• by Shankar Gupta , December 5, 2006

Advertisers--especially smaller firms--are avoiding video-sharing sites like YouTube, Bolt and MySpace because they're afraid of being associated with the copyrighted clips found on such sites, media executives said Monday at the UBS Global Media & Communications Conference in New York.

Mark Karlan, senior media planner for Tangible Media, Inc., said his clients generally seek to focus on "safe locations"--sites with tightly controlled editorial screening like AtomFilms, RealNetworks and IFilm--to avoid advertising next to pirated content. "In the short term, that space is fairly limited," he said. "Smaller advertisers are very wary of getting dragged into anything illegal."

Despite advertisers' reluctance, it's questionable whether sites like Bolt and YouTube are legally liable for pirated clips. Many legal experts hold that the "safe harbor" provisions of the Digital Millennium Copyright Act allow sites to avoid liability for infringement if they immediately take down copyrighted material when they are notified by the rights holder.

Jonathan Cody, vice president at Fox Digital Media, said that the legal process of serving sites with takedown notices to protect their copyrights leaves something to be desired. "It's laborious to have 10 to 15 people combing sites and putting the requests up," he said.

Likewise, there's no effective system for site owners to search their own content for pirated copyrighted material. "We've got thousands of videos uploaded every day," said Panelist Aaron Cohen, CEO of Bolt Media, which was recently sued for copyright infringement by Universal Music Group. He said that reviewing that content by hand is extremely inefficient.

The eventual solution to both advertisers' and content-producers' worries will include technological advances, like digital fingerprinting to quickly identify pirated material, Cody said.