This noise is just posturing by Murdock who wants to appease the MySpace boys who feel screwed that Murdock should have paid for MySpace what G paid for YouTube.
Napster was a desktop service intended for the single purpose of exchanging copyrighted songs. A staggering 99% of all songs traded and listed via Napster search network were copyrighted. Napster was pre DMCA.
YouTube and Google are ISP's and deserve full usage of the DMCA safe harbor provision. YouTube will take down any copyrighted item within a short amount of time after a dmca notice is posted to them. YouTubes prime purpose is to help private individuals share and publish videos. I have read an estimate that less than 9% of the video content on YouTube is unlicensed and copyrighted content.
Google will strike revenue sharing deals with all the major copyright holders like: network tv, movie studios, and other major producers of content - eg: people with big bank in the game. After that, Google will treat each one in a oneoff situation under the DMCA. They will piecemeal the thing and come out smelling like a rose. YouTube is to video what the ITunes is to music.
The part that ruffles my feathers, is all the people that are whining about copyright. These are the same people (and webmasters), who think nothing of allowing Google to use their content in Googles search service. I sure don't see Rupert and NBC kicking Google out for copyrighted content on the text side. You can't have it both ways.
We need an RIAA for textual content.