MTV, MySpace Figure Out How to Make Ads Follow Video

Deal Lets Social-Network Users Upload Clips With Ads Sold By Either Partner

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NEW YORK ( -- Viacom's MTV Networks is giving MySpace what it won't give YouTube. That is, they've licensed the social network to allow users to upload clips or entire episodes of "The Daily Show," "The Colbert Report," "Reno 911" and other shows under a new system that automatically identifies copyrighted video and attaches advertising.
MTV's deal with MySpace employs a system that identifies MTV content when it is uploaded and attaches overlay advertising.
MTV's deal with MySpace employs a system that identifies MTV content when it is uploaded and attaches overlay advertising.

The deal will allow MySpace users free reign to upload MTV content to their MySpace pages, a significant loosening of the strictures that are at the core of dispute between content owners and web companies. MTV parent Viacom is in the midst of a $1 billion copyright infringement suit against Google that alleges that YouTube executives turned a blind eye to copyright infringement on the video site.

Start-up Autitude provides system
MTV's deal with MySpace employs a system from a tech start-up Auditude that automatically identifies MTV content when it is uploaded and attaches overlay advertising. YouTube is attempting a similar program with its Content ID service, which can identify and attach advertising to video from producers who agree to participate.

Auditude, headed by former MTV exec Adam Cahan, has content deals with both MySpace and MTV Networks, as well as Warner Bros., which isn't part of this deal.

Jeff Berman, MySpace president-sales, said he expects the MTV deal to be the first of many using Auditude's system. "Auditude is opening the floodgates for users to program video on MySpace and ensure copyright holders get paid," Mr. Berman said.

Initially, the overlays will serve as a promo for the show, and provide a buy button for the DVD. But the ads could take many forms, and can be sold either by MTV or MySpace. MySpace, MTV and Auditude will share revenue.

'We don't want to be restrictive'
MTV Networks' president of global media, Mika Salmi, said that despite the YouTube suit, MTV's intent is to make its content free and available wherever their viewers are. "We don't want to be restrictive with consumers," he said. "The hard part is how to make that work?"

MTV doesn't have the rights to offer all its shows to MySpace, and its online distribution is subject to negotiations with the cable and satellite operators that pay MTV and Viacom millions in affiliate fees each year for the right carry MTV, VH1 and other channels. It's also not the only place MTV is distributing shows. It has an agreement with the NBC Universal-News Corp. joint venture Hulu for "The Daily Show" and "Colbert Report," and offers clips of shows on Joost, as well as its own sites.

Palo Alto, Calf.-based Auditude has indexed and fingerprinted four years of 100 channels of TV, and 250 million web videos, which it can then identify and attach to overlay advertising. The MTV-MySpace deal is the first commercial implementation of the technology. Mr. Berman said MySpace will use Auditude for future content deals.

Other deals expected
"We are expecting to announcing other deals soon," Mr. Berman said. "This is a no-brainer for MySpace and for media companies. No one else in the space has anything like this. We expect as we create a better user experience we will all make more money."

MySpace was No. 3 in terms of video audience in September, with 242 million streams, according to Nielsen Video Census. Yahoo was second with 264 million, while YouTube dwarfed the both, streaming 5.3 billion videos during the month.
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