San Francisco — In a sensational move aimed at boosting revenues, rather than pulling down all copyright-protected videos that its members post, MySpace said it is teaming with Viacom’s MTV Networks and content “fingerprinting” company Auditude on an innovative deal to deliver ads to copyrighted MTV Networks’ videos that users upload to its site — and honor the creators of the original content a cut of the revenue from advertising that will be attached to the snippets.
The clips will include Comedy Central’s “The Colbert Report” and MTV’s reality show “The Hills.”
MySpace generally attempts to keep such clips off its social network along with other copyright-protected content that users post. The News Corp.-owned site removes clips at the request of the videos’ copyright owners. Google Inc.’s YouTube has a similar policy, although Viacom is suing YouTube for allegedly profiting from clips of Viacom shows posted online.
Now MySpace is taking a different approach with videos produced by partners it makes in its new ad deal.
Jeff Berman, president of marketing and sales at MySpace, said the deal is a win-win-win for MySpace, MTV Networks — which owns 150 TV channels, including Comedy Central and Nickelodeon — and Auditude because all three companies will share the ad revenues. “This allows us to monetize the content,” he said.
Auditude technology automatically identifies user-posted segments of shows, then weaves in advertising for copyright owners and tells viewers whose program they are watching.
Rather than copyright holders chasing down television shows video posted on MySpace pages and then demanding clips be removed in accordance with US law, they can let Internet users be delivery channels complete with advertising.
“This is a no-brainer,” Berman said in a statement. “Everyone wins. Auditude lets the user do whatever he or she wants to do with copyrighted video and sticks an ad on it.”
Here is how Auditude functions: It can detect MTV Networks content if either MTVN itself or a MySpace user uploads it, and then it implements both targeted ads and “attribution ads,” which provide data about the source of the programming. (For example: an “attribution ad” for Comedy Central talk show The Colbert Report could include information about when the program is broadcast on-air.)
At present, according to a joint release, Auditude already has four years’ worth of 100 television channels indexed in its database, plus 250 million standalone videos.
“As one of the leading providers of online video in the world, we give our fans the power not only to consume our content, but also to share and interact with it across the Web,” Mika Salmi, president of global digital media at MTV Networks, said in a release. “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.”
Auditude’s chief executive, Adam Cahan, said the system will tag videos with a so-called “attribution overlay” — a semitransparent bar across the bottom of a video that give viewers information like the episode’s original air date and a link to buy the episode.
One of these will appear for about 10 to 15 seconds near the start of a video, and be followed by an ad.
The overlays and ads are expected to start showing up on MySpace in the coming weeks, and MySpace and Auditude predicted that new ad formats and ad partners will soon follow.
Auditude is “sitting on an index” of more than a billion minutes of films and shows from television and adds millions of minutes of new material daily to its fingerprinting data base, according to Cahan.
Auditude discovered that, on average, catchy clips shown once on television are reincarnated 20 times on the Internet.
“Folks want to be able to share the video they really like,” Cahan said. “We are embracing what users do today; bringing them back in and using them as a distribution channel, if you may.”
Hollywood studio Warner Brothers has already signed on with Auditude.
Although the companies were withdrawn about sharing specifics, such as how they plan to share the revenue and how much they hope to generate from the new ad-matching system. In 2007, MySpace generated an estimated $800 million to $900 million from ads placed on other parts of its site, according to analysts. In October, MySpace launched two new ad initiatives: MySpace MyAdds, a platform that allows individuals and small businesses to create display ads on the site, and MySpace Music, which sells advertising against music streams on the site.
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’s 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 is the first of many partnerships we are hoping to announce,” said Cahan.
MySpace, which is owned by News Corp. and had 75 million visitors in August, said 80,000 videos are uploaded to its site daily, but it declined to say how many videos are created by users and how many are copyrighted.
The new ad-matching platform will allow advertisers to select the Auditude-cataloged videos on which they overlay their ads. MySpace, however, declined to name the advertisers that have signed up for the program so far.
“Auditude is taking us from a world of “No” to a world of “Yes” that was previously impossible and that is a beautiful thing,” Berman said. “If it does not solve the take-down problem it comes pretty darn close.”
In addition to Comedy Central, MTV Networks includes cable properties such as Nickelodeon, VH1, Spike and Country Music Television.