In many ways, YouTube was a Napster waiting to happen. Shortly before Google bought the video site for $1.65 billion, it was reported that lawyers at Universal Music were putting the final touches on a lawsuit against YouTube alleging massive copy- right infringement.
The belief was that if the lawsuit had gone ahead, Google would have pulled out on the basis that it wasn't going to spend all that money only to find itself knee-deep in lawsuits.
It looked very ropey indeed for all concerned until a last-minute intervention by the Warner label smoothed over the legal cracks. Before the Google deal, Warner approached YouTube with an offer: the video site could distribute the label's music videos in exchange for a licensing fee and a share of advertising.
Usually record companies reach for their gun whenever there's a sense of copyright infringement (and YouTube were infringing left, right and centre) but this enterprising deal marked the beginning of what Americans would call the "legitimisation" of the site.
Universal and Sony/BMG have now followed the Warner example, and EMI is in advanced talks with the site. Finally, it seems, traditional media companies are behaving in a reasonable manner with web- sites that distribute music videos on the internet.
There was nothing to stop hordes of lawyers descending on YouTube in the days before the Google deal, but lessons seemed to have been learned from the Napster debacle, when attacking one problem with litigation simply made the labels unpopular and didn't stem the flood of sites that sprang up once Napster was legally wiped out.
It's one thing cutting deals with major labels. But the sheer size and scale of YouTube means there are thousands of small companies who could go after the site for infringement. And there are already fears that if lawsuits are brought, they won't just be against YouTube but also against the people who uploaded the copyrighted material.
What all this means is that you're going to be hearing a lot about a weird and complicated piece of legislation called "Safe Harbour" over the next while. Brought in in the US in 1998, the Safe Harbour law was designed to ensure copyright protection in the digital age. It helps service providers avoid liability for acts of copyright infringement committed by third parties.
If someone illegally uploads copyrighted material on YouTube but YouTube makes it easy for the copyright holder (of the song or music video, for example) to complain about the breach and acts swiftly to remove the offending content, the threat of a lawsuit can be averted.
However, the Safe Harbour law was no use to Napster when it argued that all it provided was a piece of software and if people were swapping songs amongst themselves using the software there was nothing they could do about it.
The problem here is that the Safe Harbour law is one step beyond the technology. Some- thing that seemed sensible in 1998 simply can't be stretched to cover all the technological changes since then.
What is troublesome here for Google/YouTube is that the law states that the service provider must not receive a financial benefit directly attributable to the copyright infringement. With Google making advertising money from YouTube, this technically pulls it away from its "Safe Harbour". Google/YouTube are pushing at the boundaries of the law. The concern here is that just one successful lawsuit against them will open the floodgates and everyone will be back to square one.
Already people are confused over why some material is legally available on YouTube while other material isn't. Doing deals with the major labels did solve a huge problem, but with so many different copyright holders involved here, this is one of the most legally complex issues of the day.
Nobody wants a repeat of the Napster wars, but it looks like it's heading that way.
