Cuban, who co-founded HDNet and owns the NBA’s Dallas Mavericks, told a group of advertising executives YouTube would fail because its business model is based on copyright infringement.
“[YouTube will be] sued into oblivion,” Cuban said. “They are just breaking the law. The only reason it hasn't been sued yet is because there is nobody with big money to sue.”
One adult company that would agree with Cuban’s legal assessment is San Francisco-based Titan Media. The gay content producer has charged adult entertainment companies AEBN and Webnovas Technologies with copyright infringement stemming from the operation of the YouTube-styled PornoTube.com and Xtube.com, respectively.
Titan also brought suit against YouTube competitor Veoh, charging the company, which counts former Walt Disney Co. boss Michael Eisner as one of its board members, with allegedly using pirated adult content to build market share.
Speaking to a group of advertisers, Cuban had less harsh words for the general practice of viral marketing. But, he cautioned, the model is largely a waste of ad dollars because it’s hard to plan and control.
“User-generated content is not going away," he said. "But do you want your advertising dollars spent on a video of Aunt Jenny watching her niece tap dance?"
While YouTube did not immediately respond to Cuban’s comments, the company continues to vie for ad dollars. The site now has banner ads, promotions and sponsors. YouTube also has said it plans to introduce new marketing tools in the coming year.