MySpace and MTV's new revenue model challenges YouTube

In teaming up with MySpace this week, is MTV owner Viacom deviating all that much from YouTube around user uploads of TV show clips? Like YouTube partners CBS, EA, and Universal Music, Viacom now stands to make money from online ads.

After starting a highly controversial lawsuit against YouTube last year, and then getting smacked by a boycott from angry YouTube users last summer, MTV owner Viacom is now adopting a new approach to video content through a deal unveiled with the MySpace social network and tech start-up Auditude.

With Viacom and the Google-owned YouTube duking it out in court, News Corp.'s MySpace had been trying until now to keep copyrighted materials -- including videos -- off of its social network.


But as the new deal with Viacom's MTV and Auditude gets under way, MySpace users will be able to upload segments from MTV shows such as "The Hills" and "The Daily Show with Jon Stewart" for viewing by others online.

Technology from Auditude will be used to detect the content to be aired online, as well as to tag it with an "attribution layer." In addition to providing links for buying TV episodes, for instance, the attribution layer will give information to users such as the date a TV episode first aired.

Revenues from the video ads accompanying the uploaded MTV episodes will be be shared among MySpace, Auditude, and the video copyright holders.

But with the exception that content providers might get more control over which video appears online, the approach MySpace is now taking doesn't seem all that different from the strategy Google announced near the end of 2007, after being hit by a $1 billion lawsuit by Viacom in March of that year.

Viacom charged that YouTube did little or nothing to stop users from posting clips from Viacom-owned entities such as Comedy Central and Nickelodeon, mainly because those videos helped drive viewers to ads appearing on YouTube.

YouTube users then instigated a boycott against Viacom and its properties last summer, when as part of the legal proceedings, a federal judge ordered Google to turn over to Viacom a log containing the user login IDs and IP addresses of sources from which videos were downloaded, together with details about those videos.

YouTube users took the opportunity in July to consistently refresh a growing cache of anti-Viacom content on YouTube, with materials that included new videos exhorting people to band together in a boycott covering Viacom's Web site, MTV cable networks, Paramount films (including the Indiana Jones film that premiered in May), and other Viacom-owned properties.

Under the strategy announced by YouTube after Viacom filed its suit, YouTube is supposedly first identifying video clips and then giving holders of the copyrights a choice between either (1) having the video taken down or (2) allowing YouTube to place ads on it in exchange for a chunk of the revenue. Then last month, YouTube started adding click-to-buy links for products -- like songs, books, and movies -- related to the content from partners that's available for viewing on the YouTube site.

YouTube's participating content owners in the plan include CBS Corp., Electronic Arts (EA) Inc., and Universal Music.

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