It's fitting that Viacom's (NYSE:VIA) MTV -- a network that was launched by playing The Buggles' "Video Killed the Radio Star" -- has turned to Google (NASDAQ:GOOG) to help distribute some of its original video content in an ad-backed format. Google? Buggles? They do sound like J.K. Rowling-speak if you say them enough.
The deal that was announced this morning between Google and MTV Networks won't just include short video clips from MTV. Other Viacom stars like Nickelodeon's SpongeBob SquarePants will also be getting in on the action when the streams start coming later this month.
It's important to note that the deal content won't be the actual music videos that many associate with MTV's roots. If you want to see OK Go dance around on synchronized treadmills or the latest We Are Scientists video, you can stream that without the ads on YouTube or official band websites. Naturally, artists and their labels put out music videos as promotional vehicles. Yes, some music videos are actually sold through Apple Computer (NASDAQ:AAPL) these days, but that orchestrated gravy goes directly to the labels. Why would a label split ad revenue four ways for content it bankrolled?
This leaves us with Viacom turning to MTV's Laguna Beach and clips from past Video Music Awards broadcasts for its initial content feeds through Google's program. What makes this deal so intriguing, setting itself apart from the countless similar deals brokered over the past year between major networks and leading portals, is that Google will be turning to its growing community of AdSense third-party publishers to help spread the streams in exchange for a piece of the action.
The AdSense connection is being extended to a few handpicked sites at the moment. Naturally, established broadcasters don't want their content streaming from seedy, inappropriate, or lame websites. Viacom will be getting a slice of the ad revenue, but this is also a branding effort as it looks to grow the audiences for its offerings. However, taking the first step in getting its third-party publishers involved makes it perhaps the first legitimate counterattack to the runaway YouTube model by providing small sites all over the Web with the financial incentive to promote Google Video.
Viacom will also start selling entire episodes at $1.99 a pop through Google's storefront for shows like MTV's Beavis & Butthead and Comedy Central's Chappelle Show. That's the cookie-cutter part of this morning's announcement. The real story here is that we may finally see if YouTube is vulnerable to a one-two incentivized push coming from various corners of cyberspace.
If you want to sprinkle in a little drama, consider that Viacom isn't just playing on Google's team. Last year, MTV announced that it was teaming up with Google rival Microsoft (NASDAQ:MSFT) to launch the URGE online music subscription service.
Stay tuned. It's going to be a saga that may be worthy of streaming itself.
Digital music is a high growth industry and it's just the kind of industry that is often explored in our Rule Breakers newsletter service. Check out which satellite radio provider and musical ringtone enabler made the cut and more with a free trial offer . Microsoft is an Inside Value recommendation.
Longtime Fool contributor Rick Munarriz wonders if Bohemians dig Rhapsody. He does not own shares in any of the companies mentioned in this story. He is a member of the Rule Breakers analytical team, seeking out tomorrow's great growth stocks a day early.
