Google CEO Eric Schmidt has denied a rumor that his company set aside as much as $500 million dollars as part of its recent YouTube acquisition to defend against copyright claims from movie studies, TV networks, and music companies.
The rumor began when Mark Cuban, Internet billionaire, owner of the Dallas Mavericks, and avid blogger, reposted the work of an anonymous blogger to his own blog, where it quickly drew attention. The anonymous writer claimed to offer an inside account of the Google/YouTube deal, saying that Google had put aside a deep pool of cash to placate copyright owners whose movie clips and commercials had appeared on YouTube.
No evidence was offered to support the claim, which has to its credit only Cuban's assertion that "it rings true" and that he trusts the source.
In an interview at the Web 2.0 Summit held in San Francisco this week, Eric Schmidt, Google's CEO, called the rumor false, but said that Google had approached a wide range of media companies to strike deals that would insulate the Mountain View-based search engine company from lawsuits.
Ado About Nothing?
Is the much publicized (and much hyped) rumor merely a fanciful blog post? No one has sued Google over YouTube as of yet. And David Card, vice president and senior analyst at Jupiter Research, said that Google and media groups are simply "negotiating in public."
What's more, Google might have certain protections against copyright owners who smell a settlement, because the DMCA, or Digital Millennium Copyright Act, protects Web site owners who display copyrighted content if they remove it promptly when requested.
But Card was quick to note that issues like these are complex, the rightful province of lawyers and other experts.
Hype or Harm?
Card questioned the degree to which copyright infringement -- a la YouTube -- harms the copyright owners.
"There's the issue of whether this distribution cannibalizes or helps your business," he said. On the Web, where content can spread like kudzu, sites like YouTube and Microsoft 's Soapbox offer networks, producers, and even actors free publicity.
But Card also noted that some content owners could indeed suffer from what's commonly called "viral" distribution on these sites. "It depends on whether you think music videos are, by their nature, a licensing business or a promotion business," he said. "Not all that long ago, the record companies didn't get any money from MTV."
They recently have, according to Card, meaning that they might start looking to YouTube and other sites for more than mere hype or buzz. They might look for revenue.
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