one cable, which would be a growth stock, and the other broadcasting, which would be a value stock). Simply put, Sumner Redstone’s acquisition strategy was not nearly as successful as he had expected it to be. Indeed, it has failed. But, that does not mean that the split is welcomed with open arms and rave reviews on the part of Wall Street analysts.
The main logic behind the split up is that sprawling conglomerates become dragged down by their own size and that expected synergies often do not occur because of management struggles or clashes of corporate cultures (see chapter 11, pages 233-235 of Media Economics, Theory and Practice for a great example of this).

This article focuses on CBS’s measures to assure investors that it is prepared for the new digital age and will remain profitable even as the ways in which consumers consume media radically change. The broadcast network is focused on creating new revenue streams from video-on-demand, internet sites/portals, and more diverse program offerings on other channels that are not dependent on advertising (except in the internet case) and are more amenable to consumers’ new tendency to watch TV when and where they desire. Part of the problem that traditional broadcast networks have been having is that their content is regarded as having a different value for cable carriers than those stations that exist exclusively on their medium. This weakens broadcast newtorks’ bargaining position, for they are not regarded as having the same economic structure. In some senses, CBS (along with all other major networks) is seeking to change that by reconstructing its business model.

Important quotes:

“The shows will cost 99 cents each, and will be available in areas where CBS owns TV stations and Comcast provides digital cable. The deal bears some similarity to recent agreements NBC and ABC have struck with DirecTV and Apple Computer. All are meant to adapt the business model of a broadcast television network to changing technologies and viewer habits, and find additional ways to be paid, beyond the advertising that has been broadcasting's sole source of revenue."

"But unlike NBC and ABC, which reside inside the conglomerates General Electric and Walt Disney and have sizable cable network siblings, CBS has an extra incentive behind its digital hustle: the split-up of Viacom. The breakup will leave the CBS Television Network as the centerpiece of a new CBS Corporation, which will include 40 television stations, the UPN network, the radio group Infinity Broadcasting, Showtime, Simon & Schuster and the Paramount Television production business. The rest of the company, which includes the fast-growing MTV Networks cable channels, BET and the Paramount Pictures film studio, will continue under the Viacom name.”

This article does not specifically talk about media companies, although it does mention them in the context of the current waves of spin offs and having conglomerates split up after not realizing the promised synergies before the mergers.  Indeed, there seems to be a penalty for conglomerates right now, such that the sum of the parts is probably worth more.  The idea behind many mergers was that the companies together would be more valuable than their individual assets added together, although it has since been proven that that is not the case.  According to Media Economics, Theory and Practice, 75% of all mergers and acquisitions fail to deliver on promises made to investors.

This article, published in early November 2005, focuses on the fiscal woes of the large media companies.  Even though many of them were not hemorrhaging money, their stocks had been seriously underperforming: since August, most stock prices were down between 6 to 17 percent at a time when the major indexes had lost only a handful of percentage points.  The main argument is that even though the major media companies (including the conglomerates such as Viacom and the more focused newspaper companies such as Knight Ridder) had been shaking up and revitalizing their business models to prove that they were ready to capture new markets in the evolving economy, many institutional investors were not warning up to their actions and plans.  Indeed, you could even say that there are some corporate civil wars going on in board rooms.  The article specifically mentions that a large shareholder of Knight Ridder wants the company to put itself up for sale, and it makes a reference to Carl Icahn’s efforts to get Time Warner to divest itself of some of its assets to begin a large stock buyback program (since the publication of this article, Carl Icahn has become even more confrontation when dealing with Time Warner’s current board of directors and management).  The writer does not mean to say that all media companies are having trouble, for Google and Apple have been steadily increasing for quite some time (the continue to do so).  Rather investors are not feeling the least bit sanguine when it comes to traditional ‘big’ media companies.  Perhaps they are all just dinosaurs waiting to be extinct.

Here are two interesting and important quotes from the article:

”Beyond those concerns, they worry that with slower advertising growth, the profitability of media properties like television and radio stations could be affected. And even if the ad market were to become robust again, just how many of those dollars might flow to the Internet and away from traditional media is an open question.”

And

''There is a buyers' strike,'' said Dennis Leibowitz, general partner at Act II Partners, a media hedge fund. ''People are afraid to touch the old media. No matter how cheap they have gotten, people are fleeing. The environment is scaring them, and they can't figure it out.''

Bagdikian works to expose the monopolistic practices of the media industry. He specifically focuses on the big five (Time Warner, Disney, Bertelsmann, News Corporation, Viacom) and how they act together like an oligopoly or cartel. One of the main issues is that they work together on joint projects that prevent them from being true competitors.

He also looks at the monopolies in other media areas, specifically newspapers. He examines the ways in which newspapers are run without true competition in local markets and the self-censoring effects of advertising (for a more in-depth analysis, I recommend Professor Baker’s books).

Another problem that becomes apparent is the conglomerate nature of these corporations and the fact that advertisers and interest groups can leverage their power against one facet of the conglomerate to create change in another (boycott ads in one periodical to protest an article in another in which the advertiser does not place its ads).