Sun Valley, Idaho – Tensions between technology and media companies are usually humming just beneath the surface during a week-long retreat for top CEOs that this cozy mountain resort hosts every year, but last week a marketplace clash between Viacom Inc. and Google Inc. just couldn’t be kept down.
Viacom, a major media conglomerate that owns the MTV, Comedy Central and Nickelodeon cable networks, has hit Internet search leader Google with a $1 billion lawsuit, saying that Google’s popular video-sharing site YouTube is a massive center of copyright infringement, routinely displaying clips from Viacom shows such as “The Daily Show With Jon Stewart.”
The conflict has huge implications for the future of both media and technology companies as a legal ruling could help set standards for how video and other kinds of media are distributed over the Internet, a trend that is in its early stages but growing rapidly as people increasingly go online for entertainment, and advertising dollars follow them.
Google chief executive Eric Schmidt said he believed his company was acting within the law and promised to defend itself vigorously.
Schmidt held court with a group of reporters well into the night on a hotel terrace Thursday during a conference of top- level media executives that the Allen & Co. investment bank has organized in Sun Valley since the early 1980s.
Schmidt also said Viacom was “built on lawsuits … look at their history,” he said, referring to a series of legal battles Viacom engaged in when it was still a small chain of movie theaters in order to secure the distribution of first-run films.
Schmidt pointed to the fact that Viacom was currently being run by a former general counsel of the company, Philippe Dauman.
Viacom’s chairman and controlling shareholder, Sumner Redstone, didn’t dispute Schmidt’s characterization of his company as having had a history of taking its business beefs to the courts.
“We have engaged in a lot of litigation at Viacom, of which I have been a primary mover,” Redstone told a group of reporters Friday morning, responding to a question about Schmidt’s characterization.
