Do not pass Go,
do not collect $200MM

Video copyright holders looking to secure their pound of flesh from the new Google/YouTube combo just got a juicy new target: a $200 Million pot of gold set aside to cover potential lawsuits.

When Google announced last month that it was buying 18-month old YouTube, many analysts predicted a flurry of legal actions as claimants sniffed substantial winnings. Now news has emerged that Google has set aside $200 million to fight possible court cases following its takeover of the popular video-sharing site. As the search engine closed its $1.65B deal to purchase YouTube, it transpired that more than 12 percent of the takeover money was being set aside to "secure certain indemnification obligations."

It's one of the unfortunate realities of consumer-generated media (CGM) that consumer "generation" often consists of copying source material whose copyright belongs elsewhere. Sites such as YouTube have thus far opted for Don't Ask, Don't Tell as a compliance strategy, promising swift removal action if copyright holders complain but otherwise turning a blind eye.

In a filing to the US Securities and Exchange Commission last week, Google admitted that lawsuits could be a problem: "Our planned acquisition of YouTube may also subject us to additional copyright claims upon the closing of the transaction. Adverse results in these lawsuits may include awards of damages and may also result in, or even compel, a change in our business practices."

Google is negotiating hard with rights owners to head off any legal action in the future. It has announced deals with CBS, Sony, BMG, Vivendi Universal Music and Warner Group to feature their videos on the site, and it is in talks with other media content owners, reportedly offering some studios cash up front for permission to put their videos online.

In the absence of stringent gatekeeping processes, however, Google/YouTube is always just one upload away from "see you in court."