Striking Writers Point Out Viacom Hypocrisy; Claiming Online Video Is Worthless While Suing YouTube For $1 Billion
from the wave-or-a-particle? dept — While I tend to agree with Tim Lee's comments about why the Writers Guild strike is misguided (and the guild itself is increasingly obsolete) …
Context & Ripple Effects
The Writers Guild strike, now in its second week, has handed its members an unexpected rhetorical weapon: Viacom's own $1 billion copyright lawsuit against YouTube. Striking writers are pointing out that a studio which publicly dismisses online video as worthless is simultaneously valuing it at a billion dollars when it sues over it — a contradiction that cuts directly at the studios' bargaining position on digital compensation.
The hypocrisy charge lands on prepared ground. Valleywag documented Viacom's own unauthorized use of others' video back in March, and by August Viacom and NBC had inserted themselves directly into the online video litigation. Meanwhile, the Freakonomics blog asked just last week whether web video is actually hurting TV at all, complicating both sides' claims about what the strike is really fought over. Commentator Tim Lee, whose critique Techdirt endorses, argues the guild itself is increasingly obsolete — so the writers' best move may be exposing the valuation double standard rather than defending old business models.
First-order effects
- Striking WGA members gain a concrete public-relations lever: Viacom's own $1 billion damages figure becomes evidence for what online video is worth, undermining the studios' claim that digital distribution doesn't justify better writer compensation.
- Viacom's litigation strategy acquires a credibility problem — arguing in court that YouTube caused massive harm while telling regulators and advertisers that online clips are economically trivial invites judges and journalists to discount one of those two positions.
Second-order effects
- Other studios backing the YouTube suit, including NBC through its litigation alliance with Viacom, inherit the same contradiction and may need to reconcile their public messaging on online video value before negotiations or courtroom arguments force the issue.
- The strike pushes the valuation question from rhetoric into contract terms: whatever residual formula emerges has to attach real numbers to online distribution, effectively pricing web video for the first time in guild agreements.
Third-order effects
- If the pattern holds, the industry moves from dismissing online video to litigating and negotiating its value — meaning labor deals, not platform lawsuits alone, become the mechanism that sets how digital revenue splits between studios and talent.
- A prolonged standoff over digital compensation accelerates pressure toward alternative production and distribution models outside the guild system, the outcome critics like Tim Lee argue would make the guild itself marginal.
The trend: Hollywood's simultaneous dismissal of and billion-dollar claims against online video is forcing the industry to put a real price on digital distribution — through lawsuits, strikes, and eventually contracts.