YouTube suit is fight for control of content

CBS news anchor Katie Couric's interviews attracted only a few thousand viewers, and behind-the-scenes vignettes with the cast of NBC's new drama "The Black Donnellys" got a few hundred. But the amateur video of Nora the Piano Playing Cat, "Practice Makes Purrrfect," drew 1.5 million.

So why is Viacom Inc. bothering to sue YouTube? It's all about control, and money.

Networks won't give YouTube much of their most-popular material because they believe that Google Inc., which owns YouTube, isn't protecting their copyrighted content. What's more, Google isn't offering to pay them what they think is enough. And even if the networks could sort out the financial issues, they still want to dictate which ads would be placed around their clips -- and not have their shows thrown into the mishmash of fistfights, karaoke performances or ladybugs having sex.

Most advertisers "want to be in the VIP section, the section that requires a higher price for admission," said Tim Hanlon, an executive with French advertising giant Publicis Groupe. "YouTube's audience is a polyglot and random. It's one gigantic lowest common denominator."

Emily Riley, a Jupiter Research analyst, said the amount of money advertisers spend on social networking sites such as YouTube amounts to pocket change. The majority spent less than $250,000 in the last 12 months, Riley said, and only a tiny percentage of advertisers spent more than $1 million. By contrast, Walt Disney Co.'s ABC collected $1.7 million for each 30-second spot during the Academy Awards telecast.

YouTube is still trying to figure out how to make big money on its massive audience. It has relied on banner advertisements, drawing an estimated $15 million in ad revenue last year, according to a Bear Stearns analyst.

Not all advertisers are avoiding the site. Anheuser-Busch Cos., Coca-Cola Co. and Nike Inc. have been uploading some commercials to snag extra views.

"There are advertisers who are cautious and want to avoid being associated with content that they feel is in poor taste," said David Cohen, an executive with advertising buying firm Universal McCann. "But for others, YouTube is a fantastic way to aggregate a mass audience."