Tuesday, May 27, 2008

Viacom Wants to Litigate not Innovate

As you have probably heard, Viacom is suing Google for $1 Billion (USD). They are claiming that YouTube contains over 150,000 copyrighted video clips that are not authorized for posting. When will media conglomerates learn that it is time to innovate instead of litigate. In the Information Age, information is not sacred. All of the worlds knowledge is just a click away. This includes music and videos. The media establishment has lost this same battle before with music sharing with the likes of Napster. What was the result of all the lawsuits and complaining? Today, music sharing still exists both legitimately and illegitimately. The most legitimate outlet being Apple's iTunes application which is poised to be the number one distributor of music in the United States (both offline and online). As a result, the profit margin for music and video's has eroded significantly and profit for MP3 players has been preserved.

Instead of fighting the inevitable sea of change, media companies such as viacom should be innovative with their intellectual property to preserve profitability in the age of information. Just as Apple has been able to create a product (iPod) that complements todays utility of the world wide web, media conglomerates should use their vast resources to develop similar types of products and services.

Disney appears to have been very proactive with this effort by making television shows on ABC available on its website after their broadcast of television. Perhaps there could be "behind-the-scenes" footage that would only be available on a pay-per-view website. I guarantee there would be customers for such a website in todays celeb gossip hungry society. In the age of information customers demand and will pay for access to information if it is perceived as valuable to a particular target market.

There is plenty of room for innovation especially in today's environment, if Viacom would prefer to litigate then it is likely that other businesses will innovate in their place.