MySpace, Chasing YouTube, Upgrades Its Offerings

SAN FRANCISCO, June 26 — Two years ago, millions of MySpace users
began adding video clips to their profile pages, helping to give rise
to YouTube, which Google bought last October for $1.65 billion.

This week, MySpace, a division of the News Corporation, will show that
it is serious about challenging YouTube in the booming world of online
video.

On Thursday, MySpace plans to rename and refurbish the video-sharing
service on its popular social network. The new service, called MySpace
TV, will be set up as an independent Web site (www.myspacetv.com) that
people can visit to share and watch video, even if they have not
signed up for MySpace. The site will also offer some new ways for
members of MySpace, which attracts 110 million users a month, to more
easily integrate the videos they create and watch into their personal
profiles.

The company's plan underscores its particular emphasis on professional
video, as opposed to the homemade depictions of wrestling dogs and
cats — the genre known as user-generated content — that are more
prominent on most video sites. For example, last week MySpace became
the exclusive site for Sony's "Minisodes"— five-minute versions of
'80s sitcoms like "Diff'rent Strokes" and "Silver Spoons." Tens of
thousands of users have watched the clips.

With MySpace TV, that professional material will be front and center,
said Chris DeWolfe, MySpace's co-founder and chief executive. "We
haven't really freshened up our video offering since we launched it,"
Mr. DeWolfe said. "We wanted to highlight the fact that we have a
video destination on the Web with all this great content that we've
acquired."

MySpace also wants to strengthen its hand against YouTube. The company
says it is cutting into YouTube's lead. According to the research firm
ComScore, MySpace had 50.2 million United States viewers of its videos
in April, the last month for which ComScore published data. You-Tube
had 57.9 million, only slightly higher, and MySpace grew at a faster
rate.

YouTube has said, however, that more than half of its audience is
overseas, and ComScore also published data that shows YouTube served
up nearly twice as many videos as MySpace in April.

Mr. DeWolfe said he believed that "no one has really pointed out that
MySpace has been focused on video and has quietly come within striking
distance of YouTube."

MySpace has another reason for taking on YouTube more directly. Just
as MySpace TV is being fashioned to compete with YouTube, engineers at
YouTube are busy developing social networking features. On YouTube's
"Test Tube" page, where the company tests products in development, new
tools allow YouTube users to chat while they watch the same clip and
share their favorite videos.

"I'm not surprised MySpace is promoting video heavily," said Timothy
Tuttle, a vice president at America Online who is responsible for
AOL's video search technology efforts. "YouTube is becoming a social
network that is maybe even more powerful than MySpace. So they are
rightly focusing on that."

Asked to comment on MySpace's plans, a YouTube spokesman, Ricardo
Reyes, said: "We are focused on continuing to provide a global
platform for our community to express themselves, share experiences,
and inspire one another."

MySpace first entered the Web video market in January 2006, after it
noticed its members adding videos from YouTube to their pages. The
original service still appears rudimentary.

Though MySpace has became the second most popular video-sharing site
on the Web, even its own executives agree that the site is lacking.

"When you go to MySpace video now, what you see is far less appealing
to the eye than what you get from other video sites," said Jeff
Berman, a MySpace executive who took over the video effort in March.

MySpace TV is meant to change that. The service will be immediately
available in 15 countries and 7 languages, much like YouTube's own
foray into nine countries announced this month. It adds features like
categories — groupings like animals and politics where similar topics
can be collected for easier navigating — which YouTube has had nearly
since its inception.

MySpace TV is also meant to more closely tie video into the social
network. Each MySpace member page will link to a separate MySpace TV
channel, which will display the videos the user has uploaded. Users
can change the design of those pages, adding the same flourishes they
use to personalize their profiles.

Later this year, MySpace also plans to let users edit and combine
videos on MySpace TV into new clips. MySpace acquired the technology
for this in May when it bought a start-up called Flektor.

But MySpace also wants MySpace TV to show off content like the
Minisodes or television shows and movies from NBC Universal and Fox,
which is part of News Corporation. The two studios are working on a
joint Internet video effort, and will distribute their programs on the
video sites of MySpace, Microsoft, Yahoo and AOL.

Short ads will appear before clips on the site. Josh Felser, chief
executive of the video-sharing site Grouper, which was bought last
fall by Sony, said advertisers clearly preferred such professional
content over less predictable user-submitted material.

"Most of the video content today is unsellable," Mr. Felser said. "We
are all in this industry looking at generating inventory that is
higher quality."

MySpace expects that part of the appeal of MySpace TV to studios and
professional videomakers will be its aggressiveness in protecting
intellectual property. The company was among the first major video
sites to use filtering software, which checks uploaded videos to
determine if they are protected by copyright. YouTube has also
embraced filters, but it is fighting a lawsuit brought by Viacom over
past infringement.

"We are sensitive to that issue because we are part of a bigger
content company, and protecting intellectual property is part of our
bigger business," Mr. DeWolfe said.

But whether that will help lure more must-see videos to MySpace TV is
another matter. Michael D. Eisner, the former Disney chairman turned
Internet entrepreneur, produced a popular series of Web shows this
spring called "Prom Queen" and let MySpace post them for 12 hours
before he gave them to other sites.

Mr. Eisner, speaking of MySpace, said, "It makes me feel good that
there is a multigenerational history in that organization of honoring
and respecting professionally produced content."

Mr. Eisner is creating a sequel and another comedy series, "The All
for Nots." He said he would not necessarily give the exclusive rights
to MySpace TV or even YouTube.

"Everyone is rethinking how they are going to work in content," he
said. "Down the road, content will help to define all these
platforms."