Universal Suit Could Impact Future Adult Downloading

John Stuart
LOS ANGELES — In a move that could impact adult material shown on user-generated Internet sites, Universal Music has filed lawsuits against two video-sharing websites for encouraging downloads of its copyrighted material. These are the first of an expected flood of lawsuits initiated by the established media industry against video-sharing sites.

The Universal suits were filed against Grouper.com and Bolt.com, claiming that the sites had built up traffic by encouraging users to share music videos of its artists without their permission. In one incident, the complaint alleges that Grouper – recently acquired by Sony Pictures Entertainment – logged more than 50,000 views of the Mariah Carey song “Shake It Off” without the company’s permission.

User-generated sites have exploded in popularity over the past few months, highlighted by last week’s Google purchase of YouTube for $1.65 billion. A large number of files being shared right now are adult content, and according to industry insiders, that figure will grow enormously with the expected improvement in bandwidth, speedier download times and new download portals like Internet-ready TV. This would present the same dilemma to adult producers that the music industry now faces – the advantages of presenting content to a vast new web audience versus the risk of huge copyright violations and revenue losses.

Prior to filing its lawsuits, Universal had threatened to sue YouTube for similar copyright infringements, before reversing themselves and signing a partnership with the company last week. YouTube avoided the suit by agreeing to pay a small licensing fee for the material and to share associated advertising revenues. It has also pledged to implement new systems to strengthen its copyright protections.

Yahoo and Microsoft’s MSN have reached similar deals with record companies, and News Corp.’s MySpace is in negotiations.