Tara Seals Blog: Google-Viacom: IPTV and Cable Can't Keep Ignoring YouTube

Well, well. A federal court handed Viacom its Big Media keister back to it this week, ruling that Google’s YouTube is not liable for copyrighted video posted there by its users. Ah, how the Net neutrality world turns … a $1 billion copyright infringement suit thrown out, just like that. And it gives IPTV and cable yet another reason to start paying attention to the over the top competitor.

There was a bit in the ruling that got me thinking about this: Did you know that every minute of the day, every day, people post 24 hours' worth of videos to YouTube?

I mean, I knew peeps like to get their user-generated and video-share groove on, but posting 24 hours of video every minute — that’s one of those “it has no end!” stats that reminds me, uncomfortably, of the billowing well at the bottom of the Gulf of Mexico. The IPTV and cable guys might want to think about how to get a cap on the video gusher that is YouTube, before the competitive waters become irrevocably polluted. Here’s the biggest tar ball to deal with: mobile video. Forget OTT vs. set-top box. The next battlefront centers on the quad play. Well, it centers on re-jiggering the quad play. And mobile access to home programming isn’t going to cut it, guys.

People will always (well … probably always) take a cable or IPTV subscription for the home. Network owners should be paying more attention to the fact that mobile video is where the next-gen TV revenue will come from, particularly as mobile advertising comes online. Macro forces are helping: 3G and 4G upgrades offer the throughput to support video on the go better. And devices are increasingly video-centric … the iPhone 4 comes with video-blog capability thanks to the new forward-facing camera, a narcissist-ready fact that YouTube’s embedded app will surely benefit from. We’re aware of Steve Jobs’ almost pathological dismissal of Flash (sure, Steve-o, just block the majority of Web video for iPhone and iPad. Awesome. Thanks.). But Adobe is gearing up to launch Flash Player 10.1, which will be available for Android phones running Android 2.2 at launch, with additional platforms coming later.

Also, right now it's crucial to recognize that most successful mobile video comes from outside the Broadcast Establishment; sports offerings from ESPN a lone exception. Users post 24 hours of video every second to YouTube, remember? But network owners can and must change the conversation on that.

YouTube has managed to leverage the licensed content that network owners are banking on as a differentiator. Viacom argues that YouTube's business model depends on free entertainment, which means it needs to have a never-ending supply of content — a need that leads it to make it easy, a little too easy, for users to post copyrighted material without permission. The judge said pshaw: The Digital Millennium Copyright Act’s "safe harbor" provision relieves websites from the duty to check user-generated material before it's posted.

That puts YouTube at an advantage over network owner-sponsored online/mobile video plays like TV Everywhere (Comcast, Rogers) and those from license owners (Hulu, Apple TV); YouTube has no vested interest in making sure its content is legit nor does it have a legal compulsion to do so. And while Viacom’s scrapers are pretty good about catching rogue clips and asking Google to remove them (which Google does, immediately), think about it: Don’t you first go to YouTube to find something, before you go anywhere else? If you want to find a replay of an SNL skit or a scene from last night’s sitcom on YouTube, you probably can, at least for that hot 24 hours after it airs when it becomes a trending topic.

Combine that with the user-generated side of things, its status as an embedded app on the iPhone and general household name status, not to mention ease of use and no need to authenticate to it, and YouTube clearly holds a giant appeal for end users when it comes to online video. Plus that little TV logo is adorable.

Telcos and cablecos need to come up with, to use World Cup lingo, an equalizer. And they need to do it before their metaphorical 90 minutes are up. So far they've tended to ignore YouTube as a lower-caste cousin that a "three-screen" strategy for access to programming anywhere will keep in its place. I, for one, don't think they can continue to do so. They need an interactivity story, they need a user-generated story and they need an ease-of-use story. Meanwhile, YouTube volume continues to gush.