We just wrote about how major Hollywood studios had included links to the freely available, Creative Commons-licensed documentary, TPB AFK, in a bunch of bogus DMCA notices to Google, meaning that perfectly legitimate links were likely being removed. The director of that film, Simon Klose, has now responded with an open letter in the form of a video, where he notes that this is a clear violation of his free speech. He points out that there are basically two possibilities. First, that these studios are purposely trying to censor a film about The Pirate Bay, which highlights the civil liberties questions raised by the studios legal pursuit of the founders of the site, and second, that their technology for finding infringing content absolutely sucks. He points out that neither of these situations is a good one. The first one sounds crazy, but, as he notes, not quite as crazy as some of the things that were revealed in the film, such as Warner Bros. hiring the lead investigator in the case while the investigation was still ongoing. But even if it was an accident, that doesn't change the fact that his legitimate content was being blocked from Google, and he considers it a free speech issue.

We see so many bogus DMCA takedowns, and we hear the big copyright holders insisting that it's just an accident each and every time -- and not to worry about the collateral damage and censorship it leads to. So it seems interesting that TorrentFreak has uncovered a series of bogus DMCA takedown notices to Google from four different giant Hollywood players -- Viacom, Paramount (owned by Viacom), Fox and Lionsgate -- that each ask it to remove links to Simon Klose's excellent documentary about The Pirate Bay TPB AFK. As TorrentFreak notes, Fox, via DtecNet (another total failure for the "six strikes" company), asked Google to remove a link to the movie on Mechodownload. Viacom asked for links to be removed to the movie on Mrworldpremiere and Rapidmovies. Lionsgate asked for to remove a link to the movie from The Pirate Bay of all places. Needless to say, all of these were authorized copies that the movie studios were seeking to have hidden.

Beyond the obvious concern about censoring a movie that shows, perhaps, a more sympathetic side of the TPB crew and their legal situation, these kinds of take downs serve another, more nefarious purpose: making sure there is less value for authorized works on these various sites. You hear it all the time from these companies that these sites are "all bad" and must be taken down. Having authorized content really looks bad, so it's nice for them that they can remove it by filing bogus DMCA claims with no real recourse. No wonder the MPAA is so vehement that it shouldn't need to consider fair use before sending bogus takedowns.

Yes, I'm sure these were all just more "accidents" but the impact is very real. For struggling filmmakers like Klose, having authorized copies of his film removed from Google has a serious impact. Copyright maximalists never seem concerned in the slightest about the collateral damage on the people who have actually learned to use these platforms well. They prefer to protect those who fight against new systems of distribution, while harming those who have succeeded in using them.

We keep hearing the MPAA and others talk about how much Hollywood is suffering from piracy and how they can't fund new movies and how they're having to lay people off. And then there's this, suggesting something else may be going on:

Consider: the top 20 companies in the United States ranked by market capitalization include no media companies. But according to figures assembled for The New York Times by Equilar, which compiles data on executive compensation, media companies employ seven of the top 20 highest paid chief executives.

The names are familiar and the numbers are large: Leslie Moonves of CBS ($60,253,647), David M. Zaslav of Discovery Communications ($49,932,867), Robert A. Iger of Walt Disney ($37,103,208), Philippe P. Dauman of Viacom ($33,396,104), Jeffrey L. Bewkes of Time Warner ($25,670,263), Brian L. Roberts of Comcast ($25,087,379), and Rupert Murdoch of News Corporation ($22,418,292).

Basically, the study showed that media companies might not be as big as companies in other industries, but they pay their execs way more. Basically, the top execs in the media business make much more than comparable execs in other industries, even if the companies those execs work for are doing much better:

The data indicates that average pay of the 10 highest paid chief executives for media companies was about $30 million, more than the captains of technology or finance and other industries, who average $6 million to $14 million less.

A few years ago, a friend who worked in the movie industry told me that the industry changed completely when the top executives started thinking that they were the stars. Suddenly, the focus shifted from making good entertainment to making sure they were the highest paid people around, and making sure that everyone knew it. I thought it was just a random comment at the time, but the data suggests that there's at least something to the idea that media execs have way outsized salaries.

Either way, though, it does seem somewhat ridiculous to see any of the folks on the list above complaining that their business is in trouble when they're pulling down salaries like that.

A few weeks ago we took a look at the latest filings in the long-running Viacom/YouTube dispute and were somewhat stunned at the ridiculous arguments made by Viacom, suggesting that the burden of proof was on YouTube to prove it did not know the videos on its site infringed on Viacom's copyrights. The idea that copyright law works this way, in which the burden of proof is on the service provider to show a lack of knowledge of infringement, is crazy. Thankfully, the court agreed.

In a ruling released today, the court gave a total victory to Google/YouTube, granting it summary judgment, saying that YouTube was protected from claims of infringement via the DMCA's safe harbors, and mocking Viacom's legal theories at the same time. Might as well jump right in with some quotes, including the money quote that Viacom's legal theory is "extravagant." Elsewhere the judge calls it "ingenious."

Viacom's argument that the volume of material and "the absence of record evidence that would allow a jury to decide which clips-in-suit were specifically known to senior YouTube executives" (Viacom Opp. pp. 9-10) combine to deprive YouTube of the statutory safe harbor, is extravagant. If, as plaintiffs assert, neither side can determine the presence or absence of specific infringements because of the volume of material, that merely demonstrates the wisdom of the legislative requirement that it be the owner of the copyright, or his agent, who identifies the infringement by giving the service provider notice. 17 U.S.C. § 512(c)(3)(A). The system is entirely workable: in 2007 Viacom itself gave such notice to YouTube of infringements by some 100,000 videos, which were taken down by YouTube by the next business day. See 718 F. Supp. 2d 514 at 524.

Thus, the burden of showing that YouTube knew or was aware of the specific infringements of the works in suit cannot be shifted to YouTube to disprove. Congress has determined that the burden of identifying what must be taken down is to be on the copyright owner, a determination which has proven practicable in practice.

This was the crux of Viacom's argument. That because they could show a lot of infringement, and here and there point to some evidence that some people at YouTube might have known of general infringement, then the burden should be on YouTube. But the court clearly calls them on this, noting that's not what the law says, nor does it make sense. Instead, under the law, the burden is on Viacom and that makes sense.

From there, the court cut through the claim of "willful blindness" that Viacom (and some of the folks in our comments) were so fond of. The court's basic response is "huh?" Basically it points out that Viacom's argument makes no sense. It points out that the 2nd Circuit appeals court made it clear that red flag knowledge had to be about specific infringements and Viacom keeps talking about general knowledge. This is, of course, what plenty of us pointed at the time and the court clearly sees through Viacom's wacky argument.

Here, the examples proffered by plaintiffs (to which they claim YouTube was willfully blind) give at most information that infringements were occurring with particular works, and occasional indications of promising areas to locate and remove them. The specific locations of infringements are not supplied: at most, an area of search is identified, and YouTube is left to find the infringing clip. As stated in UMG Recordings v. Shelter Capital Partners, LLC, No. 10-55732, 2013 WL 1092793, at *12 (9th Cir. Mar. 14, 2013) ("UMG III"),

Although the parties agree, in retrospect, that at times there was infringing material available on Veoh's services, the DMCA recognizes that service providers who do not locate and remove infringing materials they do not specifically know of should not suffer the loss of safe harbor protection.

The Karim memorandum states that infringing clips of some well-known shows "can still be found," but does not identify the specific clips he saw or where he found them. The Wilkens declaration submitted by plaintiffs asserts that there were over 450 such clips on YouTube at the time, and presumably some of them contained the infringing matter seen by Mr. Karim. To find them would require YouTube to locate and review over 450 clips. The DMCA excuses YouTube from doing that search. Under § 512(m), nothing in the applicable section of the DMCA shall be construed to require YouTube's "affirmatively seeking the facts indicating infringing activity."

Mr. Karim's memorandum does not tie his observations to any specific clips. Application of the principle of willful blindness to his memorandum thus does not produce knowledge or awareness of infringement of specific clips-in-suit, out of the 450 available candidates. Nor does any other example tendered by plaintiffs.

It goes on to reject Viacom's theory that YouTube had the "right and ability to control" infringement on YouTube, by pointing out that its failure to monitor is completely allowed under the DMCA, contrary to Viacom's desire to pretend otherwise:

YouTube's decision to restrict its monitoring efforts to certain groups of infringing clips, like its decisions "to restrict access to its proprietary search mechanisms," do not exclude it from the safe harbor, regardless of their motivation.

Further, it points out that the rest of Viacom's arguments just show "the normal functioning of any service provider, and shows neither participation in, nor coercion of, user infringement activity." Basically, Viacom's bizarre attempt at making all service providers liable across the board has failed.

Finally, the court quickly dismisses Viacom's claim that because YouTube did deals to make its videos accessible via mobile phones, that syndication caused YouTube to lose its safe harbor protections. The court notes that this was just about making the videos accessible, not about YouTube selecting videos, but still letting users pick the videos they want to watch, but via their mobile phones. It notes that contrary to losing the safe harbor provisions, this is actually a reason for why the safe harbors are good, because it "serves the purpose" of the DMCA in "providing access to material stored at the direction of users."

Basically, Viacom has wasted an incredible amount of money on a massive lawsuit based on a very, very shaky premise that the court didn't buy the first time around, or the second time around. Of course, now we fully expect Viacom to throw more good money after bad, and keep trying to convince a court that its entirely unique interpretation of the DMCA makes sense.

It's been about a year since the 2nd Circuit appeals court sent the Viacom v. YouTube case back to the district court. As we noted at the time, the original district court ruling, which said YouTube was protected by the DMCA's safe harbors, was a good ruling, well reasoned and argued by the court. In contrast, the appeals court ruling dipped into very troubling waters. While it agreed with the district court that YouTube needed "specific" knowledge of infringing works, rather than "general" knowledge that some works were infringing, it also went into questionable territory by arguing that YouTube could be found guilty of "willful blindness," despite the DMCA statute not including any such concept and also being pretty clear that you need specific knowledge in the form of a DMCA-compliant notification.

On Friday, the latest set of (slightly redacted) filings in the case back at the district court were revealed. They were filed in the past few months, but sensitive info was finally redacted and the "public" copies have now been released. Google has, not surprisingly, basically asked the court to reiterate its original ruling, noting that even following the appeals court sending it back, the situation hasn't changed: YouTube obeyed the DMCA's notice-and-takedown procedures and is protected under the DMCA's 512(c) safe harbors (pdf). Google highlights how YouTube has followed notice-and-takedown procedures from early on, and even in the early days blocked some videos that it thought might be infringing. It also notes that Viacom itself pulled a bunch of videos from the lawsuit after it finally signed up to use ContentID and realized that it was beneficial to Viacom's own business. More importantly, as we've pointed out a bunch of times, many videos had to be removed from the case because Viacom had uploaded them itself and even had "confidential (and ever changing) instructions to its copyright-monitoring agent" concerning what to pull off of YouTube. Even worse, apparently, even today, Viacom hasn't fully figured out if all of the clips they're suing over were really infringing. It turns out that many of them are identical to the ones that Viacom itself uploaded as authorized copies (and there's evidence Viacom often uploaded the same clips multiple times itself on purpose).

The basic point: there's no way for Google to know what Viacom uploaded on purpose and what is unauthorized unless it receives direct notification about it. Just like the DMCA safe harbors require. Not only that, but they show that Viacom knew this as fact. First, Viacom tried to buy YouTube itself, and internal memos from Viacom execs noted that "user generated content appears to be what's driving" YouTube's success and even that "consumption of branded content on YT is low." They also specifically stated that YouTube "has many" non-infringing uses.

As for the specific issues raised by the appeals court, YouTube points out that for "willful blindness" to apply, Viacom needs to show that specific clips in this lawsuit were involved in cases where there is evidence of willful blindness by YouTube. That's because the lawsuit is just about those particular clips. If Viacom wants to go after a general willful blindness on the part of YouTube, that's way beyond what the law allows -- and the court is specific about this, noting that Viacom needs to show willful blindness to specific infringements concerning videos in the lawsuit.

But, of course, Viacom doesn't bother to show a single piece of evidence alleging willful blindness by YouTube in regards to any one of the clips in the lawsuit. Instead, in its opposition filing it once again tries to rewrite the law in its favor, trying to create a ridiculously broad general "willful blindness" standard that effectively wipes out the DMCA's 512(c) safe harbors. First, it relies almost entirely on an email sent by an ex-employee of YouTube, in which he claims there is a lot of infringement on the site, but does not name any specific videos. As Google points out, just having someone say there's infringing works on YouTube doesn't (a) show what files need to be removed or (b) even prove the works are actually infringing (see: Viacom uploading its own videos) or, most importantly (c) prove that YouTube failed to remove infringing videos when it learned they were infringing. Viacom doesn't even seem to try to show any of those things. Also, the fact that the email came from an ex-employee certainly doesn't prove that YouTube had knowledge of the specific infringements.

As the filing notes:

The type of generalized guesswork that Viacom engages in bears no resemblance to the showing of specific knowledge of clips-in-suit that the Second Circuit demanded.

In fact, Viacom's filing is really incredible. Having completely lost (at both district and appeals court levels) its ridiculous claim that "general knowledge" of some infringement somewhere on the site leads one to lose safe harbors, Viacom simply tries the same argument again, pretending that the "willful blindness" standard is basically a stand-in for "general knowledge." That's hogwash on many levels, and frankly, I'm surprised that Viacom's pricey lawyers would bother with that argument. The district court already rejected it and the appeals court was pretty clear that Viacom needed to show willful blindness on specific items, not generally.

It also tries to completely flip the burden of proof, arguing that as long as Viacom can show that infringing works were on the site, YouTube has to show that they "lacked such knowledge or awareness of Viacom's clips-in-suit." That's not how the law works. Viacom is actually arguing that the DMCA requires proving the negative. Furthermore, it argues that YouTube's failure to implement an anti-piracy filter that Viacom wanted is more proof of willful blindness. That's similarly ridiculous. The DMCA has been held, repeatedly, to not include a proactive duty to monitor. Failing to do so at the insistence of Viacom (even as YouTube was establishing its own filter anyway) is hardly proof of willful blindness to the infringement of specific clips (and given Viacom's "dizzying array" of authorized videos on the site, such a filter would hardly prove infringement). Incredibly, Viacom insists that it's YouTube trying to flip the burdens in the DMCA, but either Viacom's lawyers have totally misread... um... everything, or they're lying to the court.

They're correct that to get safe harbors the service provider needs to meet certain "burdens," but those are laid out in 512(c). It needs to be a service provider that does not have actual knowledge and when it gets the knowledge, it acts expeditiously to remove or disable access to the material. Those are pretty clearly laid out. Viacom is making things up pretending that the burden also includes the idea that if a copyright holder claims its works are there then the burden shifts to the service provider to prove the negative that it wasn't willfully blind to infringement. Viacom literally argues:

It is not Viacom's burden to prove specific knowledge or awareness. That factual issue is relevant only to the affirmative defense that YouTube is asserting; knowledge of specific infringements is not an element of Viacom's copyright infringement claims against YouTube. At trial, it will be enough for Viacom to prove that the clips-in-suit were on the website, along with some other elements of infringement liability.

Got that? Stuff on the site, plus "some other elements" and boom, no more safe harbors. That's crazy. That's clearly not the purpose of the safe harbors, because that would mean there are no DMCA safe harbors.

As YouTube noted in response:

Viacom does not even try to make the showing of clip-specific knowledge required by the Second Circuit’s ruling. It instead reverses course and claims that it is YouTube’s burden to affirmatively establish its lack of knowledge as to each specific clip-in-suit. Viacom’s novel burden-shifting argument is wrong. It is contrary to the Second Circuit’s decision, all the case law, and the structure of the DMCA itself. Viacom also ignores the record. YouTube has identified more than sufficient evidence of its lack of knowledge of infringement— including the very fact that the voluminous record in this case contains no evidence of such knowledge. Viacom’s inability to offer any evidence from which a jury could find that YouTube had actual or red-flag knowledge of even a single clip-in-suit requires that summary judgment be entered in YouTube’s favor.

Viacom goes on to argue that even though the DMCA is explicit (in 512(m)) that there is no duty to monitor, there really is a duty to monitor! How do they tap dance into that position? By arguing that while there's officially no duty to monitor, if you fail to monitor because it might show you infringing works, then you are guilty of willful blindness. Got that? There's no duty to monitor, but failing to monitor shows that you were making yourself willfully blind. If that's true, then 512(m) makes no sense, which is what Viacom (and other copyright maximalists) have always wanted (in fact, we noted just this three years ago about this case). They want a requirement for others to be their personal copyright cops and 512m gets in the way of that, so Viacom is trying to rewrite it here. In doing this, it relies heavily on the ruling in the Tiffany v. Ebay case -- but that's a very different story, involving trademark (for which the safe harbors don't apply), not copyright.

Viacom also regularly cites shows like South Park, the Daily Show and others despite the fact that Viacom explicitly (in its "rules" sent to BayTSP, its DMCA monitor) had many, if not most, of those clips left on the site as authorized.

There are a few other points up for debate -- concerning things like whether or not YouTube got financial benefits directly from infringement, whether or not reformatting YouTube videos for smartphones removes safe harbors and a few small other points that we won't get into here. Those are unlikely (hopefully) to be the center stage issue, and this post is long enough as is. Frankly, I remain surprised that Viacom's arguments seem so obviously weak. Ever since the case began, I've been surprised at how weak Viacom's arguments are. From the beginning, I expected them to have a stronger lawsuit. Having read the latest filings, it really feels like Viacom went all in early, and rather than admit it never had the goods, it's just going to try crazier and crazier arguments and hope that a court gets confused. Seems like a good way to completely throw away money.

Anyway, if you feel like digging into the three filings (YouTube's motion for summary judgment, Viacom's opposition and YouTube's reply), they're all embedded below for your reading pleasure.

We've written a few times about the sad case of Veoh. Veoh was a YouTube-like site, funded by Hollywood insiders like Michael Eisner, but who got sued by Universal Music Group, claiming copyright infringement (using more or less the same theories used by Viacom against YouTube). Technically, Veoh sued first (filing for declaratory judgment after receiving a threat letter from UMG, but UMG quickly followed with its own lawsuit). UMG played dirty, not just suing the company but directly suing its investors as well. This was a pure intimidation technique, designed to scare major investors into either pulling investment or ordering the company to change course, even if what they were doing was legal. While the court dismissed the charges against the investors (and scolded UMG in the process), the intimidation might have worked. In the middle of all of this, Veoh shut down, because it ran out of money, mainly due to the lawsuit. It sold off its assets to another party, and somehow scraped together a little money to keep the lawsuit, and just the lawsuit, going.

Since then, there have been a series of rulings that have repeatedly found Veoh to be legal and protected under the DMCA's safe harbor. The district court found in Veoh's favor, as did the 9th Circuit appeals court. Yesterday, the appeals court ruled again on the issue, with a superseding opinion that, once again, says that Veoh was legal. Even though it's still dead. The ruling not only reiterates the importance of DMCA's safe harbor protections for user-generated sites like Veoh, but also shows how that still applies even given the 2nd Circuit's slightly weaker view of the DMCA safe harbors.

The court goes through a nicely detailed explanation for why Universal Music's interpretation of the DMCA doesn't make any sense at all and would not only create internal conflict within the law, but also make the safe harbors effectively meaningless. Specifically, Universal Music tries, ridiculously, to argue that DMCA safe harbors aren't supposed to apply to any service that makes files accessible to the public. As the court points out, if that were the case, the law would be silly, since copyright holders would never learn about that infringement anyway, since the works wouldn't be available for them to find. The court points out it's ridiculous to think that DMCA safe harbors were only meant to apply to backup services.

We do not find persuasive UMG’s effort to reconcile the internal contradictions its reading of the statute creates by positing that Congress must have meant § 512(c) to protect only “web hosting” services. Web hosts “host” websites on their servers, thereby “mak[ing] storage resources available to website operators.” The thrust of UMG’s argument seems to be that web hosts do not undertake the sorts of accessibility-facilitating functions that Veoh does, and thus the services they perform “fit within the ordinary meaning of ‘storage,’” and thereby “harmoniz[e]” with the notice and takedown procedures. UMG’s theory fails to account for the reality that web hosts, like Veoh, also store user-submitted materials in order to make those materials accessible to other Internet users. The reason one has a website is so that others may view it. As amici note, these access activities define web hosting – if the web host only stored information for a single user, it would be more aptly described as an online back-up service.

The court also rejects a theory -- popular among some of our maximalist commenters -- that the DMCA was only intended for purely "web hosting" companies, rather than being broadly applied across various online services such as user-generated service providers. As the court noted, if Congress wanted to limit the safe harbors in that manner, it would have said so: "Had Congress intended to include such a limitation, it would have said so expressly and unambiguously."

The next damaging part for Universal Music: Veoh was really good at taking down videos when it received DMCA notices. UMG tried to argue that Veoh had knowledge of infringing works on its site that it didn't remove. This argument is the crux of the YouTube/Viacom case as well: is "actual knowledge" from DMCA notices, or what kind of knowledge creates "red flag" awareness. The DMCA can be read in self-contradictory ways at points. For example, it says that a provider only has to takedown content if it receives a DMCA notice that follows somewhat strict procedures. But, then, also talks about if there's "red flag" awareness. Take both literally, and you could, for example, wonder what happens if someone sends an improperly structured DMCA notice (say, missing certain elements), but indicates infringing works, nonetheless. Is that "red flag" knowledge? Here, as in the YouTube case, though, UMG relies on a much broader definition of red flag knowledge, in which it kind does a "but they must have known!" sort of thing. It's basic argument: there was music on Veoh, and Veoh had to know that was infringing. The court is not buying it. First of all, just because there's music, it doesn't mean it's infringing.

As an initial matter, contrary to UMG’s contentions, there are many music videos that could in fact legally appear on Veoh. “Among the types of videos subject to copyright protection but lawfully available on Veoh’s system were videos with music created by users and videos that Veoh provided pursuant to arrangements it reached with major copyright holders, such as SonyBMG.” Further, Congress’ express intention that the DMCA “facilitate making available quickly and conveniently via the Internet . . . movies, music, software, and literary works” – precisely the service Veoh provides – makes us skeptical that UMG’s narrow interpretation of § 512(c) is plausible. S. Rep. No. 105-190, at 8. Finally, if merely hosting material that falls within a category of content capable of copyright protection, with the general knowledge that one’s services could be used to share unauthorized copies of copyrighted material, was sufficient to impute knowledge to service providers, the § 512(c) safe harbor would be rendered a dead letter: § 512(c) applies only to claims of copyright infringement, yet the fact that a service provider’s website could contain copyrightable material would remove the service provider from § 512(c) eligibility.

Later on, the court makes a key point that we've reiterated over and over again -- every time copyright holders and maximalists insist that service providers need to become copyright cops -- that the service can't become copyright cops because they have no idea if stuff is actually authorized or not:

Copyright holders know precisely what materials they own, and are thus better able to efficiently identify infringing copies than service providers like Veoh, who cannot readily ascertain what material is copyrighted and what is not.

That message is something that the various lawyers representing MPAA and RIAA affiliated companies should be forced to write on a blackboard over and over again until the point is driven home.

Of course, in the YouTube case, with the original district court ruling, there were similarly strong statements, but the 2nd circuit walked it back somewhat, suggesting that a different standard need apply to "red flag" knowledge. Here the court points out that, even if that's true, Universal Music would need to show a lot more to prove any red flag knowledge.

Of course, a service provider cannot willfully bury its head in the sand to avoid obtaining such specific knowledge. See Viacom Int’l v. YouTube.... Even viewing the evidence in the light most favorable to UMG as we must here, however, we agree with the district court there is no evidence that Veoh acted in such a manner. Rather, the evidence demonstrates that Veoh promptly removed infringing material when it became aware of specific instances of infringement. Although the parties agree, in retrospect, that at times there was infringing material available on Veoh’s services, the DMCA recognizes that service providers who do not locate and remove infringing materials they do not specifically know of should not suffer the loss of safe harbor protection.

The ruling goes on in this nature. It's definitely a good ruling that lays out, yet again, why the DMCA safe harbors protect internet companies, and blasts holes in the silly theories of some of the big legacy players that have tried to wipe out those safe harbors. It does send one small issue back to the lower court -- an exploration of whether or not Veoh is due certain fees (excluding attorneys fees). This is more of a procedural issue than anything else.

So, once again, Veoh has proven that internet services like it are protected by the DMCA from being blamed for users infringing. And yet, the fact that it had to effectively shut down and just sell off its assets, is a reminder of just how much the big copyright players can stifle and kill off innovative services via copyright law, even when they have no case.

For many, many years there have been disputes between cable TV providers and the TV companies over what channels the cable (and satellite) guys need to provide. The TV companies often "bundle" smaller channels that don't get many viewers along with the popular "must have" channels. Part of their argument is that this allows those smaller channels to exist in the first place, as they'd be economically nonviable without the subsidy from the super popular channels. Of course, the cable/satellite providers (and many consumers) argue that this is waste, pure and simple, and it means higher bills. It appears that Cablevision is finally trying to do something about this, and has filed an antitrust lawsuit against Viacom for forcing it to carry the channels it doesn't like, specifically channels like Palladia, MTV Hits and VH1 Classic. Cablevision has to carry those if it wants the channels that people actually watch, like MTV, Comedy Central and Nickelodeon.

Oddly, we can't show you the full lawsuit, because it's been filed under seal. You see that sometimes when it involves contractual disputes, since the terms in the contract are secret. However, it's rather unfortunate that they couldn't file the document with the secret stuff redacted. At this time, we just have Cablevision's side of the story via their press announcement. The key argument is that this is an illegal "tying" arrangement. Of course, just last year we had a ruling in a similar lawsuit, in which cable customers filed a similar suit, which flopped in court.

Cablevision may have a difficult time making this claim succeed as well. As Viacom quickly pointed out in response, the bundling is not "forced." Pay TV companies can choose individual channels without other channels, it's just that the price is higher. So, they argue, the bundling actually leads to discounts. Whether or not anyone actually believes that claim may become a key question in the lawsuit. If I had to do an initial handicapping, though, I'd guess that Viacom wins this one, even if Cablevision can make Viacom (and others) sweat for a bit. In the long run, however, this is still about fighting the last battle. The idea of TV channels is an increasingly obsolete concept. This fight is over the way video content was distributed. Not the way it will be distributed in the future.

I don't know what a good anti-piracy ad looks like. I don't think I've ever seen one. Most of these promos come across with all the subtlety of a stereotypical Jewish grandmother bearing a sledgehammer, continually bashing the observer over the head with guilt and terrible physical theft metaphors. This new ad is different. Not better, but at least not more of the same. Hat tip to Dave Awesome Allen for pointing this out via his blog post entitled "Yeah, this will really work." (Yes. His middle name is actually "Awesome" and it's because of things like this. Also because of Gang of Four, Shriekback and the Elastic Purejoy. )

It's not much to look at from a distance:



But, fortunately, Huh Magazine has a selection of closeup shots to better show how piracy is swiftly turning musicians blue.

In the following two closeups, a few details stand out, which we decided to highlight for discussion purposes:



[1] A man who looks suspiciously like Kim Dotcom as portrayed by Rex Ryan gestures wildly at the cowering musicians while unwittingly providing user names and passwords to the onlooking Anonymous member. 

[2] Fanservice.

[3] Lyle Lovett is menaced by an eyeless worlock who uses his magicks to unsettle Lovett's hairpiece.



[1] A Hindu techie delivers a new monitor.

[2] A man requests a refund for his defective power strip, gesturing at the distinct lack of sockets.

[3] H8trs gonna h8.

A set of striking images to be sure, reminding each and every one of us John Q. Downloaders that your computer's hard drive is made out of people, and each download is slowly (depending on ISP) drowning them. Which is bad, because most of them own expensive electronic devices.

Last week, we wrote about Viacom's really short-sighted decision to use its fans as hostages in a silly dispute with DirecTV over fees. To prevent any DirecTV customer from seeing any of its key shows, Viacom stopped streaming them online... for all customers, meaning that even those who had nothing to do with any of this couldn't legally watch the shows they liked. As we noted, this would likely only serve to drive more people to find unauthorized versions. Late in the week, we saw AMC smartly take the opposite approach and provide more online access to customers disrupted by a similar fight it was having with Dish Network.

Of course, one of Viacom's most popular shows -- and one of the key ones turned off from streaming -- is The Daily Show with Jon Stewart, which had been on break last week anyway. However, it returned last night with a vengeance, and target number one: his corporate masters at Viacom for acting as if they were China in blocking the internet, and likely driving more fans to unauthorized streams. You can watch it here (if you're in the US) complete with Viacom appending a commercial bitching about DirecTV beforehand: When we wrote about this last week, one of our usual critics told us, in some of the most angry language imaginable, how objectionable it was that we dared to mention the obvious fact that if you don't make things available legally, people might find unauthorized versions. However, Stewart made the exact same point in his discussion of the situation.

"You're pulling the shows from the internet?!? What are you, China?!? And by the way, you don't think the kids already have a workaround? This morning, when I woke up, my 8-year-old son was watching Dark Knight Rises in 3D. They're already figuring it out. So basically you're blocking old people from watching the show, and just giving people a chance to discover that there's other entertaining s**t in the world...."

In response, Viacom has somewhat sheepishly backed down and put the Daily Show & Colbert back online (though it seems some others may be blocked). It tried to make a joke of this a bit by pointing to Stewart's mocking and noting that "The Daily Show continues to exercise the creative and editorial freedom that makes it consistently great." In other words, someone at Viacom realized they totally screwed up and even their own high profile employees were calling them on it publicly. It really makes you wonder if they have anyone at Viacom who thinks how the world will react to its crazy moves.

Yesterday, we wrote about Viacom's reactionary strategy of holding its fans hostage by shutting down online streams of The Daily Show and The Colbert Report after DirecTV advised its customers (who just lost access to Viacom shows) to watch them online. It was a childish move that punished a whole lot of fans (not only DirecTV users) just to gain leverage in a contract dispute, and a textbook example of how big media's shortsightedness drives people to piracy. Nobody was impressed.

So today it's interesting to hear about a network taking the exact opposite tack. AMC, home of a bunch of popular shows cast somewhat in the HBO mold, was recently dropped from the basic package for Dish satellite subscribers. AMC says that unlike the Viacom/DirecTV situation, they were not asking for more money and this was not a negotiation issue, but rather Dish trying to "gain leverage in an unrelated lawsuit."

So what is AMC's response? Well, the much-anticipated fifth-season premier of Breaking Bad, one of their flagship shows, is airing on Sunday—and they've decided to set up a special online stream just for Dish subscribers, so they can watch it for free. Meanwhile, they point out that virtually every other satellite and cable provider includes AMC in its basic package, and that several are now offering special sale prices for customers switching from Dish. They even have a toll-free line at 1-855-2DROP-DISH offering more information. For Dish, this is what you call a "PR nightmare".

But -- and here's where it gets even more interesting -- Dish claims they dropped AMC because the company insists they also carry some other less-popular networks bundled with it. That's why DirecTV says it dropped Viacom, too. It's a bit of an our-word-against-theirs situation as to the real cause of the conflict, and it's likely that neither company is entirely blameless. But AMC's first move was to go straight to the fans with a special offer to give them what they want. Viacom's first move was to... petulantly punish not only the fans involved in the dispute, but all of their fans.

Both Dish and DirecTV are experiencing backlash—even though some people support DirecTV in the bigger picture, most fans are just reacting to their favorite shows suddenly disappearing, and understandably getting annoyed with their service provider. But while AMC has leveraged the situation as a way to get good PR by offering fans something special, Viacom managed to extract its own dose of negative backlash by further depriving them.

Much like the MPAA, it seems Viacom needs a lesson in communications.