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

Filing 214

DECLARATION of William M. Hohengarten (Part Eight) Ex. 160 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 161, # 2 Exhibit 162, # 3 Exhibit 163, # 4 Exhibit 164, # 5 Exhibit 165, # 6 Errata 166, # 7 Exhibit 167, # 8 Exhibit 168, # 9 Exhibit 169, # 10 Exhibit 170, # 11 Exhibit 171, # 12 Exhibit 172, # 13 Exhibit 173, # 14 Exhibit 174, # 15 Exhibit 175, # 16 Exhibit 176, # 17 Exhibit 177, # 18 Exhibit 178, # 19 Exhibit 179, # 20 Exhibit 180, # 21 Exhibit 181, # 22 Exhibit 182, # 23 Exhibit 183, # 24 Exhibit 184, # 25 Exhibit 185, # 26 Exhibit 186, # 27 Exhibit 187, # 28 Exhibit 188, # 29 Exhibit 189, # 30 Exhibit 190, # 31 Exhibit 191, # 32 Exhibit 192, # 33 Exhibit 193, # 34 Exhibit 194, # 35 Exhibit 195, # 36 Exhibit 196, # 37 Exhibit 197, # 38 Exhibit 198, # 39 Exhibit 199, # 40 Exhibit 200, # 41 Exhibit 201, # 42 Exhibit 202, # 43 Exhibit 203, # 44 Exhibit 204, # 45 Exhibit 205, # 46 Exhibit 206, # 47 Exhibit 207, # 48 Exhibit 208, # 49 Exhibit 209, # 50 Exhibit 210, # 51 Exhibit 211, # 52 Exhibit 212, # 53 Exhibit 213, # 54 Exhibit 214, # 55 Exhibit 215, # 56 Exhibit 216, # 57 Exhibit 217, # 58 Exhibit 218, # 59 Exhibit 219, # 60 Exhibit 220, # 61 Exhibit 221, # 62 Exhibit 222, # 63 Exhibit 223, # 64 Exhibit 224, # 65 Exhibit 225, # 66 Exhibit 226, # 67 Exhibit 227, # 68 Exhibit 228, # 69 Exhibit 229, # 70 Exhibit 230, # 71 Exhibit 231, # 72 Exhibit 232, # 73 Exhibit 233, # 74 Exhibit 234, # 75 Exhibit 235, # 76 Exhibit 236, # 77 Exhibit 237, # 78 Exhibit 238, # 79 Exhibit 239, # 80 Exhibit 240, # 81 Exhibit 241, # 82 Exhibit 242, # 83 Exhibit 243, # 84 Exhibit 244, # 85 Exhibit 245, # 86 Exhibit 246, # 87 Exhibit 247)(Kohlmann, Susan)

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;i; From: Sent: To: Subject: Attach: Steve Chen -csteve@youtube.com). Friday, July 22, 2005 8:29 AM YouTube Group-c~ Fwd: introductions - Charles Chariya Message Text.txt;YouTube Marketing Analysis - Charles Chariya July 22nd 2005.doc Actually, everyone should take a look at this. I originally though introductions was only appropriate for Chad because marketing = content/design but this may be interesting to everyone. -s Begin forwarded message: From: "Charles Char�ya" '" ~ Date: July 22, 2005 9:17:30 AM PDT To: "Steve Chen" "'steve@youtube.com~, "Hurley Chad" "'chad@youtube.com~ Subject: RE: introductions. Charles Chariya you, Steve and the rest of Steve - thanks for the introduction. Chad, I'd love to meet up with the team next week. I am available either Tuesday or Wednesday night. Let me know what's best for you. Steve and I have been discussing Y ouTube over the past week, and I think we've had some fairly productive discussions. I really think there's huge potential, and I'm excited about the possibilities. I spent a few hours last night and put together a topline marketing this is too forward, but analysis, from my perspective. Forgive me if the concept really got my creative juices flowing. Also, I've asked the surfng departent here at Yahoo to include Y ouTube to the directory, and they'll be reviewing it later today. This should increase page rank for both Yahoo and Google, which should result in higher search results placement and hopefully, higher traffic as a result. Charles -----Original Message----From: Steve Chen (mailto:steve@youtube.com) Sent: Friday, July 22,2005 10:51 AM To: Hurley Chad; Subject: introductions hi chad-this is charles. a friend from imsa. he's the guy that i've spoken to HIGHLY CONFIDENTIAL - ATTORNEYS EYES ONLY JK00006259 i:l=ni=~Ir.l\a Ti=n r.nl\l=lni=l\Tlal you about who has worked at yahoo for the last 5+ years. he's been working in their marketing/sales department in new york city for the last 3 years. he'll be coming out here next week for a visit and we should try to arange a time to meet up. i think tues/wed nights are open for you, charles? -s HIGHLY CONFIDENTIAL - ATTORNEYS EYES ONLY JK00006260 ~, YouTue Marketing Analysis July 2l\ 2005 Charles Chariya r;t;i;!~ '&f M l'! Overview YouTube is a online video streaming destination which allows users to quickly and easily upload, watch, and share video worldwide. Usage and Growth Launched in June 2005, YouTube has grown in popularity and usage. There are currently thousands of videos which users have uploaded to the site, and tens of thousands of monthly unique visitors. Technology YouTube has developed a proprietary video conversion technology that converts video from standard digital formats (avi, mpg, etc) into a quick-loading and streaming flash format. *** * * * ** * * * ** ** * * * * ** ** * * * * ** * * * * *** **** ** ** * * * **** * * * * * * * * * ** * * * * * * * * * Si te Overview..........................................................................................................2 Finding Content .................................................................................................2 Sharing Video......................................................................................................3 User Analysis (Current and Future) .........................................................4 Individuals ................................................................... .......................................4 Film Producers....................................................................................................4 other Professionals ........................................................................................5 Competitive Analysis..........................................................................................5 Content Sources .....................................................................................................6 Risk Areas.................................................................................................................6 Content.....................................................................................................................6 Advertisers ..........................................................................................................6 Technology.............................................................................................................6 Marketing Opportuni ties...................................................................................6 Media Advertising Options ..............................................................................7 Advertising Landscape .......................................................................................7 Conclusions and Next Steps............................................................................8 Proposed Revenue Models...................................................................................8 HIGHLY CONFIDENTIAL - ATIORNEYS EYES ONLY JK00006263 REDESIGNATED CONFIDENTIAL Site Overview Finding Content Currently, the site has minimal navigation, and is focused around a personalized interface for the content. Finding content can be done via search, browsing thru links (uploaders, favorites of other users, random frontpage streams), and via tags. ll:t!:~:!!: .WlI~lllr,:~~~ :~:! ..~ ~'~'!Ei:: �t""l't:�rt. 3! !Jill,�i:i';l'm.�" im~;~:'! ~�l1rii.l�:!..~J:M!: t!ki:ie;~.Pl; eMu =d::~~=: li:.m:~.il: �!:,t: &aD Mor~ T~!J! :t b E E: ~t.:~l;E!�=1nC6 t~ SUGGESTIONS: YouTube Reviews (hire copywriters), Add Length to the description of the videos Also available is finding video via Recent Uploads, Most Popular, Most Discussed, Most Added to Favorites, and Random. SUGGESTIONS: Categorize Videos (hire categorizers), User Rating System HIGHLY CONFIDENTIAL - ATTORNEYS EYES ONLY JK00006264 REDESIGNATED CONFIDENTIAL Sharing Video Uploading is quick and easy and requires registration. Y ~ w-~:ip�/t"'il..rt(XWX�.wt~. -5l-J'IU; FIo'J~ l'l' P~! .='lliiJ~I1:uIti ~~,..;.,~ Ll':l II!' 'l�\'u:1 iri~u. ('~w~,wu,_,~,w"""."'_._: (JU~ ~;l�;fu Uwiiim~ r . ": PDto~nL : .ja:IQ'l;OIV1):'Ut1;t' I:Eiijiu:;'1 iwi"i:.1' .1~.,t~C'(~61d~. a:.~I~hr'''II~~l1l ~!~:tlth�'tlll"ff:1�"~ r�:Y"er.~'Intir.u.t"t~ SUGGESTIONS: Require several additional fields (Age/Birth date, Gender, Occupation, Industry, Zip Code) for future targeting/profiling purposes Once registered the uploading and sharing of videos is easy and seamless. YOUiil-....._".."".._........'I...'",~"",1 ~ t.'~.l1v""-.r")I'ld~Io~' ikf."""'..,.,..'''.....'''''''.....'j lltlb.~~lW!~lliW VL!..M.W:fli..U,m ~~~~lJ~~,~r~V?~t.~ji':~jtm:~I:~IITjm:~:~~~:i:ffm;~~mi~;:ijm:1~~lmr~1~r:r:~j~i~jH:!~g;~n~!j~t�~f:f~i1:!jti~��:W~~: \!~�.~t.,ilo~~ ,...,,.'" l"...._.................."................._..."...".. Tit~!.~....,~..........1t~~"O't1_I,~I.ei .. l ~. ;;;:;~d~;;.;,~~ ,. '..I."'..,.....................'t.i..h'.......,.. ... : i.i.~::: &'U5t r:", J:~ItHI~ll� 1'1l~�W1ll!I�""'U:;~~m;'ldirl C 1'.:Cc�\17'Ji. !:\""~flMh rpn""vt:o �.~p:Ji:~ .1i:i....I,oiJ.rr.!. :i.1e-r.~Uol:t~U!lt; ~~'f r:-::~:~~r7::::.f"lr~"::~R.? ,...-~~.~_........._.._.- "" Heiio.~S(Q)IbQIt! Uploal1V�daos U Brt,tlSe: VlthHHJ !la.road, ra~ Gt1(1 �tllf� yawwdeos l'l�t1cA'A�C! IJyTegs: ~ tower ;: il :I~ upload to YouTube. Pre-checking procedure to rej ect non-supported file formats (before upload takes place). Allow for non-video files to be SUGGESTIONS: Application on-desktop to drag/drop video files, and auto- uploaded converted and shared (mp3, wav, other audio) . HIGHLY CONFIDENTIAL - ATTORNEYS EYES ONLY JK00006265 REDESIGNATED CONFIDENTIAL * * * * * * * * ** ** * * * * ** * * * * * ** * * * * * * * ** ** * * ** * * ** * ** * ** * * ** * * * * * * * * * * * * * * * * * User Analysis (Current and Future) Indi viduals - Individual Uploaders The majority of the content on YouTube is currently from random users. These users not only upload their own work, but can potentially upload publicly available content of viewing. Risk area here is copyright as many videos which are uploaded are not the property of the uploader. - Video Sharers Video sharers are individuals that create, edit, and share video for public or private consumption. This might include baby videos, graduation video, or just hanging out with friends. This may become the mainstream user for YouTube over time. To increase usage by this group, you may want to consider partnering with hardware manufacturers (Kodak, Sony, Canon) as the video sharing destination of choice for people who purchase video capable cameras. - Video Resume Video Resumes is a fairly specific subset of the individual group. These may include people who want to share their work sample, such as actors, but this can also become mainstream if YouTube were to partner with Monster. com or Hotjobs.yahoo.com. - Vloggers Vloggers are people who keep regular diaries or reports using video on the network. YouTube could be an easy way to help Vloggers focus on content, rather than the myriad hosting, streaming, bandwidth issues that they currently may face. Film Producers Film producers are really broken out into two different types, those that are made, and those that have not made it. For producers and directors that are seeking to break into the industry, YouTube could be a very quick and easy business card to showcase their work. Allowing for vanity URLs and customization of the showcase page would be a premium offering, and would provide an extremely valuable service. Business Users - Training Video On a corporate basis, video is used sparsely for business purposes. The main issue relates to delivery, and YouTube can provide a means to quickly and easily solve this issue. Not only corporate video, but partnering with instructional video companies to make the current libraries accessible may be a good investment. - Video Site Operators (Pay per content sites) Another source of potential revenue is creating an Enterprise version of YouTube. This may require some engineering to allow for secure 3rd party referrals to content which is hosted and served by YouTube. Some consideration here would be increased resolution, disk space, private entry, reporting, and security precautions. Pricing to such site operators would likely be fixed monthly fee + streams/bandwidth/usage fee. Secure viewing might require a domain key authentication to HIGHLY CONFIDENTIAL - ATTORNEYS EYES ONLY JK00006266 REDESIGNATED CONFIDENTIAL party site. validate that the user requesting the stream is a valid user of the 3rd other Professionals - Musicians (Music Videos) Music Video distribution may be an opportunity. Launch (Yahoo Music) was built upon the Music Video and Audio Streaming, had great support in the music community, and there may be some room to build off of this type of success. - Athletes Scouting Reports, sample video, etc. This is a fairly specialized marketplace, however sports is a highly monetized and competitive space. * * * * * * * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * * * ** * * * * * * * * Competitive Analysis http://ww.archive.org/stream - Internet Movie Archive allows for users to upload and stream video in any format. This site still suffers from the delay time in buffering which YouTube avoids by converting files to flash video. Many VLoggers currently. use archive.org to host their media files, and use other sources to host the creative/copy for the vlog. Itunes - Apple's site which allows for video sharing/streaming. This site is limited as most files are in Apple QuickTime format, which does require additional installation for normal PC users, before being able to view. YouTube also requires Flash, but the penetration of Flash is currently higher than the penetration of QuickTime. Vlog. com - Video Blogging site which sells software to create and upload video blogs for streaming. Software sells for $99 and the current employees provide vlogs which exemplify how the software and streams work. http://blip.tv/ - Turnkey Vlog site, uses Archive.org to host/ stream video. Requires Creative Commons license or release to the public domain. Directories http://videoblogging-uni verse. com/vlogs/ http://ww.mefeedia.com/feeds/ Newsgroups http://groups.yahoo . com/ group/videoblogging/ Audio Competi ti ve Analysis http://ww . ourmedia. org/ provides ~free storage and free bandwidth for your videos, audio files, photos, text or software. Forever. No catches. H http://podlot . com/ is a ~cheap place to park your podcast. H Accounts cost only $5. http://ww.audioblog.com/ offers podcast hosting and recording tools for $ 50 per year. HIGHLY CONFIDENTIAL - ATTORNEYS EYES ONLY JK00006267 REDESIGNATED CONFIDENTIAL ** * * ** ** ** **** ** ***** **** * *** * * ****** **** ** * **** * * * * ** * ** * ** *** * ** ** * ** Content Sources Content is king. The current content on the site consists of random snippets which have been uploaded from various sources. Some are legit, others may be infringing on standard copyright (made by others, shared on the net, and then uploaded by unrelated party to YouTube) . As YouTube grows, a content strategy must be in place to allow for growth in the right directions. Licensed content thru partnerships, requesting content from original sources, sponsoring and producing original content are all good ways of building the right type of content going forward. ** * * * * * * * * ** * * * * * ** * * * * * * * * * * * * * * * ** ** *** * * * * * * ** * * * * * * * * * * * * ** * ** * * * * * Risk Areas Content One major risk area is video which is not intended to be shown to a large audience. This could include copyrighted materials i but cpulq also include personal videos which may show people in a negative light. Although the policy when uploading states that the video must be legit, YouTube may be liable for any damages which copyright holders may press. Advertisers Another major risk area is for advertisers and partners. Most quality advertisers are very specific and particular as to how their brand is portrayed. Any association to shady topics (sex, drugs, gambling, and to a lesser degree, alcohol) may make advertiser shy away from a partnership. Technology There may be a risk from other sites and companies to develop products and services that make YouTube obsolete. This may come from direct competi tors (iFilm, Apple Quicktime, etc) or from technology companies (Google, Microsoft, Yahoo). Additionally, the ability for users to bypass the site to view video content thru embedded video may also be a technology risk, since it stops YouTube to fully monetize a users consuming the video. * * * * * ** * * * * * * * * ** ** * * ** * * * * ** * * * * * ** * * * ** * * * * **** * * * * * * * * * * * * ** * * * * * * * * Marketing Opportunities Al though over the next few months, there will be tremendous growth in usage from word of mouth; there are many ways to accelerate the pace of trial and usage of the site. Some standard methods of marketing include: 1. Hiring a Publicist 2. Issuing Press Releases 3. Join public forums for related areas a. Advertising in film schools b. Assisting/Sponsoring vlog groups and events c. Assisting/Sponsoring in film festivals d. Partnership with relevant advertisers (hardware/software companies) e. General seminars and talks with schools, businesses, etc HIGHLY CONFIDENTIAL - ATTORNEYS EYES ONLY JK00006268 REDESIGNATED CON FIDENTIAL 4. Advertising a. Listed in directories of companies such as Yahoo! b. Text-based advertising for related terms c. Advertising in public areas for awareness building (Times Square, Central Park, other public areas) 5. Promotions and Contests a. Video Contest wi a Prize b. Tie-in wi vendors that will be doing such events * ** * * * * * ** * * * * * * * * * * * * * * * * * * * * * * ** * * ** * * * * * * * * * * * * * * * * * * * * * * ** * * ** * * ** * Media Advertising Options Although it i s obvious YouTube will have video ads in the stream, I see the monetization opportunity in a few key areas: (a) the front door - which should have the most traffic - could be exposed to advertisers for take-overs for massive one-day events. areas - although you do use .tags, I think that a human (b) content categorizer would help people navigate more easily thru the massive amounts of available video. Again, takeovers of "Autos" or "College" or even the existing "Most Popular" areas could be easy wins with advertisers. (c) video area - so obviously, a video ad before the video, but consider breaking up videos (by a professional editor) into 4-5 minute segments to insert additional video ads. Obviously a take on what's done in network. Also, on the right hand side, I'd suggest using an industry standard Ad Position. ** Note: there will be some issues wi this type of advertising if YouTube allows users to stream using the Embed method (which simply streams the video). Advertisers may not want their video ads running in un-controlled areas, however this is a hurdle which can be overcome. (d) sponsored search results - this may be an easy fall-back, but should be considered, especially if users are doing a lot of search * * * * * * ** * * * * * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * *** * * * * * ** * * * * * * * * * * * ** * * ** * activity. Advertising Landscape In 2006, $125 billion will be spent in advertising in the US, $114 billion will be spent in offline media outlets, while only $10.7 billion will be spent online, according to Jupiter Research. For the foreseeable future, online media spending will continue to grow at a 18-20% rate, while offline spending will only grow at a 4% rate. Rich Media (which Video Ads is a sub-set) has grown relatively quickly in the last year, however they are not a large part of the overall online media spend. This is mostly due to the restrictions that many sites have (size limitations, uninitiated audio rules, etc). In 2003, Rich media made up $200 million of the $3.3 billion spent online for marketing, or les s than 1 %. HIGHLY CONFIDENTIAL - ATIORNEYS EYES ONLY JK00006269 REDESIGNATED CONFIDENTIAL * * * * * * ** * * * * ** * * * * * * * * * ** * * * * * * * ** * ** * * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * * * Conclusions and Next Steps 1. Determine the short-term goals a. Exponential Growth in User Base over next 3-6 months b. Increase the amount and quality of video streams which are available to consumers 2. Determine the long-term priori ties a. Increase awareness in the Producer area (Contests or Promotions) b. Begin partnership discussions with advertisers and content producers c. Create solution for enterprise video streaming d. Create solution for video site operator streaming e. Create solution for vlogger video streaming * * * * * * ** * * * * * * * * * * * * * * ** * ** * * *** * * * * * * * * * * * * * ** ** * * * * * * * * * * * * * * * ** * * * * * Proposed Revenue Models A. Advertising (See Media Advertising Options above) B. Subscription / Premium Services for Individuals a. Video Resumes 1 Music Videos 1 Sports Scouting Reports B. Enterprise YouTube for Businesses a. Backend for businesses to host and stream video b. Secure streaming partner for vi�eo site operators (pay per view or premium video seller) C. Video Ad Streaming Provider a. Self-service video ad serving platform for advertisers and agencies b. Competitors include: i. EyeWonder http://ww.eyewonder.com/ews/ews FormatInstantPlayAd. cfm?id=1 ii. EyeBlaster http://ww.eyeblaster.com/products/rich media formats/ streaming v ideo. asp iii. PointRoll http://ww.pointroll.com/products/ overview. asp iv. Unicast http://ww.viewpoint.com/pub/advertising/ HIGHLY CONFIDENTIAL - A nORNEYS EYES ONLY JK00006270 REDESIGNATED CONFIDENTIAL

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