MTV, MySpace Seek to Profit Off Pirates

Sam Gustin writes: If you can't beat 'em, join 'em.

Viacom's MTV Networks is set to announce a digital-fingerpringing initiative with News Corp.'s MySpace in hopes of turning rogue content uploads into cash.

The two companies will use technology developed by a Silicon Valley-based start-up called Autitude, which offers content-matching technology similar to a rival effort by Google's YouTube to identify MTV and other Viacom material, in order to place sell online advertising on top of it.

The deal's advocates say the pact signals a shift in strategy by so-called "Big Content" -- the major media companies, record labels and studios -- from trying to punish illicit online traffic in their material, to trying to make money off it.

"Now the shackles are off our users. They are fully empowered, and the media companies get to monetize and get all the data from this," Jeff Berman, president of marketing and sales at MySpace, told the New York Times. "They know what is actually being consumed out there and get the benefit of the viral promotion."

MTV, which last week put a tiny universe of video content online, and MySpace, which has invested heavily in music and video, both hope to make money on the effort by selling ads against the uploaded content.

The deal amounts to a flanking move by MTV's parent, Viacom, which has sued Google's YouTube for $1 billion for serving copyrgihted material that users have uploaded. The new partnership indicates that Viacom wants to move beyond its punitive image toward a less combative model.

From the LA Times:

If the strategy works on MySpace, where millions of videos are streamed every month and where watching premium content is one of the most popular activities, other networks will follow suit, predicts Forrester Research analyst James McQuivey.

"This is a sign that we are finally ready to do this," McQuivey said. "Two years ago the solution was 'Let's sue YouTube and block this.' It really hasn't worked. Now the solution is 'Let's create a system where content can derive some benefit.' "

MySpace is enthusiastic about the concept rolled out by Palo Alto-based Auditude. MySpace doesn't have to play copyright cop, controlling what consumers can and can't watch on its site. Instead, it gets a split of the advertising revenue. MTV Networks gets to target ads to fans of its shows and direct them to its shows and merchandise.

And consumers get to share some of the content they want without having it blocked or removed, said Jeff Berman, MySpace's president of sales and marketing.

"This is a game changer," Berman said. "This takes us from a world of 'no' to a world of 'yes,' where the audience gets to curate content, express and share it as they choose, while copyright holders are not only respected, they get to make money."

Auditude Chief Executive Adam Cahan, a former executive of Google and MTV Networks, said he joined the company a year ago when it was still based in Los Angeles because he was intrigued by the prospect of helping media companies reach their fans across the Web. He has already signed up Warner Bros.

He says Auditude can identify virtually any professional video uploaded across the Internet because it has indexed more than 1 billion minutes of professional content, including 250 million videos and four years' worth of television from 100 channels. Then content owners can decide whether they want to run ads with the content.

"What we saw was a problem, and we tried to bring a solution to it and make it into an opportunity," Cahan said.

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