Viacom sent YouTube a demand this month covering more than a hundred thousand clips. That is not a housekeeping exercise. It is a document being created for later.
The protection YouTube relies on is the safe harbour for services that host what other people upload. The bargain is that you are not liable for material you did not know about, provided you remove it promptly once told. It has held up well for a decade because it describes something reasonable: a host cannot inspect everything, so give them a process and hold them to it.
The interesting question is what happens to that bargain when the volume of notice becomes evidence in itself.
A rights holder who sends a hundred thousand notices at once is not really asking for a hundred thousand removals. They are establishing on the record that the service has been comprehensively informed of what is on it, and then arguing that a company which knows this much cannot claim ignorance about the next hundred thousand. Whether that argument works is a genuinely open question and I do not think anyone knows the answer, including the lawyers on both sides who will tell you they do.
Which brings me to the price Google paid. One and a half billion dollars for a company with no revenue was called insane at the time, and the defence offered was that Google was buying the audience.
That is right as far as it goes. Google Video existed, worked adequately, and nobody used it, and there is no amount of engineering that fixes that. When people have chosen where to put their videos, the choice is finished. So Google bought the winner, which is what you do.
What the price also bought is a defendant with a parent company worth a hundred and fifty billion dollars.
Before the acquisition, suing YouTube meant suing a startup with venture funding and no ability to pay a serious judgment. Winning would have closed it and recovered very little. Now the same claim points at Google, and the calculation for every rights holder changed on the day the deal closed. I would guess the volume of legal threat YouTube receives went up by an order of magnitude that month for reasons entirely unrelated to what was being uploaded.
There is a second problem underneath, less dramatic and possibly worse. Every video served costs bandwidth and storage, both of which scale directly with success. There is currently no advertising on the clips themselves. So the more the thing works, the more it costs, and nobody has demonstrated that pre-roll advertising against user-uploaded video is something audiences will sit through.
A business that gets more expensive as it grows, with an unresolved legal question attached to the growth, is not obviously a bargain at any price.