Google tests video distribution model with MTV, Microsoft's URGE partner

Posted by Scott M. Fulton, III

Mountain View (CA) - In the wake of Microsoft's announcement that it is indeed working to build a competitive portable audio system against Apple's iPod, many analysts predicted the announcement alone would drive Microsoft's current Windows Media partners into the dens of rivals. The first indication of this since the Microsoft announcement came this morning, with Google's announcement that it is working with MTV Networks - Microsoft's partner in its URGE music service - in an experiment that could expand Google's AdSense to include both video content and video ads.

The move also places MTV Networks squarely into all three major camps of content distribution. Last June, MTV announced a deal that would make reruns of its original programming available through Apple's iTunes. By testing the waters with Microsoft, Apple, and now Google, MTV - and its corporate parent, media giant Viacom - could be gauging which will be the stronger partner for opening up broader, long-term deals for all its digital content distribution.

Without releasing many details, Google's announcement gave the only hints it needed to give: AdSense, its text-oriented targeted advertising service, is being expanded to accommodate video clips. While Viacom's strengths these days are in cable networks, its heritage is in advertising, being one of two major media corporations from the 20th century to have evolved from an outdoor billboard advertising firm (the other being Turner). Viacom's could be the first moving billboards, if you will, to appear in the midst of pages from the Internet's leading search engine.

As a huge bonus, some of the most recognizable faces and characters in the MTV Networks suite will make themselves available through Google Video for $1.99 per download, including many of the premium names and brands that Apple missed out on. Nickelodeon's "SpongeBob SquarePants," MTV's "Beavis and Butthead," Comedy Central's Dave Chapelle, and perhaps the most censored products of flannel-board cutout technology in history, the residents of "South Park," will be added to Google Video's roster of downloadable shows. Among the items to be made available in the first wave will be clips from MTV Music Video Awards shows, and a certain self-explanatory series of segments entitled, "Your Brain on SpongeBob."

Had such an announcement been left to its own devices, analysts might have concluded it was a signal of Google's intent to broaden its base further into the music and audio download segment, where iTunes is the current runaway leader. This could jeopardize MTV's standing with its other two partners; so to help ease tensions, Google's head of business development, Chris Sacca, made a pronouncement last Thursday before a music merchants' convention in Florida: "We are not going to be selling music."

In other words, a media giant took time out of its busy day to appear in Kissimmee before a group of CD retailers to say hi, how do you do, and we don't plan to compete with you.

If MTV's and Google's experiment is successful, it could open up a unique and somewhat unpredicted two-tier channel for online streaming advertisers. Companies that already advertise through conventional broadcast or cable media could find their ads carried online as a bonus. So rather than, say, Pepsi making an AdSense purchase directly through Google, it could find itself being streamed with Cartman or Beavis inside a window that crops up while a user makes a targeted search for something related, such as, "annoying body sounds." Google has yet to publicly demonstrate this distribution model.