"What did you say?"
"A company with the same name as us is claiming we've infringed on their rights?"
"And now they're demanding that we immediately stop the infringement?"
"Otherwise they'll resort to legal action and sue us?"
March 21, 2006, was a Tuesday.
Thanks to YouTube's recent explosive growth—total users had already surpassed 35 million, with 40 million expected by mid-April at the latest, an average of 35,000 new videos uploaded daily, and 60 million daily views—this meant that by the end of the year at most, they would become the most popular website in the world.
And as of now, they were already the fastest-growing website in terms of user acquisition since the birth of the internet.
Uh—
Well—
The whole world knew that, at present, one of the largest communities on the internet was the Isabella Cult.
With a single sentence from Isabella, the logic of user acquisition since the birth of the internet had been completely shattered.
But that wasn't important, right?
Because YouTube was genuinely reaping the traffic.
So the company's CEO, Chad Hurley, was riding high.
He practically walked with sparks and lightning trailing behind him!
Especially after YouTube's daily views surpassed 50 million, he even began to entertain the idea of crushing Yahoo in two years, taking down Google in three, and toppling Microsoft in five.
It couldn't be helped.
After all, their boss had their own bandwidth pool.
The "unlimited traffic" strategy felt insanely good!
Aside from the fact that it cost them some shares.
Right, at the beginning of the month, they'd raised another round of funding from Isabella, giving up 10% equity in exchange for increased bandwidth.
This—
Honestly, it wasn't that important either.
Because they were only doing YouTube for a quick cash-out anyway.
The stronger the investors, the faster the company could grow; the faster it grew, the higher the chance of cashing out successfully.
However, just as Chad Hurley was thinking that, at this rate, he'd become a billionaire by the end of the year at the latest, something he least wanted to see—a lawyer's letter—suddenly dropped from the sky.
This—
The moment he heard the word "infringement," his ears perked up with a snap as he stepped into the office!
His eyes widened like bells!
He felt like his entire day's good mood was about to be ruined!
But after he asked who had sent the letter—
His nose lifted like a hunting dog's.
His head practically turned into a flat, round shape.
He'd thought it was some media giant targeting them!
But unexpectedly—
It was a manufacturing company?
What kind of nonsense was that???
"So what exactly is the background of this company called Universal Tube?"
Chad Hurley frowned deeply as he looked at YouTube's head of legal.
Yes.
Unlike other startups, YouTube had established a legal department from the very beginning.
The reason was simple.
They knew very well that the business they were engaging in operated in a legal gray area.
"Chad, it's a company from Ohio."
The head of legal said, "And the real reason they sent us a lawyer's letter is that their company's official domain name is very similar to ours. So when our site's traffic surged, users who typed the wrong address overwhelmed their site and crashed it. From their perspective, they ended up paying a lot of extra—uh, unnecessary communication fees."
"???"
The abstract explanation left Chad Hurley stunned!
Although the consumer internet had only been around for about ten years, disputes caused by similar domain names had happened quite a few times.
After all, domain names can be infinite, but memorable ones are limited.
But no matter how he thought about it—
The first legal warning YouTube encountered was because of a domain name conflict?
Uh—
It's not that domain conflicts can't happen!
It's that YouTube already had over 20 million videos!
More than 80% of them potentially infringed copyrights!
And in that situation, before the world-renowned copyright enforcers even made a move, the company with the similar domain name struck first?
This—was honestly hard to process—
Still, while finding it absurd, Chad Hurley also felt relieved.
As long as it wasn't a capital giant attacking them—
Everything else was manageable.
"Okay, so is this Universal Tube company big?" Chad Hurley asked.
"Not really," the head of legal replied.
"Alright, then what exactly do they want?"
"They demand that we immediately stop the infringement and compensate them for all losses. 'Stopping infringement' means shutting down YouTube, and 'compensation' means transferring the domain 'youtube.com' to them unconditionally."
"..."
Chad Hurley was stunned again.
After a long pause, he looked at the head of legal as if he were looking at an alien.
With a strained expression, he asked, "Do you think their demands are reasonable?"
"Not at all." The head of legal shook his head decisively.
"Then tell them to get lost!"
Chad Hurley roared—
"If they want to sue, let them file the lawsuit directly!"
"We at YouTube are not afraid of them!"
"And we will never bow to evil forces!"
With a roar, Chad Hurley ended the discussion.
Of course, it wasn't that Chad Hurley insisted on fighting Universal Tube in court.
Anyone who has run a company knows that when there are multiple decision-makers, no matter what issue arises—even if it can be easily resolved—you can't take shortcuts just to save costs.
The optimal way to handle any issue is to go to court, because once the judiciary intervenes, no one can fault you.
Otherwise—
You might think a dispute can be settled for fifty thousand.
But those looking to attack you will say you colluded with the other party to embezzle company funds.
After Chad Hurley's decision reached Universal Tube—
"Mr. Reporter, should we proceed directly with filing the lawsuit now?"
The young man excitedly grabbed his phone and called a reporter from the New York Post.
"Did YouTube give a clear response?"
The reporter's voice came through the receiver.
"They did. They said we're being unreasonable."
"Good. Then file the lawsuit today. I'll bring some friends over now to interview you."
"Okay, okay, thank you, thank you! Oh right, may I ask—what TV station are your friends from?"
"Fox. Why? Is there a problem?"
The reporter said, "If you want CBS or NBC instead, I can call them too."
"Oh—no, no, no—Fox is great—"
The young man said excitedly, "We thought it'd be some local station, but it's actually a national network? Oh—Mr. Reporter, your connections are incredible! You're such a great person!"
"Hahaha—no need to praise me—I'm not helping you for free, after all—right?"
In fact, when Universal Tube learned that simply suing YouTube could net them two million dollars, their first reaction was: this deal is worth doing! Their second reaction was to invite a Post reporter to help orchestrate it!
Because they didn't understand any of this.
At first, the Post reporter hesitated when invited.
He said he was just all talk.
He only knew some industry insider information and had no real experience.
It wasn't until Universal Tube assured him they wouldn't blame him even if it failed that he finally showed his fangs.
The Post reporter said that if it succeeded, he wanted 50% of the total compensation.
The lion-like demand made Universal Tube hesitate.
But the pause didn't last long before they agreed.
Because what they were planning against YouTube was essentially extortion.
And if you're conspiring to rob someone, why would anyone help you without a cut?
Not to mention—
Universal Tube even suspected that the New York Post reporter was deliberately pushing them to become robbers.
Yeah.
Rednecks might act like the world revolves around them, but they're not stupid.
After Universal wTube followed the reporter's advice and submitted the lawsuit to an Ohio court, YouTube received the summons on March 24, 2006.
That's right.
That fast.
Of course, it wasn't because the U.S. judicial system was efficient.
It was because in U.S. civil litigation, the service of process can be carried out by the plaintiff's lawyer.
So once the lawyer got paid, the summons could naturally fly from Ohio to California overnight.
But—
The complaint was delivered by the plaintiff's lawyer?
"Are you people insane?!"
The moment YouTube's legal team saw the summons delivered by Universal Tube's lawyer, they completely lost it.
Looking at their counterpart like he was an idiot, they said, "Universal Tube claims that because our users mistakenly accessed their website, they suffered 20 million dollars in losses? And now they're demanding 200 million in compensation from us?"
"No—just think about it for a second and you'll realize this is impossible!"
"Leaving aside the fact that you can't prove that the users who visited utube.com were actually our YouTube users, even if you could, our company hasn't even generated 20 million in revenue from all our traffic so far!"
"So when utube.com only had 100,000+ daily visits—"
"Universal Tube claims they lost 20 million because their site crashed?"
"What, do they have aliens living in their servers?"
"Or is their fiber optic cable transmitting cocaine?"
"What kind of law firm are you? How do you even take on a case this stupid?!"
Although every word from YouTube's legal team made sense, Universal Tube's lawyer chose the classic strategy of "not listening, not listening, can't hear you."
The well-dressed middle-aged white man shrugged with a smile and said, "Isn't it stupid not to make money when you can?"
"..."
YouTube's legal team was momentarily speechless.
For a second, it almost sounded reasonable.
Since Universal Tube insisted on going to court;
Since the lawyers they hired clearly saw their own client as a cash machine;
Then YouTube's CEO, Chad Hurley, didn't hold back.
He directly gave his legal team a clear order—"Crush this company called Universal Tube."
"I don't want to see them again!"
"Okay???"
The direction Chad Hurley pointed was the target of YouTube's legal offensive.
However, just as YouTube's legal team was getting ready to go all in, that very afternoon Pacific Time—corresponding to the evening of March 24, 2006, Eastern Time—Fox News made its move—
"Breaking News!"
"A rising star in the internet industry! Currently the world's most well-known video website! YouTube, a company invested in by the famous British artist Isabella Haywood, has recently become embroiled in an infringement lawsuit worth tens of millions of dollars!"
"A company has accused YouTube of violating their legitimate rights! YouTube's alleged infringement is suspected to be related to its tolerance of internet users freely uploading pirated videos on its platform!"
"And when this company took legal action and sent YouTube a lawyer's letter, requesting the removal of those infringing videos, YouTube's response was—'No!'"
"YouTube's arrogant attitude and continuous illegal behavior have pushed the company to its limit, leading them to officially file a lawsuit in their local district court in recent days!"
"According to informed sources, the district court has already accepted the case. The complaint has been delivered to YouTube by the plaintiff's lawyer, and a formal hearing date should be announced soon."
"Since the birth of the internet, piracy has always existed. In the eyes of many experts and scholars, the 'free' promoted by the internet is nothing more than collective robbery. The free knowledge, free videos, and free music enjoyed by the public are all the results of others' labor—they don't exist naturally. Therefore, our station will continue to follow this infringement case involving YouTube!"
"Because this case may very well become a landmark in the field of pirated video!"
"As of this report, third-party investigations have revealed that 80% of the videos on YouTube are pirated."
"So, can individuals uploading pirated videos to the internet grant legal immunity to the platforms hosting them?"
"This is important for everyone."
Fox's news segment wasn't long.
But in less than a minute, it dropped a deep-sea bomb into what had been a relatively quiet North America.
Everyone was shocked by the subject of the news—
"YouTube got sued???"
Everyone was shocked by the behavior described—
"YouTube is committing illegal acts and still boldly confronting the victim???"
Everyone was shocked by the conclusion—
"80% of YouTube's videos are pirated???"
To be fair.
After Fox News aired, the public in North America really was shocked.
They hadn't expected YouTube's business model to potentially be illegal.
But then again.
That shock didn't last long before people brushed off Fox's accusations.
As for why—
Two reasons:
First, who doesn't like free stuff?
No matter the era or place, ordinary people prefer high value at low cost.
If they had a choice, who would willingly embrace VIPs, SVIPs, NewTV, or early access paywalls?
So, does it matter to the general public whether YouTube has a lot of pirated videos?
Many people will never make a film in their entire lives!
If their interests are never at risk, why would they refuse free Tom and Jerry?
Because of morality? A sense of justice?
Please.
People with too strong a moral compass don't make money.
Second, YouTube never encouraged users to upload pirated videos!
"If I remember correctly, wasn't YouTube about recording our lives?"
"Yeah!"
"Didn't Isabella call her videos something like… vlog?"
"Right! It's like a video version of a blog!"
"So what does it have to do with YouTube if people upload pirated videos?"
"No idea—"
When something benefits the public, it's actually pretty hard to brainwash them.
It's like how even after something like QVOD died several times over, people still miss it.
To put it more bluntly—
If someone easily accepts being exploited, it just means they were raised too well.
But most of the time, the biggest function of public opinion is that it has no function at all.
The public thought Fox was overreacting.
But those who actually held power thought—
"What the hell???"
"They filed a lawsuit already???"
When NBC Universal saw Fox's report, they were completely stunned!
Because they hadn't expected Fox to move this fast!
And while scratching their heads in confusion, something started to feel off—
They immediately pulled out their phone and called MGM chairman Harry Sloan.
"Was it you guys who filed the lawsuit?"
"No way!"
Harry Sloan replied, "Didn't Fox show interview footage? The people on screen weren't from our legal department!"
"Then who sued YouTube?"
NBC Universal was confused. "Who's this crazy?"
"How would I know?!"
Harry Sloan said helplessly, "I'm trying to find out too!"
"So could it be Sony?" NBC Universal speculated.
"No way—"
Harry Sloan didn't even hesitate. "Howard Stringer might dare to mess with the Japanese, but when it comes to messing with Isabella—unless he wants to die, he wouldn't do something like that."
"..."
Fox's report left NBC Universal and MGM baffled.
As for the other companies—
Sony, Paramount, DreamWorks—they were all equally stunned, staring at each other in confusion.
And what about Time Warner and Disney?
When they learned that YouTube had been sued—and that Fox broke the news—Barry Meyer and Robert Iger's first reaction was that Rupert Murdoch had gone crazy again.
Their second reaction was—
"What's going on?"
Robert Iger took the initiative to call Barry Meyer.
Then both of them asked the exact same question at the same time.
Barry Meyer thought Iger was calling because he had insider information.
Iger, on the other hand, assumed that Meyer—who had first discovered YouTube and encouraged Isabella to invest—must know something.
As for that—
"Okay? You don't know anything either?" ×2
"..." ×2
Their perfectly synchronized confusion left both of them speechless.
After a brief pause, Barry Meyer was the first to react.
"I don't know what's going on yet."
"So I need to call YouTube first before we talk."
"But personally, I think Fox is targeting Isabella this time."
"Because Rupert Murdoch's actions—"
"Are way too obvious."
"He's not even trying to hide it."
Barry Meyer's view was immediately agreed with by Robert Iger.
"Yeah. So if necessary, we should reach out to Isabella first."
However, just as Barry Meyer called over Nathan Bailey, preparing to have him contact YouTube—
At YouTube headquarters,
CEO Chad Hurley had already seen through Fox's scheme.
"So—"
"Universal Tube is just a joke, right?"
"They're just an excuse for Fox to attack us?"
"Rupert Murdoch is pretty interesting…"
"To come up with a method like this to put himself on the moral high ground."
After a few remarks, Chad Hurley's faint smile turned cold.
He said to his assistant, "Notify Jawed Karim and Steve. Have them come to the company for a meeting."