MySpace's experiment with Auditude in video ads might be creating a monsterThere's no time like the first weekday after Halloween to introduce the Frankenvideo. That's not what they're calling it over at MySpace, which announced Monday its intent to introduce a new technology developed by video ad firm Auditude. But just like the mad scientist that turned a lifeless lump into a breathing creature, Auditude transforms a revenue-draining, user-uploaded, copyright-infringing video into a profitable piece of content.
It's like turning a trick into a treat, or perhaps vice versa, depending on your vantage point. Pirates who think they are pulling a fast one by taking programming into their own hands become unwitting accomplices to the content owners. The treat for media companies, advertisers and Web site publishers is video with enough reach to rain some revenue for all involved.
It's hard not to be awed by Auditude. But as with Frankenstein himself, a miracle like this might also make for unintended consequences.
It used to be that when a user uploaded a video that infringed on copyright, content owners saw their programming devalued. Now, through a technology known as fingerprinting, that same video is identified the second it is uploaded and the content owner is empowered to attach an ad or links to additional sampling opportunities.
Palo Alto, Calif.-based Auditude is far from alone among companies employing this technology. YouTube has something called Video ID, where adding an ad is one option; content owners also are allowed to order the offending video taken down. But Google already has said that about 90% of the 300 content partners that use Video ID opt to capitalize on the additional reach this tool affords them.
Although MySpace is second to YouTube in traffic, its own solution to fingerprinting might be even more powerful. Auditude has gone through the trouble of scanning every second of programming that has appeared on about 100 different TV channels over the past four years (as well as doing the same for any video uploaded to leading online portals). All told, there are more than 1 billion minutes of video in Auditude's index.
That's a key difference from YouTube's offering, which puts the onus on the content owner to ship reference files of all its programming. As if that isn't annoying enough, imagine having to do that for the numerous Web sites out there aggregating significant traffic.
What's worse is that most user-generated content is essentially premium content illegally snatched. Auditude estimates that for every officially sanctioned video online, there are 20 illegal versions of that same video siphoning a content owner's viewership and, consequently, ad dollars. Views of illegal video are six times what their legal counterpart are.
Given these grim numbers, imagine the upside when all that contraband is reclaimed. Swords become plowshares, water becomes wine, whatever metaphor you like. Auditude thinks it can flip the premium video-UGC ratio from 35/65 to 60/40 and in the process exponentially increase the return of media companies.
Now, if this all seems too good to be true, well, maybe it is. Is it just me or does the very existence of Auditude and Video ID make a statement to consumers that piracy is OK, at least as long as participating companies can monetize their illegal efforts? Given that there are other forms of piracy that these technologies can't help — like the still-teeming realm of P2P — that's quite a mixed message to be sending.
It's also worth asking whether Auditude could affect MTV Networks, which was announced as the first company to collaborate with MySpace on the technology. What will the courts think of parent company Viacom's $1 billion lawsuit against Google that complains piracy hurt Viacom's business at the same time it is trying to capitalize on piracy? The same goes for content companies like NBC Universal, which has suggested that Internet service providers should have the ability to filter pirated content.
That said, it will be interesting to see what technologies like Auditude will do for pirates who might not take kindly to boosting revenue which they won't be sharing. Maybe crime pays after all, but not for them.
Andrew Wallenstein can be reached at andrew.wallenstein@THR.com.