Fearful of the growing dominance of Google, some of the country’s most powerful media companies are seeking to rein in the digital giant. Viacom’s $1 billion copyright infringement lawsuit against Google’s YouTube and the recent deal between NBC Universal and News Corp./Fox to establish a rival online video site have made the headlines. But this is just the beginning of a larger effort designed to weaken and undermine Google. The stakes are high, not only for Google and the other media conglomerates but for the future of the broadband medium and the public interest.
Privately, a number of media giants have been exploring ways to limit Google’s growing clout in the advertising marketplace. Among the options, insiders say, is a possible federal antitrust case, similar to the 1998 case brought against Microsoft. Another avenue is possible actions against Google at the Federal Trade Commission over the company’s interactive data-collection apparatus.
Representatives from Google’s growing list of competitors say that unless checked now, Google will ultimately control most of the interactive advertising revenues for broadband. Industry insiders understand that control over ad revenues will give Google tremendous clout over the future of content online, since it will have the resources to fund whatever it desires. Consequently, Viacom’s legal action against Google is less about copyright infringement over clips from The Daily Show appearing on YouTube than about cutting the search and advertising behemoth down to size.
Currently, Google garners nearly half of all US online searches. The company has also aggressively expanded its advertising services into newspapers, radio, television and mobile communications. As commerce, communications, entertainment and information further merge online, companies that control both the most popular sites and the interactive targeted-marketing (and data-collecting) apparatus will dominate.
The media industry now finds itself in a critical period of transition, which will determine what the financial relationships will be among the major content providers (such as Viacom), mobile and cable systems (such as Verizon) and advertising powerhouses (Google). Viacom chief Sumner Redstone knows firsthand how legal action can humble potential competitors. He successfully took on cable TV baron John Malone more than a decade ago in another well-known entertainment industry lawsuit. As with the case against Malone, Viacom’s legal action against Google is not just about humbling a rival but also about getting the best deal for splitting revenues.
Time Warner, Viacom, Fox, Google and the others are really arguing about the role that interactive advertising will play in determining the future of digital content and its distribution: Who gets the lion’s share of revenues from ad and content sales? How much access can advertisers have to our personal data? How much advertising can they send our way? To what extent can media giants control the monetization of our eyeballs and our psyches? This is also everything about pleasing the biggest deep-pocketed advertisers, who don’t want to see their ads adjacent to videos that might undermine their message. Google has already implemented a technology fix to prevent unwanted content from appearing on YouTube and other sites. Its “advanced content identification architecture” is designed to insure major program producers and advertisers that it can identify and remove any problematic content.
There is real danger that the media buzz around disputes like the Viacom suit and the new NBC-Fox online venture will obscure real concerns about privacy and other rights we have as consumers of online content. As media powerhouses seek to make the new digital landscape a better environment for large advertisers, those who care about the potential of broadband to serve the public interest should be engaged in the debate. We should not leave decisions about how digital content is paid for and distributed just to Google and its ever-growing list of corporate competitors.