Viacom International, Inc. et al v. Youtube, Inc. et al

Filing 208

DECLARATION of William M. Hohengarten (Part Four) Ex. 42 in Support re: 176 MOTION for Partial Summary Judgment /Viacom's Notice of Motion for Partial Summary Judgment on Liability and Inapplicability of the Digital Millennium Copyright Act Safe Harbor Defense.. Document filed by Country Music Television, Inc., Paramount Pictures Corporation, Viacom International, Inc., Black Entertainment Television, LLC, Comedy Partners. (Attachments: # 1 Exhibit 43, # 2 Exhibit 44, # 3 Exhibit 45, # 4 Exhibit 46, # 5 Exhibit 47, # 6 Exhibit 48, # 7 Exhibit 49, # 8 Exhibit 50, # 9 Exhibit 51 - Part 1, # 10 Exhibit 51 - Part 2, # 11 Exhibit 51 - Part 3, # 12 Exhibit 51 - Part 4, # 13 Exhibit 51 - Part 5, # 14 Exhibit 52, # 15 Exhibit 53, # 16 Exhibit 54, # 17 Exhibit 55, # 18 Exhibit 56, # 19 Exhibit 57, # 20 Exhibit 58, # 21 Exhibit 59, # 22 Exhibit 60, # 23 Exhibit 61, # 24 Exhibit 62, # 25 Exhibit 63, # 26 Exhibit 64, # 27 Exhibit 65, # 28 Exhibit 66, # 29 Exhibit 67, # 30 Exhibit 68, # 31 Exhibit 69, # 32 Exhibit 70, # 33 Exhibit 71, # 34 Exhibit 72, # 35 Exhibit 73, # 36 Exhibit 74, # 37 Exhibit 75, # 38 Exhibit 76, # 39 Exhibit 77, # 40 Exhibit 78, # 41 Exhibit 79, # 42 Exhibit 80, # 43 Exhibit 81, # 44 Exhibit 82, # 45 Exhibit 83, # 46 Exhibit 84, # 47 Exhibit 85, # 48 Exhibit 86, # 49 Exhibit 87, # 50 Exhibit 88, # 51 Exhibit 89, # 52 Exhibit 90, # 53 Exhibit 91, # 54 Exhibit 92, # 55 Exhibit 93, # 56 Exhibit 94, # 57 Exhibit 95, # 58 Exhibit 96, # 59 Exhibit 97, # 60 Exhibit 98, # 61 Exhibit 99, # 62 Exhibit 100, # 63 Exhibit 101, # 64 Exhibit 102, # 65 Exhibit 103, # 66 Exhibit 104)(Kohlmann, Susan)

To: From: Cc: Bee: Received Date:

IIStephen Choll .:[e-mail]::

Subject:

2006-10-11 01 :48:11 CST (Monetezation-subteam) Fwd: Question #11 - updated v2.2

current track on Question #23.
please shoot me feedback/edits/suggestions via email

we will probably get together thurs/fri to discuss

Stephen
---------- Forwarded messge --------From: Stephen Cho .:[e-mail]:: Date: Oct 10, 2006 5:46 PM Subject: Question #11 - updated v2.2 To: Charles Wiles .:[e-mail]::, [e-mail], David Eun -:

[e-mail]::
Cc:
Attached is an updated, cleaner version, based on the discussion this morning with Dave, Charles, and i.

i will take primary responsibility for overall integration, but Charles was going to spend more time on the Intemational section; Dave to spend more time on the Content Priorities section; and myself to develop the Enabling

Products/Platforms section.
more to 'come, but this is a cleaned up version we can all run from. (Please send me edits, updates based on this and i will integrate.)

Stephen
Attachments:
Strategy 2007 Question -23 - v2.2.doc

EXJ:(. Iit. (t' IB T NO. o
A. IGNACIO HowMlR,RPR

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Strategy 2007: Question #23

"What is the best way to monetize all the content from traditional media and how will we win? Wil Y ouTube get there first?"

Interpretation of the Question:
Monetization is one outcome of the viruous cycle of benefits flowing from end user value to content provider value to advertiser value to Google value. We focus on five key strategies to win, with implications for all four stakeholders in each.

Recommendations:

1. Help traditional media companies accelerate and optimize the distribution of their content online
2. Build a business and technology ad buying/sellng platform position in

traditional media (TV, radio, print) married to online
3. Provide industry-leading "self-servce" video advertising capabilty for mid-

market companies

4. Become premier provider of community! user-generated content technology products
5. Become premier technology provider of personalzation for entertainment-

oriented content search and experience 6. Provide more Google content value to end users through parerships with
access device vendors (~toolbar-lie deals)
7. Specific response on Y ouTube.

1. Help traditional media companies accelerate and optimize the distribution of their content online
a. Focus on library/archive content first, prenúum content later b. Pocus on ad-driven model first, but also support download-to-own
c. Focus on better indexing, tagging, discoverabilty: improve the inventory

(more sub-segments and text-based tagging of long-run video, audio)
d. Focus on better metrics, analytics, reporting, liecycle management
e. Provide traditional content parners with access to Google search,

analytics, ad-targeting technology and content serving infrastructure

i. For all content parners, Google provides onlie business and technology expertise, rich set of onlie search and advertising tools from indexing and content management to end user behavior modeling, reach into the ad syndication network, and extensions to
support mobile data platforms
ii. For smaller players (and some larger players) without sufficient

infrastructure (or desire to spend), Google can also host their content directly, and provide dramatic scale and cost benefits (cf. SUNY Press "Google Book Search inside" deal)

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2. Build a business and technology ad buying/sellng platform position in

traditional media (TV, radio, print) married to online
a. Television, Radio, and Newspapers/Magazines are the three dominant

advertising markets (in addition to online advertising). Each has an ad sales and distribution industry that involves several common features
i. A metrics and analytics business (Nielsen for TV, Arbitron for

radio) showing audience size, demographics, trends. Some are industry-wide, some are proprietar (e.g., ABC Radio uses its own mctrics to scll to ad buycrs)
ii. An ad inventory technology provider (third pary or proprietar).

Marketron in radio, for example, is an ASP providing ad space available, tracking, and sales connecting about $9B of available
radio ad space with ad buyerslMadison Ave.

iii. Media buy consultants: with client-driven and demographic analytics to help media buyers find particular demographic audiences in specific markets, usually across media. Vision is such a consulting firm that helps its clients find the right avails.
iv. Sales force: 3rd pary resellers and direct sales forces of media

companies for sellg of ad inventory (under increasing margin

pressures) b. This ad buying/selling influence space seems appropriate for Google from a strategic perspective in terms of industry platforms, technology driven, across multiple content providers c. Google's traditional strengths in online metiics, analytics, lifecycle management and real-time feedback could be leveraged to provide similar metrics for traditional offine media
d. Google could also build a position as an ad inventory technology provider

- either within industries (acquiring Marketron and like players), or building a unique cross-platform technology platform and penetrating each of the traditional markets as well as the online market. Google could more effectively drive ad monetization into the longer tail in each offline space. e. Building or buying media buy consultants or a media ad sales force seems further afield for Goog1e. Companies in ihese spaces would instead be more natural as parners, with Google providing (c) and (d) above.
3. Provide industry-leading "self-servce" video advertising capabilty for mid-

market companies
a. Simplicity of GoogJe's "self-service" text-hased advertising has heen

extremely valuable for the mid-market, especially to target the long tail

b. At the same time, the cost of production quality video ad creative content is prohibitive for the mid-market
c. Provide a set of online and offine software tools to help mid-market

companies build short, effective video ads with the same degree of
simplicity and effectiveness as text-based ads (tools include: library

of stock video content, video editing, storage, templates and suggestions,

etc.).

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d. Then serve these video ads in a targeted wayan Google Video and other video destinations (a video ad syndication network) using effective, targeted ad algorithms similar to those for our text-based search e. Provide this tool set free to all potential advertisers as an assistance to driving useful, relevant video ad traffic (on which Google takes a rev
share)
f. Spot Runner is a Los Angeles-based star-up company with technology in

this space that would be worth lookig at more closely

4. Become premier provider of community! user-generated content technology products
a. What: range of community/DOC products/tools for both onle and

offine worlds: creating and finding relevant personal profies, linking, sharing, subgroups, etc. Enrich community with multiple Google
products: video search and sharing, image search and sharing, audio

search and sharing, mail, messaging/chat, etc.
b. Where: to help build communities/DGC on Google properties, on other

major destinations (Pacebook, Viacom, NBC, .. .), and to all individual end users to create their own social networks/ DOC communities

c. Why: across the open and fragmented world of multiple onlie communities and onlie community groups, Google provides universal
search, sharing, and targeted advertising capabilties

5. Become premier technology provider of personalzation for entertainment-

oriented content search and experience
a. Content, especially entertainment-oriented content is very highly

dependent on personal preferences and tastes
b. The one-dimensional tracking of web relevance (highest page rank =

highest relevance) breaks down significantly for this personalized taste c. What: Need to create a rigorous, universal personalization! taste-driven relevance and raning technology
i. Enables individuals to specif personal preference profies
ii. Tags all content and all reviews of content along the same

parameters iii. Relevance of search and desire for community-based sharing can then be provided in a way matched to one's own personal preferences
iv. Relevant not only for proactive searching and sharing, hut also for

pushed content (others lie you also liked ..., abilty to subscribe to push-channels of recommendations or content that match your profie - infinite number of channels driven by personal profies) d. Why: by providing this technology free to all major and mior content providers and content reviewers, Google can drive optimum end user benefit by enabling individuals to fmd and be served the most relevant content in a much more personalized manner. Provides opportunities to maximize ad-driven revenues associated with the more personally targeted

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delivery of content.
6. Provide more Google content value to end users through partnerships with access device vendors (~toolbar-like deals)

a. Benefit for end users: be able to better give users what they want: The
best discoverabilty, search, valuable targeted advertising, and cross-

platform distribution of content: that is, I can best find and best get to the content I want on any individual platform and also pulling from one platform to another (e.g., TV content on mobile devices) b. What: embed a range of Google technologies with access equipment vendors 1. Indcxing, mcta-data, tcxt-bascd tagging, scarch, discovcrability
ii. Personalization, recommendation, targeting technologies
ii. Superior metrics, analytics, trends, reporting

iv. Superior ad targeting, liecycle management, real-time feedback
and optimation technologies

v. Embedding of multiple enrichment products: video search and
sharing, image search and sharing, audio search and sharing, mail,

chat/messaging, etc. c. Who: Which access equipment vendors? Mobile devices and Intemet-toTV devices as the top priorities. i. Mobile access devices (PDAs, cell phones, etc.)
ii. Intemet-to-TV access devices (Apple's iTV, Cisco (Scientific

Atlanta and Linsys) IP-set-top-boxes, Motorola (General Instrument) IP-set-top-boxes, Sony, Samsung, etc.)
iii. Intemet-to-Radio access devices

iv. Internet-to-Phone access devices

v. Internet-to-eBook access devices
vi. Intemet-to-ePainting access devices

d. Why: Google benefits by embedding search, recommendations, and advertising across critical content distribution gateways/ access media
7. Specific response on YouTube.
Despite the intervening acquisition, some general comments. In short,

community/UGC is critical and should be pursued and supported on multiple fronts. YouTube should also be thought of as a proxy for other start-ups and
community- focused companies. a. We recognize and support the lJOogle-like drive toward end user henefit

first, and monetization only indirectly second. By developing and audience following the users first, YouTube has created advertiser and monetization value, as evidenced by their recent large media company deals
b. Challenges from both a business model perspective and a legal liabilty

perspective in terms of pornographic and copyright infringed content as among the primary drivers of YouTube traffic
c. Google should be in a position to provide superior monetization

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1. Developing technology for tagging and tracking copyrighted

material ii. Integrating search and ad targeting algorithms to drive maximum monetization d. YouTube should also be considered as a proxy for other communityfocused companies (in different ways: MySpace, HiS, FaceBook, iTunes,
NetFli, Amazon, eBay, Skype)
i. In general, support going after end user benefit first and getting the

audience - downstrcam benefits on directly targeted advertising

and indirectly through more traffc to core web search ii. In general, the focus on trusted community environments of diffcrcnt types: requiring community toöls, community contcnt, and active community policing
iii. Across all Google's content domains, need to be midful that the

mechanics of indexing/liing can be replicated, but that the stickiness of UGC and community is what drives audience and retention for destination sites

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