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Unclear legal position vis a vis copyright to become more of a barrier for exit?

By January 2, 2007 No Comments

An FT article today about the upcoming CES (Consumer Electronics Show) in Las Vegas “Old media comes out fighting against the titans of tech” (no link due to DRM) contained the following passage:

[Last year] Google announced a content distribution agreement with CBS at CES and went on to acquire YouTube.

But it still faces lengthy negotiations to strike agreements with all the leading content providers.

The message of the article is that this year’s CES will be dominated by old media, telco and cable.  Last year it was dominated by new media.  Yahoo! and Google featured prominently.

In 2006 the right strategy for many start-ups in this space was to focus on growing traffic and worry about the copyright issues later.  Value creation happened so fast that if you waited to sort out the legal issues you missed the party.  YouTube proved that.  Let’s call this ‘the 2006 strategy’.

I wonder if we are seeing the first signs that things might be about to change.

The big bet with the 2006 strategy was that someone would acquire your company before you had to begin the potentially terminal process of making sure you were clean from a copyright perspective.  If old media is resurgent the odds on that bet coming off are lengthening.  It is also worth remembering that for most of history old media has succeeded in enforcing copyright law.  Look at Napster.

That doesn’t mean the 2006 strategy isn’t still a good bet though.  2006 wasn’t long ago, after all.  Events over the next couple of months will determine whether 2007 will be different.