First off, as mentioned before, Google knew all too well that they would get into lawsuits, but they definitely have the money to burn to pay for copyright infringement violations. Google bought Youtube with the main purpose to sell ads against millions and millions of video pages. There comes a point where ad inventory through traditional search marketing narrows down. Youtube was brand new territory to conquer in Google's eyes. I remember a meeting a few months ago here on the Revver camp where Steven was saying that we would be in a quagmire if Google finally masters the art of selling ads with certain legitimate content creators and they'll make tons more money than what we can deliver to them on Revver based solely off click-throughs. It's also no surprise that Google is pushing to pay creators, but only a select few given the legal ramifications of a third party profiting off another's work.
Second, I'll always say this and that is, that Youtube was smart for the kind of strategy they put in place. They took that Napster ideology and had focused on building a community that watches videos, rather than focusing on being creator-centric. Revver had gone the other way and protected creators' rights first and monetize videos. It's a good idea, but it definitely overlooked the most ideal part to the business and that's traffic. Revver doesn't even have 1% market share while Youtube has something like 55-60%. It's not that Revver was too idealistic for what they're doing, as there is definitely a demand for advertisers to want to be attached to good, fairly safe content and there are creators that want copyright protection and want to make money for what they love to do. But if there's barely a trickle of traffic, well, whatever you make on CTR doesn't matter. You're better off on Youtube and getting your name out there. It's definitely worked for comedy troupes like Nobody's Watching and Derrick Comedy as they've signed deals with Hollywood talent agencies.
Third, I don't think Viacom suing Youtube is going to hurt YT's business dramatically. The reason is again, the community. Big media companies look at Youtube with the first instinct to sue them for every penny for copyright infringement. But what's different is that Youtube has built a place where they've built fan communities, sizeable communities that are readily accessible to advertisers. A big media network like NBC and Fox saves ad dollars on promoting their shows and gains a great ROI, because they'll get plenty of exposure (and comments) from a substantial audience. The middle ground like TNA Wrestling and Ripe TV are the heart and soul of Youtube in the end, as they're looked upon as fresh content and gain headways in views and in fans. Even one of the world's most popular soccer clubs, Chelsea FC, had recently posted its own Youtube channel. When you look at how Youtube is moving towards a social networking community revolving around videos (with Google ads abound and monetization behind the scenes), given the kind of technology they're testing, their site is still going to run like a machine.
But in the end, time will tell if Youtube, Metacafe, and Revver will be nothing more than a fad because if some guy with a great idea and greater technology to boot comes along, Youtube and company are sunk. In fact, the guys who started Skype and Kazaa, haven't gotten Joost, an IPTV platform off the ground yet in the mainstream, and yet they have a deal with Viacom to broadcast content. No surprises as Viacom had been trying to start up its own Youtube killer app or align itself with one.