I’m reading the otherwise perfectly reasonable New York Times piece on the Viacom/Youtube lawsuit and I encounter this bizarre misrepresentation of recent history:

“In the early 1990s music companies let Web companies build business models on the back of their copyright,” said Michael Nathanson, an analyst at Sanford C. Bernstein & Company. “I think the video industry is being more aggressive for the right reasons, to protect the future value of those assets.”

It’s hard to imagine how one could find more ways to be wrong on this topic.

First, there were no “Web companies” in the early 1990s; the first Web companies emerged in 1994-5 — and aside from some unusual efforts, like Michael Goldberg’s Addicted to Noise zine, there was not a lot of music happening on the Web. The MP3 revolution didn’t begin to roll until late 1997 or early 1998 (here is Andrew Leonard’s early report on the MP3 scene, which I edited).

More important, Mr. Nathanson has the history here precisely inverted. What happened in the Napster era was that music companies refused to allow Web companies to build business models on the back of their copyright. They decided that MP3s were all about piracy and they sued Napster out of existence. They refused to do deals with companies that wanted to distribute their music online, and in fact they failed to offer their music online in any way palatable to consumers until Steve Jobs whacked them on the side of the head — and even then they saddled his whole iTunes enterprise with a cumbersome “digital rights management” scheme that even he is now disowning.

The Viacom suit against YouTube does not represent a break with the way the music industry dealt with its rocky transition to the digital age; it is an instance of history repeating itself. The RIAA strategy of “sue your customers” may have succeeded in driving file-sharing underground, but it didn’t do anything to protect the profits of the music industry, which have been in a tailspin ever since. If the Viacom suit is an indication that the owners of TV shows and movies are going to pursue a similar strategy of I’d-rather-sue-than-deal, they may find themselves in a similar downward spiral.

Google has a pretty good case based on the 1996 Telecommunications Act safe harbor provision. If Viacom fails to win against its corporate opponent, will it start suing all the Jon Stewart fans (and, possibly, the show’s own staff) who are uploading clips to YouTube?

If the TV and film industries look carefully at the music industry’s story, they will see that their danger lies not in being too soft on copyright infringers but rather in missing the tidal wave of a platform shift.

[tags]youtube, google, viacom, napster, drm[/tags]