Viacom is going to lose their case against YouTube. Veoh already beat Titan on the grounds that Veoh followed the DMCA. This is essentially the same case. Viacom is in major financial trouble and using this case as a last grasp for cash.
As for suing surfers, the RIAA has won just one of these cases (the controversial $200,000 judgment) and it went on to be entirely overturned on appeal. I believe that is the only one that has actually gone to trial. There have also been other cases thrown out before getting to trial. In other words, the RIAA hasn't won a single case.
Sure, you have the public embarrassment factor if the media picks up the stories, but I don't see them doing that. Not with porn. One of the few exceptions being if a tube sues a parent and it turns out that a minor in the house was doing the uploading. That would get sticky for the porn site owners.
Tubes are here. They aren't going anywhere. Ever. At the very least they will radically change how porn is bought, sold and viewed online.
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