Yahoo, fingerprinting and Sony BMG

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I noted in an earlier post that the most important use of content-recognition technology may be in promoting legal, monetized distribution of content, rather than blocking unauthorized distributions. A good example of this comes in an Associated Press report this morning on a deal that Yahoo inked with Sony BMG.

The deal (Yahoo’s first with a major record company) is similar to the ones that Google’s YouTube signed months ago with all the major labels, starting with Sony BMG and Warner Music Group. It allows Yahoo users to upload music videos by Sony BMG artists (e.g., Bruce Springsteen and Alicia Keys) in exchange for a cut of the advertising revenue they generate. More intriguingly, it lets Yahoo users share those videos widely through Yahoo’s music player (which differentiates from iTunes by integrating Yahoo’s instant-messaging software and buddy lists) and post them on blogs and websites within the Yahoo network.

The AP story noted that Yahoo planned to incorporate fingerprinting and filtering technologies early next year. While those technologies are blocking unauthorized videos from those who haven’t inked revenue-sharing agreements with Yahoo (e.g., Sony BMG’s competitors), they’ll also be helping Sony BMG and Yahoo collect more advertising dollars. Which approach sounds better for a label’s bottom line?