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Why the YouTube/Viacom Decision is Bad for Business

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In case you missed it while celebrating Independence Day (in a minute, the irony of that will be obvious), Viacom scored a big win off of Google (YouTube's parent company). Judge Louis Stanton, the federal judge presiding over the big one billion dollar copyright infringment lawsuit initiated by Viacom against Google, has ordered Google to hand over some 12 terabytes of data that include it's "viewing log".

That viewing log includes two things: a whole lot of privacy violations and a treasure trove of marketing information.

You can't swing a dead cat on the Internet right now without "stumbling upon" the widespread outrage of the court's decision. The order includes the user names, passwords, IP addresses and registration information of every single person who has ever viewed a video on YouTube. It includes a log of which videos you've watched, how many times and the duration of your viewing.

Other than that, it's all very discreet.

I'll spare you my own diatribe about the death knell of privacy, how Thomas Jefferson and all the other founding fathers are spinning in their graves right now, the chill that should be going up the spine of every person in the world who uses the Internet, etc. There are much better write-ups on all that.

My job is to look at decisions like this through the lense of small to midsize businesses.

Attention small biz and entrepreneurs; as we say in Texas, you gotta dog in this fight!

Viacom is a very, very large media company. It owns CBS, Nick, MTV, Comedy Central, a ton of local TV and radio stations, theme parks, publishing houses including Simon & Schuster, film studios and even the big outdoor advertising company, TDI Worldwide.

In other words, Viacom is all about advertising.

Marketing.

So let's say you're the creative, hungry entrepreneur who comes up with a great marketing video that takes off on YouTube. Here's a great example; Blendtec.

Blendtec makes these industrial strength blenders and has a whole series of videos called "Will it blend?" on YouTube. Most of them are clever and hilarious. One features blending an iPhone, another glow sticks, a tiki torch, video camera, marbles, a baseball, you get the idea.

Some of Blendtecs videos have been viewed more than three million times.

And now Viacom will have all that marketing data on who watched them, for how long, their viewing patterns, what else they viewed on YouTube, what part of the country liked which videos the most, etc., etc. Blendtec doesn't even have this information.

Are we supposed to trust Viacom not to pass on this information to its advertising arm(s). What's to stop them from taking advantage of such precious marketing data the next time the Oster people walk in the door ready to make a million dollar media buy across a variety of Viacom media outlets?

Where will the 81- year old Reagan appointee seating on the bench that made this disasterous decision be should that happen? If a little guy like Blendtec gets run over, how many lawyers can they afford to hire to fight Viacom?

Happy belated Independence Day. I think Lady Liberty has a migraine.

Last updated: Jul 9, 2008




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