Media world eyes Viacom-YouTube slugfest

And as major media companies race to transform themselves into digital distributors and fend off YouTube’s encroachment on their audience, they’re also looking at a variety of alternatives. In addition to beefing up their own sites, traditional media companies are closely watching developments among a group of Web media companies that are trying to leapfrog Google and YouTube.

BitTorrent, a popular file-sharing technology that claims 135 million users worldwide, developed a loyal following as a tool for pirated video and audio downloads. Now, the company has re-tooled itself as the BitTorrent Entertainment Network and partnered with Viacom and other media companies to offer paid video downloads. Users can buy new release movies for $3.99 each; TV shows and music videos cost $1.99. So far, 20th Century Fox, Lions Gate, MTV Networks, Paramount Pictures, Warner Bros. Home Entertainment and MGM have signed on.

Companies like Cambridge, Mass.-based Brightcove are working different approach: using a technology that embeds video ads in programs. That way, the creator of the content hosting the ad can generate revenue no matter where the video ends up on the Internet. The software could also help advertisers track how widely a video was distributed, and what sites end up hosting it.

Other companies are working to combine video ads with Google’s “keyword” model — in which advertisers pay for search traffic generated by a specific word or phrase. ScanScout is pitching a technology that lets advertisers target specific topics or words that appear in the video being played. As the content of the video changes, the associated ads change accordingly.

Rather than encroach on traditional media companies business, these new technologies could open up new revenue sources, especially from smaller companies that may see traditional media advertising as too pricey.

“One of the most under-appreciated advantages that Google has is the breadth of advertisers especially small- to mid-sized companies,” said Schacter. “They don’t have to go hire an agency and hire actors and make in their own commercial.”

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