KAI RYSSDAL: Shares of the media conglomerate Viacom jumped almost 2 percent today. After the company that owns MTV and Comedy Central made some of its content less available. Viacom ordered the video-sharing site YouTube to take down more than 100,000 pirated video clips. Janet Babin has more from the the Marketplace Innovations Desk at North Carolina Public Radio.
JANET BABIN: A lot of people head to YouTube in search of funny. This week, one of the most popular videos on the site came from “The Daily Show” with John Stewart:
JOHN STEWART: Please welcome to the program . . . Bill Gates.
Stewart’s interview with Gates initially aired on Comedy Central, a paid-TV network owned by Viacom. It was posted illegally on YouTube, likely by a viewer.
Viacom said in a statement that it wants YouTube and its parent company Google to start sharing the ad revenue they get when people watch Viacom shows on the site. Until they do, the clips must come down.
YouTube has revenue-sharing deals with CBS and other media companies. James McQuivey with Forrester Research says it’s likely Viacom was offered a similar deal, but turned it down, because Viacom knows its content is worth more:
JAMES MCQUIVEY: Viacom provides through Comedy Central some of the content that gets the highest ratings on YouTube. And Viacom is saying, “Look, if you’re drawing such a great audience from our content, we want a piece.”
But just as Viacom’s content is vital to YouTube, its shows become even more popular by appearing there. It’s like free marketing. Cardozo law professor Justin Hughes says all the big media companies face a balancing act with their content:
JUSTIN HUGHES: You have to weigh allowing a certain amount of unauthorized use which actually is good for you promotionally, against allowing too much unauthorized use, which starts to cannibalize your own sales.
Hughes says its likely the two companies will continue to try to negotiate a deal.
I’m Janet Babin for Marketplace.
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