Saturday, November 10, 2007

Sumner Redstone: YouTube Won't Pay The Rent

At the Dow Jones and Nielsen Media and Money conference in New York today, Viacom and CBS chairman Sumner Redstone pulled out all the stops in defending the sanctity of copyright. "If content is king, copyright is its castle," he reportedly said. "Copyright compels creativity, it furnishes the incentive to innovate. If you limit the protection of copyright, you stifle the expression of self."

The 84-year-old Redstone, whose company is in the midst of a lawsuit against Google's YouTube seeking $1 billion in damages for what it terms "massive intentional copyright infringement," was coy about the video sharing site, but did make some pointed remarks about what he thinks of YouTube's current business model. "Think about it: You cannot pay the rent posting videos on YouTube," he said. "And most aspiring novelists do not aspire to self-publish. You cannot make it as a musician, you can't make it as a filmmaker or a writer without ... effective and enforced copyright legislation."

Redstone, though, does see a future for monetization of online content via advertisements. "Advertising will pay the way," he told the crowd.

While I don't think I agree that looser copyright laws will lead to the demise of creativity, Redstone makes a fair point about the importance of control for media creators. Without control of distribution (and thus compensation), media producers simply can't afford to continue creating quality content. The content creator deserves to be compensated for the consumption of content no matter where it takes place -- especially if someone else is making money from it.

On the other hand, content producers need to be more accommodating of changing consumer viewing habits. More and more people are getting video, audio, and textual content online, or doing things like timeshifting television programming with Tivo. Big media needs to get on board and realize that consumers want to be able to view their media whenever and wherever is most convenient for them. Giving consumers a choice of where and how to consume media would be beneficial to media producers in the long run.

The problem for media companies, though, is that even with explosive growth of online advertising, it likely can't match the profits they get from other mediums. The Law & Order franchise, for example, reportedly rakes in over $1 billion in profits from rerun licensing rights, DVD sales, and overseas licensing. That's a lot of money that content producers might feel hesitant to potentially cannibalize by bringing content online.

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