Google (GOOG ) and YouTube are dangling nine-figure sums in front of major programming and network players—that is, the Time Warners, News Corp (NWS )s, and NBC Universals of the world. Google calls these monies licensing fees, according to executives who've been involved in the discussions. But some of them characterize the subtext like this: Don't sue us over copyrights. Take this (substantial) payment, and trust us to figure out how we'll all make serious money once we get advertising and revenue sharing worked out.

The offer, and YouTube's rapid rise, force the titans of a time past to make a very big decision quickly. If you're a network, you can't ignore YouTube's reach. (Some 23.5 million unique visitors went there in October.) But if you're a network, you also believe you can't give up your stuff lightly. Your copyrights, and insisting on your programming's premium value, underpin the entire business model.

TO COMPLICATE MATTERS, no publicly traded media company today is in a position simply to dismiss, say, $100 million. Such a sum far exceeds what any single broadcast network can extract from the online world--and drops straight to the bottom line. But taking the dough fortifies an already threatening rival. One executive privy to the discussions says: "The reality is, if they are able to lock in major media [companies] for three years, then by default YouTube is the place to go" for Web video. Such fears may be what's spurred several major media players to mull assembling a cross-company Web video destination--a YouTube killer of their very own.

"The theory is that if you were to aggregate enough exclusive content in one place, you could actually change viewing patterns," says an executive familiar with the cross-company talks. Perhaps anticipating my jumping all over the fallacy of "exclusive" in an open online ecosystem, he concedes "it's really tough," though not impossible.

I will not try to convince anyone that the choices media companies face are easy, but believing that 5 or 10 of them can grind through nightmarish cross-corporate decision-making and emerge with something as simple and compelling as YouTube is nuts. I don't necessarily buy the notion that only outsiders concoct interesting next-generation plays like Google, YouTube, Friendster, and iTunes. But I do know that if I can't spend a half-hour watching live Sex Pistols clips from 1977 on a NewTube--as I just did on YouTube--my interest in it falls off a cliff. (While many existing Web video outfits, from to Microsoft (MSFT ) and Yahoo! (YHOO ), would likely delight in hosting a YouTube rival, bringing them on means another party at the table.)

Still, take a moment to appreciate the multiple ironies. You could argue that Saturday Night Live's goofy, pretty much perfect mock rap video Lazy Sunday made YouTube ultrahot last December. You also could argue that the kindling was in place, and only timing meant Lazy Sunday struck the spark and not, say, Lonelygirl15. Or, for that matter, that NBC got promotional bang out of Lazy Sunday's multimillion views far outweighing old-school copyright concerns. (It was the first time I'd seen SNL in years, and the first time I laughed at it in about 20.) Thus, the YouTube version of the chicken-egg conundrum: Which party needs the other more? One executive's prediction that some licensing deals will get done indicates where the power now lies.

Media execs familiar with the YouTube offer won't discuss it publicly. Neither will Google. But it's interesting that no programming giant has sued YouTube yet. Presumably those guys won't unleash the lawyers until certain talks are played out. Or maybe—indulge me in some crazy dreaming—they know that they can't sue their way out of this.

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By Jon Fine

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