Friday, March 31, 2006.
California.
Los Angeles District Court.
At the entrance of the grand building, a crowd of reporters armed with cameras and microphones surrounded a group of well-dressed white men in suits.
From the press group, the lead reporter called out loudly, "Hello, are you the attorneys representing Fox, MGM, and NBC Universal in their lawsuit against YouTube? If so, could you share the latest developments with us?"
Among those being interviewed, the lawyer walking at the front nodded. "Yes. Of course."
"As you can see, our clients—Fox, MGM, and NBC Universal—have filed a lawsuit against YouTube today. The reason for this is that YouTube has seriously infringed upon our clients' legal rights."
A reporter continued, "Could you go into more specific details?"
"For example, what rights of Fox, MGM, and NBC Universal has YouTube violated?"
"No problem, that part can be shared."
The lead attorney in the legal team said, "Over the past two months—or rather, ever since Ms. Isabella Haywood brought YouTube into the public eye through her vlogs—our clients began paying attention to the platform. Subsequently, they discovered that YouTube is flooded with a large amount of pirated content—"
"For instance, YouTube contains clips from our client NBC Universal's variety show Saturday Night Live—"
"As well as animated clips of Tom and Jerry, which are owned by our client MGM—"
"And parts of the animated series The Simpsons, which belongs to our client Fox—"
"Since these clips exist in complete narrative form—for example, segments from Saturday Night Live are uploaded as full skits—users can simply search for 'Lazy Sunday' on YouTube and watch the entire skit directly. Therefore, our clients believe that YouTube's actions constitute a severe theft of their intellectual property."
"So you immediately filed a lawsuit against YouTube?" the reporter pressed.
Hearing this, the lawyer who had been addressing the cameras glanced at the reporter beside him.
Then he shook his head. "Our clients initially intended to communicate with YouTube in a more moderate manner. They hoped to have the infringing videos removed through peaceful negotiation."
"However, while compiling records of the infringements, our clients discovered that it was impossible to fully account for all violations. By the time they began gathering evidence, YouTube already hosted 20 million videos."
"Moreover, the number of videos on YouTube continues to grow by tens of thousands every day."
"When the platform's database becomes so vast that it cannot be audited manually, our clients are no longer able to engage in precise, evidence-based negotiations with YouTube. After careful calculation, our clients also found that approximately 80% of the videos on YouTube are suspected of infringement."
"To put it bluntly, YouTube is essentially a hub for piracy. Its existence has already posed a serious threat to our clients' survival. That is why our clients have abandoned negotiations and chosen to file a lawsuit."
"Because at this point, only by shutting down YouTube can creators' rights be legally protected."
"Furthermore, our clients firmly believe that this lawsuit will not be an isolated case. Many other entities have also been infringed upon by YouTube—for example, Viacom, Sony Group, Time Warner, Disney, and DreamWorks. Copyrighted works owned by these companies can also be found on YouTube."
"Our clients believe that these corporations have likely already noticed YouTube's infringing behavior. Their lack of legal action so far is probably due to evidence collection. Now that our clients have taken the lead in filing suit, their lawsuits should follow soon."
For people living in the present, the beginning of 2006 has been nothing short of surreal.
Although there have been no major natural disasters or large-scale wars, the red-eyed accusations, the distortion of truth, and the incoherent claims have made the entire world seem utterly insane.
That's right.
In the eyes of the general public, what YouTube is going through right now is absurd to an extreme degree.
The reason for this reaction is simple—how long has YouTube even existed?
At most, about a year, right?
And many people only started learning about YouTube on January 1st of this year!
If Isabella hadn't suddenly posted a so-called video blog—"vlog"—on YouTube, many believe that even if they might have eventually heard of it, their attention certainly wouldn't have been drawn to it in 2006.
So—
When YouTube, before receiving Isabella's investment, was just a small website with around a million users;
When its explosive growth has lasted less than 100 days in total;
In just the past two weeks, a bunch of people suddenly want to take it down?
And the ones trying to do so include both industry giants and capital heavyweights?
Even if you didn't think about it with your brain and instead tried to reason it out with your backside, you'd still conclude that this situation is completely insane!
What's even crazier is that the companies currently suing YouTube already include Fox, MGM, and NBC Universal.
And judging by the trajectory of events, Viacom, Sony, Time Warner, Disney, and DreamWorks will likely join the lawsuit as well.
So—
Did YouTube break some kind of divine law?
Is it really going to be gang-beaten by eight major corporations just one year after its founding?
You should know—
The combined market value of these eight corporations exceeds 500 billion dollars!
And the United States' GDP in 2005 was only 13 trillion!
Right now, 3.8% of the world's largest economy is going after a startup?
Has this world seriously gone completely mad?
After NBC, FOX, and other mainstream North American media reported on the lawsuit filed by Fox, MGM, and NBC Universal against YouTube, the interview footage that spread across the globe left people everywhere in silence.
Although the general public has no clear idea of what is happening in those unseen dark corners, after a brief pause—everyone, almost in unison, began cursing those capitalists.
As for the reason?
Simple.
Because YouTube is useful—
"Motherf—! Are these companies insane? Are they trying to kill off another great site like they did with Napster?"
"Oh—sh—these giants make me sick—YouTube is my favorite site right now! No contest! Just watching videos there every day helps me relax! It cannot be shut down!"
"Damn! I think all this talk about piracy is just an excuse to attack YouTube! The real reason is that they're losing money! For example, the first video on YouTube to hit over a million views was Ronaldinho's Nike ad! In the past, ads like that had to be broadcast on TV, and TV stations would charge huge fees—but now? YouTube charges nothing! As long as someone uploads the video, it gets shown! This is basically a revolution against traditional media giants!"
"Hiss—that actually makes a lot of sense—"
"My God! So Fox, MGM, and NBC Universal are this sinister???"
"Oh my God—these companies should all go to hell!!!"
If someone were to revisit the judgments made by Barry Meyer and Robert Iger a few days ago, any reasonable person would realize that the two of them were wildly off in their assessment of this sudden incident.
They believed that Rupert Murdoch had Universal Tube file a lawsuit against YouTube to exhaust public sentiment—so that when he himself sued YouTube, he wouldn't face public backlash?
Current public opinion has already proven that public sentiment is not so easily exhausted.
Or rather, when something is closely tied to people's lives, they will continue to vent their emotions endlessly.
So, Rupert Murdoch's true intention in having Universal Tube sue YouTube is actually quite simple.
This move is called turning enemies into allies.
Because it allows him to turn everyone in the industry into his teammates.
And as for that—
"Mr. Stringer, we have to sue YouTube now!"
"Otherwise, we won't be able to make our stance clear to the outside world!"
Sony North America headquarters.
The heads of the copyright department and the legal department were both looking helplessly at Sony North America chairman Howard Stringer.
The copyright head said, "Now that Rupert Murdoch has exposed YouTube's rampant infringement to the public, we can no longer pretend to be unaware. If we do, others will follow YouTube's example and infringe on our rights."
"At that point—"
"Pirated content violating our copyrights will flood the internet!"
"Yes! Mr. Stringer! We must file the lawsuit against YouTube by next week at the latest!"
As soon as the copyright head finished speaking, the legal head nodded. "Mr. Stringer!"
"I understand your concerns! Sony has just established a partnership with Isabella, and it would be a great pity to cut it off recklessly!"
"But!"
"Our cooperation with Isabella is ultimately about making more money!"
"If this partnership causes us to lose a significant amount of money, then—"
"What is the point of maintaining it?"
"Right?"
"If Rupert Murdoch hadn't exposed all of YouTube's infringement issues, we could have continued to pretend ignorance and conceal the fact that we already knew about them!"
"If Rupert Murdoch had acted alone and taken the lead in suing YouTube, we could have used the excuse that their conflict made it irrational to follow suit and quietly coordinate with Isabella!"
"But now that Rupert Murdoch has cut off all our escape routes—"
"Mr. Stringer!"
"For the sake of Sony's development!!"
"Please sign this!!!"
At this point, the head of Sony's copyright department directly presented the document in his hands to Howard Stringer with both hands.
The deeply bowed posture made Howard Stringer purse his lips.
As he looked at the lawsuit document still carrying the scent of fresh ink—his expression grew complicated, and he let out a sigh. "I can sign this lawsuit…"
"But—"
"I need to make a call to Ron Howard first."
"I want him to tell Isabella that suing YouTube is not Sony's true intention."
"She must not hate us. If she must hate someone, she should hate Rupert Murdoch."
Under Rupert Murdoch's pressure, Sony—the one with the weakest ties to Isabella—was the first to fold.
At the same time,
Viacom headquarters.
Sumner Redstone was on the phone with the chairman of Paramount and the chairman of CBS.
After confirming that a large amount of pirated content did indeed exist on YouTube, Sumner Redstone rubbed his temples.
After a long pause, he finally asked, "How is Transformers coming along?"
"It's about one-third completed," the Paramount chairman replied.
"And what's the expected revenue?"
"It could become the second highest-grossing film in our company's history."
"Second only to Titanic?"
"…"
"Yes."
"You're that confident?"
"That's right. Because this subject matter is extremely strong. The future will belong to special effects, and Transformers was designed from the very beginning as a franchise. Like the HP series, in our projections—even conservatively—if the series successfully reaches three films, the total box office should not be less than 2.8 billion."
At this point, the Paramount chairman paused.
Two seconds later, he continued, "If we're not being conservative, we even believe it could go beyond five films."
"The global total box office shouldn't be less than 5 billion."
"Each installment could surpass 1 billion."
When the phrase "each installment surpassing 1 billion" was spoken, Sumner Redstone's eyes immediately lit up.
He admitted that he couldn't resist franchises—especially not one like HP.
So even though the toy manufacturing rights for Transformers were in Hasbro's hands, he still wanted to build this IP into something huge.
And as for that—
"I'll have the company's legal team prepare the lawsuit."
"We'll file against YouTube next Monday."
"But before filing—"
"Is Isabella still with the Transformers crew?"
"If she is, invite her to dinner."
"Tell her that suing YouTube is not my intention."
"If she wants to blame someone, blame Rupert Murdoch."
"And I can promise that after filing the lawsuit, I'll find a way to have the court consolidate the cases. When that happens, I can share every move Murdoch makes with her."
"Although I can't openly speak for her, since I have to protect Viacom's interests—"
"Passing along information isn't a problem."
"I can accept YouTube's existence, but they… have to pay some licensing fees, right?"
"That's it."
Rupert Murdoch's actions made it impossible for everyone to keep playing nice behind the scenes?
No problem.
Old-school capitalists have plenty of ways to show goodwill.
Although Sumner Redstone knew his promises held little real value to Isabella—because at this point, Time Warner and Disney were also being cornered by Rupert Murdoch just like they were.
As long as they also filed lawsuits against YouTube, they would definitely try to consolidate the cases and pass information to Isabella as well.
But that didn't really matter, right?
Redstone's promise wasn't meant to help Isabella win the lawsuit. It was meant to tell her that no matter how the case played out, it wouldn't—and couldn't—affect their cooperation.
Since Viacom's relationship with Isabella was relatively shallow, under Rupert Murdoch's pressure, they became the second to "kneel." And just as they made their decision—
Time Warner, Disney, and DreamWorks, these companies that had much closer ties with Isabella, were left scratching their heads in frustration.
Time Warner: "Barry, my personal suggestion is that we should file a lawsuit against YouTube immediately."
The future king of Time Warner, its current CEO Jeffrey Bewkes, spoke earnestly to Barry Meyer: "I know you don't want to do this. Honestly, I don't either. Isabella just made us over 200 million a few months ago!"
"But we have to sue YouTube now."
"Otherwise, we can't explain ourselves to the other shareholders."
"Explain why we turned a blind eye to the infringement committed by a company Isabella invested in?"
"And I want to say, YouTube's fate actually won't have much impact on Isabella."
"How much has she even invested in YouTube so far?"
"Not even 50 million!"
"And a lot of that investment has already been recouped through American Broadband!"
"After we sold her 1 billion worth of American Broadband for 900 million—"
"She's basically holding YouTube equity at zero cost now!"
"So worst case, after the storm passes, we can just find another company to acquire American Broadband."
"At a price of 1 billion!"
"Barry, what do you think of my suggestion?"
Barry Meyer looked hesitant.
He didn't respond immediately.
And on Disney's side—
"Bob, I think our company should file a lawsuit against YouTube immediately!"
"Because intellectual property is the foundation of Disney's growth!"
"The moment we detect infringement in the market, we must strike hard!"
"I know Isabella is our ally, but—"
"An ally is a partner in progress, not a thief who infringes on our interests, right?"
After learning that Fox, MGM, and NBC Universal had jointly filed a lawsuit against YouTube, Roy E. Disney Jr. rushed to the company, exercising his authority as an advisor and directing Robert Iger's work.
Although every word he said made sense, his arrogant demeanor disgusted Robert Iger.
But even so, despite his discomfort, Robert Iger still nodded.
"Yes, Roy, you're right. So I've already instructed the legal department to prepare the lawsuit."
"Good. When are you planning to file?" Roy Disney Jr. smiled.
"Next Monday," Robert Iger replied simply.
"Okay. Then I'll be waiting for the good news that YouTube gets shut down."
Roy Disney Jr. raised his brows and nodded, effectively issuing a direct order to Robert Iger.
"Bob, personally, I think we can crush YouTube, right?"
"Because now, all the copyright holders will be suing them, won't they?"
His face was full of smug satisfaction—as if he believed Robert Iger's ally was about to fall, and that Iger would soon no longer pose a threat to him.
And as for that—
"Personally, I think Rupert Murdoch will definitely destroy YouTube."
Robert Iger played it safe when it came to confronting YouTube.
But Roy Disney Jr. didn't care.
He burst into loud laughter.
Meanwhile, over at DreamWorks, Steven Spielberg was on the phone with Chris Columbus.
The old man's message was very clear—
"Chris, tell Isa that I have no choice but to sue YouTube as well."
"But tell her not to worry. Our lawsuit is more symbolic than substantive."
"And right now, she definitely can't rely on Disney or Time Warner's legal teams."
"As for J.K. Rowling's legal team—"
"It's not easy for UK lawyers to win cases in the US."
"Of course, personally, I think the best outcome for YouTube is to settle with us and remove the infringing content."
"And even that is quite difficult."
"Because right now, Rupert Murdoch just wants Isa to jump off the Warner building, and we can't really help her."
"So if she still wants to fight, my personal suggestion is for the YouTube team to go to Peter Thiel and use his lawyers, since they handled the Napster case before."
"With Peter Thiel stepping in—maybe there's still a chance to struggle a bit—"
Although Barry Meyer, Robert Iger, and Steven Spielberg all wanted to personally deal with Rupert Murdoch—because in their eyes, his move of forcing everyone into a corner was downright disgusting—that kind of direct solution wasn't an option right now.
So all they could do was think hard about countermeasures and try to minimize their losses.
And just as they were weighed down with worry—the next day.
Isabella appeared in Silicon Valley.
For the first time, she met YouTube's founding team.
There was no choice.
The situation had become too tricky.
So tricky that she had to meet them in person.
But after talking with the founders for a while, Isabella suddenly felt that things were even more troublesome than she had imagined.
Because—"Chad, are you saying Mr. Jim Clark is unwilling to help us?"
Isabella looked seriously at Chad Hurley.
Chad Hurley nodded helplessly. "Yes."
Sighing, he spread his hands. "If it were only Fox suing us, he would help."
"But—"
"After Fox, MGM, and NBC Universal filed a joint lawsuit, and with Disney, Time Warner, Sony, Viacom, DreamWorks, and Lionsgate all potentially following…"
"He told me one thing."
"He said—"
"We can break the law, but we can't break the rules."
The meaning behind Jim Clark—Chad Hurley's father-in-law—was simple:
Whether YouTube's actions were illegal or not, no one knew until the court made a ruling.
But the rights protection claims from Fox, MGM, and NBC Universal were legitimate.
So once these parties began legal proceedings and sought justice through the law, he could no longer step in as a mediator.
Because the law is the underlying logic of how society operates—at least on the surface.
Those in power can use their authority to make someone break the law, but they cannot tear apart the legal framework itself. If everyone stopped following legal procedures, the entire system would collapse.
Right?
At that point, others could use the same methods against him.
Right?
Therefore, once all major players began respecting the process, Jim Clark could no longer intervene.
Not to mention, he never really liked his son-in-law or the mess he was involved in.
So—
"Alright."
Isabella smiled and nodded. "Looks like we're completely on our own now."
With Jim Clark stepping back, Isabella couldn't help but reflect on capital—
it really isn't easy to deal with.
After losing twice in a row, Rupert Murdoch's move this time completely silenced her—he basically banned all her cards.
This kind of playstyle—was honestly pretty impressive.