Big media beats up on YouTube

NEW YORK (CNNMoney.com) -- Big media, like a bully envious of the popular new kid in school, is starting to pick on YouTube. But will the tough talk from media moguls actually lead to significant changes at the top video sharing site?

Earlier this month, Viacom (Charts) demanded that the number-one online video site, now owned by Google (Charts), take down pirated clips from shows on Viacom channels such as Comedy Central and MTV. YouTube responded by removing more than 100,000 videos.

YouTube, co-founded by Steve Chen and Chad Hurley and now owned by Google, has come under fire from media companies for not taking down copyrighted videos in a timely fashion.

Jeff Zucker, the new chairman and chief executive officer of General Electric's (Charts) NBC Universal unit, also took YouTube to task this week, saying that YouTube needs to do a better job of filtering copyrighted clips and notifying media companies when their content is posted on the site.

And in a speech in New York Thursday, News Corp. (Charts) Chairman and CEO Rupert Murdoch said that although he didn't necessarily mind when small snippets of shows from his company's Fox TV network wind up on YouTube, he did have an issue with entire episodes of programming being posted without Fox's consent.

But will a crackdown on YouTube make the site less popular? Some industry experts are doubtful.

Keith Richman, chief executive officer of Break.com, a rival online video site that caters to young men, said that sites like YouTube can still thrive without mainstream media clips since average users are also submitting many popular videos.

"If you remove the best well-known content from YouTube, it will create a void in the system. But does that mean YouTube is going away? No. They have many very talented content creators posting to the site," Richman said.

He conceded, however, that big media firms need to be tough on YouTube and other sites.

"Media companies have to nip piracy in the bud. It's wise of them to take a stand," he said.

Plus, mainstream videos may be gone from YouTube only temporarily. One industry analyst said that the major media conglomerates probably aren't looking to kill YouTube the way that music companies crushed the old Napster, which relied on illegal file sharing.

"It seems like the media companies are all emboldened by one another, but it's not like they ganged up intentionally," said James McQuivey, a television and media technology analyst with Forrester Research. "They don't really want to see an end to millions and millions of eyeballs seeing their content. Any media company would be a fool to say I don't want my product and brand in front of millions of customers."

Others see big media's attack as simply a public negotiating tactic, talking tough with YouTube in order to ensure they get paid for the posting of copyrighted content, either in usage fees or a cut of any potential advertising revenue. The media companies clearly underestimated how rapidly online video sharing would catch on and are now trying to cash in.

"User adoption was so quick in online video and the market takes time to adapt. The media companies that are going after YouTube just want to be part of the incredible revenue stream," said Tariq Krim, chief executive officer of Netvibes, an Internet company based in Paris that allows users to customize their homepages.

For media companies, YouTube clearly represents a threat. The major television networks are offering many of their top-rated shows online for free after they air online. And the big media firms are investing heavily in their own broadband video sites.

NBC, for example, has launched its own online comedy channel called Dotcomedy while Viacom has acquired video sites iFilm and Atom Entertainment in the past few months. And News Corp. owns the social networking site MySpace, which has quickly emerged as the number-two video site behind YouTube.

But it's worth noting that one media company, CBS (Charts), has not taken any recent shots at YouTube. In fact, CBS announced a partnership with the site last October in which CBS would share revenue generated from advertising that is placed around any CBS content that is posted on YouTube.

CBS, however, also has its own broadband site, Innertube. So clearly, some media companies think that their own sites can peacefully co-exist with YouTube.

To that end, Break.com's Richman said media companies do need to realize that even though YouTube is the clear leader in online video, this doesn't mean that consumers won't go elsewhere to view videos as well. "People will watch multiple channels," he said.

So even though media companies may prefer that more viewers go to the sites that they created, McQuivey thinks YouTube is going to remain a key ally for media companies since it can provide them wide exposure to younger Web users, a key demographic that advertisers covet.

"Media companies think YouTube has been a little cavalier and needs to be more respectful of content ownership. But this won't be a disaster where everyone pulls out of YouTube," he said.

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