The Viacom YouTube complaint makes for good and unsurprising reading.
It looks like they have been paying close atttention to Mark Cuban's blog.
The case law is untested, so who knows where a random court decision will come out, but my reading of the letter and definitely the spirit of the law are with Viacom.
Youtube claims protection under the DMCA as a hosting service which is borderline ridiculous. To qualify they have to not exercise control over the content, not financially benefit from it and take down copyright violations when made aware of them. They only do the latter.
With uploaded content, Youtube: a) asserts a license to redistribute b) redistributes with its logo on it c) sells advertising around the content
I host this website and others at Rackspace which actually is a hosting company. I am pretty sure if they did a, b or c noted above they would lose every legitimate hosting customer they have.
Maybe Google will get lucky or Viacom will fold, but they have enough money that they should stick this one out and not just settle for the better licensing contract that Google will come back with.
And to those like Henry Blodget who think the online video game is over and the media companies should just fold, well, he is being a bit short-sighted.
Internet is the future of video and we are about 24 months into its mass market existence. This is not yet the time to panic and surrender your crown jewels if you are a media company.
Just like Geocities was not the future of home pages, Youtube is likely not the end of the game in this space. Does anyone really believe that 10 years from now, we will be watching video online in anything that resembles the current Youtube?