MySpace, MTV Partner On Monetizing Uploaded Video

myspaceMySpace is teaming with MTV Networks on an innovative deal that will insert ads on MTV-owned videos uploaded to the social networking site by consumers.

Enabling the partnership is technology supplied by startup Auditude that automatically identifies professional video uploaded to the Web via digital fingerprinting and then serves targeted ads within that content.

That gives MTV the ability to now run ads on everything from a Beyonce music video to viral clips from "The Colbert Report" or "The Daily Show" with Jon Stewart being shared among MySpace's 73 million U.S. users.

More broadly, the technology that allows Web sites and media companies to monetize unauthorized clips promises an alternative to copyright takedown notices and other legal means of blocking the spread of pirated clips online.

Andrew Frank, a research vice president at Gartner Group, called the deal "a significant milestone" for the digital content business. "The need for media companies to solve the problem of monetizing consumer-distributed content and the need for portals to find better ways of dealing with copyright issues has never been greater," he said.

Auditude CEO Adam Cahan said the deal with MySpace and MTV was the first of its kind for the Palo Alto, Calif. company started in 2005 and backed by investors including Greylock Partners. "It's the first of many partnerships we're hoping to announce," said Cahan, who cited Warner Bros. as another content owner that had signed up to use its ad platform.

The company's technology centers on a database indexing four years' worth of television programming, 250 million user videos and thousands of films for a total of more than 1 billion minutes. When a user uploads at least five seconds of a TV show, for instance, Auditude knows what it is, when it aired and which episode it was.

It then sends an "Attribution" overlay ad telling viewers what they are watching and providing links to the original content source and any related e-commerce opportunities such as merchandise or DVDs. After a set amount of time, based on the length of the clip, a second overlay will appear with an in-stream video ad and companion banner from a third-party marketer.

Cahan said the Auditude ad platform can run ads of any format including pre- and post-rolls and on long-form video as well as clips. "It's just a question of finding the right balance between the user and the monetization opportunity," he said.

Under their agreement, MySpace, MTV and Auditude will share ad revenues from the deal. MySpace says it is currently in active negotiations with other companies about extending the Audible technology to content uploaded to the social network.

"Auditude is opening the floodgates for users to program video on MySpace and ensure copyright holders get paid," said Jeff Berman, MySpace president of marketing and sales, in a statement. "In one fell swoop, Auditude and its partners are empowering consumers and building a better business model."

With its platform for monetizing user-submitted clips, Auditude seems like a natural fit for video-sharing hub YouTube.

Its parent company, Google, was sued by MTV-parent Viacom last year for $1 billion in a complaint alleging massive copyright infringement. Cahan said Auditude has no deal yet with YouTube, but agreed "they would be a terrific partner for us."

Google in August said that media companies, in the vast majority of cases, are using YouTube's copyright tool to monetize potentially infringing clips.

Its Video ID tool flags potentially infringing videos for copyright owners. They can then decide whether to license and monetize the clips or have them pulled from the site. Google said that its partners are deciding to license and monetize the clips more than 90% of the time.

Viacom in June struck a deal with video site Hulu, the joint venture of NBC Universal and News Corp., to syndicate full-length episodes of Comedy Central's "The Colbert Report" and "The Daily Show."

In addition to Comedy Central, MTV Networks includes cable properties such as Nickelodeon, VH1, Spike and Country Music Television.

In connection with the MySpace/Auditude agreement, Mika Salmi, president of global digital media for MTV Networks, said in a statement: "With Auditude's solution, we can continue to give users the freedom to take our content wherever they go online, while ensuring that we can monetize it as well."

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