"Oh—uncle—our server crashed again"
A pained wail echoed out from Perrysburg, Ohio.
The cry, full of despair, left a white middle-aged man in his fifties looking rather helpless.
He had the classic redneck look: big head, thick neck.
Rubbing his bulbous, alcohol-reddened nose, he rushed out of his office, leaning against the doorfra to look outside—
"Is it YouTube again?"
"Yeah."
The wail turned into a firm, resigned confirmation.
A young man in his twenties, frantically hamring away at his keyboard in a suite-like office, shouted, "That's the eighth ti!"
"Our site has gone down eight tis this month!!"
"Our official website has crashed eight tis this month because of YouTube!!!"
"Oh my God"
"Will this ever end?"
The miserable scream shot straight into the sky.
The young man wished he could broadcast his frustration across the entire United States.
Because only then could more people know the massive damage YouTube had caused to their company, Universal Tube and Rollform Equipnt.
This company was founded in 1985.
Over the past 20 years, it had been steadily working in its niche—the industrial tal processing machinery industry.
Thanks to decent profits, they embraced the internet in 1996 and set up an official website to sell products online.
Since the company's full na was quite long, using it as a domain would practically drive custors away. So when applying for a domain, they deliberately chose an abbreviation: utube.
The "u" in "utube" stands for "universal";
The "tube" in "utube" is simply "tube."
This simple and clear combination earned them custor approval and brought in a steady stream of business.
After all, they sold things like tube mills, pipe mills, and roll-forming machines.
Web traffic for such industrial equipnt companies is usually very low.
But because their domain na was simple and easy to understand, their website still received nearly 10,000 visits per month.
Their business didn't just cover the United States—companies from Canada and xico also placed orders with them.
Just when they thought this comfortable, low-promotion, profitable life would continue indefinitely, no one expected that soone in this world would create a website called YouTube.
After YouTube officially launched, starting in May 2005, they noticed their website traffic seed to increase a bit.
At first, they didn't pay much attention.
They assud it was just the rapid growth of the internet bringing them more visibility.
But after Isabella shouted out a promotion for YouTube on January 1, 2006—
They exploded instantly!
Because many people, when trying to access YouTube, would mistype "youtube" as "utube."
On January 1 alone, their website received over 500,000 visits.
It crashed imdiately!
If that were all, it would have been manageable.
A one-ti accidental crash was acceptable.
But what they couldn't tolerate was that after fixing the site, daily traffic consistently exceeded 100,000 .
In the past two months, their site had already crashed seven tis!
And now, they were experiencing the eighth!
Now—
Those unfamiliar with the telecom industry might not understand how troubleso a website crash is.
Simply put:
In telecommunications, companies charge both ways.
Users pay ISPs to access the internet—that's the internet fee. Businesses also pay ISPs to host their websites—that's communication fees.
Moreover, ISP pricing is tiered.
A port supporting 1,000 simultaneous connections and one supporting 10,000 connections are priced differently.
Of course, ISPs won't shut your site down just because you hit 1,001 users at once.
There's always so buffer.
So when a website gets overwheld by massive traffic, it not only ans staff have to work overti to fix it, but also that the traffic has exceeded the ISP's buffer limits.
If you paid for 1,000 connections but used 10,000, the ISP will charge you extra.
They're not running a charity.
So—
Over the past two months, Universal Tube had already paid $20,000 in excess communication fees.
If those costs could be converted into real revenue, fine, they wouldn't complain.
But the problem was that the surge in traffic was all junk traffic!
It couldn't be monetized!
So—
"Uncle, I think we really need to talk to YouTube."
"This can't go on."
"At this rate, our annual internet costs could hit $200,000."
After calling the ISP and asking them to completely cut the connection for now, the young man looked up helplessly at his uncle.
"Or rather, if this continues, I might not be able to keep doing this."
"Because no one knows when the site will crash again."
"I don't want to keep fixing the website every day."
"Especially in the middle of the night."
His words made the boss take a deep breath.
Since his company wasn't an internet business and didn't rely heavily on the web, the website's creation, maintenance, and operation had all been handled by his nephew, who ran a computer shop in town—essentially a favor, unpaid labor.
For simple tasks, helping out family was fine.
Before, his nephew only needed to co by once a month.
But now—
With a heavy sigh forming in his heart, just as the boss was about to comfort his nephew—
"Tap tap tap—"
A rapid series of footsteps suddenly sounded.
Looking toward the noise—
The company's only receptionist, his sister-in-law, ca rushing toward them in a hurry.
As soon as she caught his gaze, she shouted, "Brother-in-law, you're famous!"
"A reporter wants to interview you!"
The sudden words left the lifelong small-town redneck stunned.
At that mont, he truly didn't understand—how had he beco famous? Why would a reporter want to interview him?
When he followed his sister-in-law to et the unexpected visitor—
The New York Post press badge and a concise explanation made everything clear.
"Oh—you an you found us because of YouTube?"
The boss picked his nose.
"Yes. When I was using YouTube, I noticed your site is also called utube, so I thought—if I can land on your site by mistyping the URL, wouldn't you be getting a lot of traffic?"
"So I checked your traffic, and then—my God—over 100,000 daily visits?"
The reporter was also white.
But very thin.
When ntioning "100,000 daily visits," his face was full of envy as he said loudly, "That's sothing many internet companies can't achieve. So—are you excited? Happy?"
"Happy my ass! Our site has already crashed several tis!"
Before the boss could speak, the young man, who no longer wanted to fix the site and had co along just to watch, shouted, "YouTube has brought us huge trouble! To us, it's a nightmare!"
"Hm?"
The complaint surprised the New York Post reporter, who quickly picked up his recorder.
After gesturing to everyone present, he pressed the record button.
"Can you tell what you've been through?"
"I ca today to interview you. If your story is interesting, I think you could make the front page of the New York Post. At that point—many problems might solve themselves."
His words lit up everyone's eyes.
Perhaps because YouTube had already driven them to the brink—
They imdiately started talking over each other.
About an hour later, the chatter finally subsided.
The young man even asked proactively, "Mr. Reporter, do you think our situation can make the front page?"
"Of course," the reporter said with a smile.
"Then is there—" the young man rubbed his fingers together.
"Yes," the reporter understood and continued, "Once the article is approved, I'll email you. Each of you will receive $1,000 as compensation."
"And you don't have to worry about defaulting. If I don't pay, you can sue directly."
"Paid interviews are standard in our field."
"Oh—okay, okay—" the young man bead, practically rubbing his hands like a fly.
The boss pursed his lips and said, "Mr. Reporter, compared to the $1,000, I'd rather know if there's a solution to our problem. The unexpected traffic has increased our operating costs significantly."
"It's been very painful for us."
The boss admitted he was just asking casually.
A bit of a "nothing to lose" mindset.
After all, the person in front of him was just a reporter.
Reporting news was one thing—
Anything else? Probably not.
But—
"A solution? Of course there is! You can just sue YouTube."
As the reporter put away his recorder, he said, "Your domain was registered in 1996, while YouTube's domain was created in 2005. So with your prior claim, you can sue YouTube for infringent."
"You can claim that their unregulated operations have caused you significant losses."
"This kind of lawsuit is very common in the business world, and most of the ti, the other party will settle."
"Because they're famous—YouTube is famous. A lawsuit like this would damage their reputation."
"And settlent amounts are usually 50 to 100 tis the losses."
"You said YouTube's traffic caused you over $20,000 in extra communication fees?"
"Then the settlent from YouTube wouldn't be less than $1 million."
"But there's one thing I need to make clear—if you choose to resolve this legally, YouTube will definitely take your domain, 'utube.'"
"At that point, your company will have to change its website."
"The reason behind this is actually quite simple."
"First, they'll state in the settlent agreent that the money is only for purchasing the domain."
"Big companies never admit they've infringed on anyone's rights."
"Second, by doing this, they prevent similar situations from happening again."
"They've already paid you, so if you sell the domain to soone else and that person sues them again, wouldn't they look like idiots?"
"But personally, I think that doesn't matter, right? A $20,000 communication cost gets you $2 million in compensation."
"That kind of profit—"
"Should be higher than what a manufacturing company like yours makes, right?"
At this point, the New York Post reporter paused.
When he looked at the crowd with a smile—
Everyone present had a glint in their eyes!
"Mr. Reporter! Are you sure we can sell 'utube' for two million?"
The young man asked in shock.
"It's YouTube paying two million for their arrogance."
The reporter from the New York Post repeated the logic clearly.
At the sa ti, he added, "And if you want to win the case, the usual approach in the business world is to exaggerate your losses, conceal your motives, and make the situation as big as possible. For example—"
"When you file the lawsuit, you can't just say that YouTube's domain conflicts with yours, or that your losses are only $20,000. Instead, you should claim that YouTube used aggressive ans to violate your legal rights, causing your company losses exceeding $20 million. You demand $200 million in compensation, or directly ask them to hand over their domain. And then get influential dia outlets to report on it—"
"The more miserable you make your situation sound, the more curious the public will be and the more attention you'll get. The more vague you make things, the more people will itch to find out what evil YouTube has been up to."
"Only when you make the situation as big as possible will YouTube want to settle with you to calm things down."
"If it's just a simple lawsuit—"
"The public won't care."
"And if the public doesn't care, YouTube can settle things with you at a very low cost."
"I think you understand what I an?"
At this point, the New York Post reporter paused again.
He raised his eyebrows at everyone with a smile.
"Hiss—"
The young man sucked in a cold breath and looked at his uncle.
At that mont, he suddenly noticed that his usually honest uncle seed to have a burning look in his eyes?
Almost at the sa ti—California.
Culver City.
MGM headquarters.
Inside a reception room.
MGM chairman Harry Sloan also sucked in a sharp breath.
Although MGM had been acquired by Sony back in 2004, and Sony was currently its largest shareholder—
Sony did not have control over MGM.
At this mont, MGM's operational control was in the hands of other shareholders such as Comcast and Texas Pacific Group.
Well.
Aricans had never really treated the Japanese as equals.
Or rather, whether the Japanese deserved basic respect depended on Arica's convenience.
For a long ti, the relationship had been: what's yours is mine, and what's mine is still mine.
So, at present, MGM's chairman Harry Sloan was actually appointed by Comcast.
His role at MGM had essentially one purpose—to scout the way for Comcast's ambitions to enter Hollywood.
Because of this, Fox's head of investnts had written in a report to Rupert Murdoch that MGM could very likely beco their strategic ally. After Murdoch approved the plan, they directly approached MGM.
And as for this—
Looking at the Fox Group general manager in front of him, Harry Sloan pursed his lips and said, "Let's skip the pleasantries."
"I know what Fox wants."
"You want to destroy YouTube. And this 'destruction' has nothing to do with whether YouTube infringed on our interests. It's purely because your own investnt ran into problems—and you also want revenge."
"As for this matter—"
"I can only say that I will not take the initiative to go after Isabella."
"You know how I built my career."
"I don't betray my own people."
Harry Sloan didn't start in the entertainnt industry.
The beginning of his career was actually as a lawyer.
It was only after he gained Ron Howard as a client that he entered Hollywood.
Yes.
When he first entered Hollywood, he relied on Spielberg's network.
Although after 1987 he rarely interacted with Spielberg and others, because he aligned himself with Reagan and went to Washington—after all, no one dislikes power—and later in the 1990s, he went to Europe and, with several investnt partners, built the second-largest broadcasting company in Europe. Now he had returned to Hollywood as a professional manager.
But distance didn't an he would actively target people connected to Spielberg.
As for the reasons—
If he actively targeted Spielberg's people, it would an he lacked loyalty.
Even in a capitalist society where profit cos first, relationships still matter among the powerful.
He was also Jewish.
His father had even retired from Douglas Aircraft Company.
Yes, the one that later beca McDonnell Douglas, now part of Boeing.
So if he made a move against Spielberg's people—
He figured his father would slap him the mont he found out.
So—
How could Fox not know all this?
Yet they still had enough confidence that they could win Harry Sloan over.
"Harry, we know you have principles, but—what's the point of principles if not to break them?"
"MGM is in a difficult position right now. Because of Kirk Kerkorian, MGM's production and distribution capabilities are almost gone. If you want to change that, you'll have to start from scratch. Otherwise—"
"Bankruptcy is inevitable."
"At a ti like this, Fox is willing to lend a hand and help you rebuild MGM's distribution network."
"But we have one condition."
"We hope that when soone outside files a lawsuit against YouTube for infringent, MGM will step forward and join a class action."
"And I can guarantee that Fox will not be the one leading the lawsuit."
"What do you think?"
Fox's proposal made Harry Sloan narrow his eyes.
After thinking for a mont, he said, "NBCUniversal?"
"I can guarantee they'll be part of the class action."
At this point—
Harry Sloan took a deep breath and said, "This kind of cooperation can't be written into an agreent, so I can only say this: I ca to MGM for one reason—to turn losses into profits."
"As long as MGM becos profitable, I'll receive a $200 million bonus."
"So—"
"Hm?"
Harry Sloan raised his eyebrows, letting out a nasal hum.
The Fox representative smiled and nodded, responding in kind.
"Hm."
As Harry Sloan subtly joined the Fox alliance—
New York.
NBCUniversal headquarters.
The president of NBCUniversal's copyright division was also listening to Fox's plan.
"Targeting YouTube is absolutely necessary—"
"Because YouTube's existence affects our interests—"
"Of course, we won't deny that Fox and Isabella have their own conflicts—"
"And yes, we do want to dismantle Isabella's internet business—"
The frankness made the NBCUniversal executive smile.
"Oh—since you're being so direct, I'll be just as clear. While NBCUniversal doesn't have concrete cooperation with Isabella, our leadership's stance is very clear: unless necessary, we don't go to war."
"And honestly, we wouldn't make much money from suing YouTube anyway."
"You know, Apple, Microsoft, and Amazon have already obtained digital distribution rights for online entertainnt from us."
"And the total licensing fees from those three don't even amount to one-tenth of the total value of U.S. broadband."
"Suing YouTube for that small amount—there's no real point."
That's right.
At this ti, companies obtaining digital film and TV rights from Hollywood's "Big Seven" weren't just Microsoft and Amazon.
Apple had also bought them.
But unlike Microsoft and Amazon, who were preparing to launch online video platforms, Apple had no such plan.
The reasons were simple—
Apple turned videos into products and placed them in the iTunes Store.
Users could only purchase download rights, not stream online.
Apple was working on the iPhone.
Bill Gates believed small-screen entertainnt was the future, but due to immature mobile internet technology, he chose to first develop MP4 devices and video platforms before integrating them.
But—
If technological breakthroughs were inevitable, why shouldn't Apple be the one to achieve them?
Why build separate products first and integrate later?
Why not create a mobile dia terminal directly?
Yes.
Apple stockpiled content rights because Jobs had even bigger ambitions than Gates.
But that's not the point here.
The point is that, due to high transmission costs for online video, even though Apple, Microsoft, and Amazon bought rights, they didn't pay much for them.
So for NBCUniversal, joining Fox to attack YouTube—
Was clearly a high-effort, low-reward move.
They had no interest in spending big money for small gains.
Nor did they want to get entangled in Fox's conflict with Isabella.
And as for that—
"What if—just hypothetically—the one sounding the war horn isn't Fox?"
The Fox executive asked, "What if it's another company?"
"Would NBCUniversal follow?"
The direct question made the NBCUniversal executive frown.
Grinding his teeth, he said, "Who did you find? MGM?"
The Fox CEO neither confird nor denied, rely shrugging. "I can guarantee they'll be part of the class action."
The NBCUniversal executive narrowed his eyes.
After half a minute, he said, "We'll see when the ti cos."
The ambiguous answer didn't bother Fox at all—they simply nodded.
As ti quietly reached March 21, 2006—
The future X, then known as Twitter, was officially founded in San Francisco, California.
At the sa ti, YouTube received a legal notice.
From Universal Tube.
Rupert Murdoch—the head of A.I.M.—
No, wait!
The leader of the Fox Alliance—Murdoch—had stirred up war for the third ti.
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