veoh a video sharing site (ala YouTube) was sued by Io Group a company that produces adult video. 

the lawsuit claims that veoh has allowed users to upload Io produced videos to its site, generating significant traffic and revenues out of content that was illegally uploaded to the site.

this could end up being a very important case for the video sharing industry, as it may set a precedent to the liability these sites have for the content that is being uploaded by the users. today most of the copyrighted content that is being uploaded are short clips from TV shows, movie trailers, sport highlights, etc. in these cases i believe the uploads while violate the copyright are actually serving as a great promotional tool.

in case of adult content the story is quite different. these companies have been hit hard by the file sharing phenomenon (much harder than the big movie studios), and are now losing audience to these video sharing sites. the average porn user does not need a full 1hr film to get-off, but can use a much shorter film easily uploaded to the likes of veoh or youtube.

so i guess the lawsuit has merit. the movie/tv studios are likely to follow very closely as this has implications on them too, sooner rather than later it will be easy to upload and consume full length tv shows and movies in this way, and this is a serious threat to the studios.

the major studios are likely to end up coming with deals with the leading video sharing sites, splitting ad revenues. the porn industry will have a harder time, since they work in a different model.

will be interesting to follow this lawsuit and see where it ends.