Software that lets broadcasters place advertising on video clips uploaded by other people will be tested this month by MySpace and MTV Networks.

Hollywood studios and TV networks have tried to defend their material by issuing “take down” notices to the likes of MySpace and YouTube when people upload video onto the internet without their permission. The new technology can automatically add advertising to these pirated videos, allowing the copyright owner to make money from the illegal clips.

MySpace - which is owned by News Corporation, parent company of Times Online - said today that it would apply the technology to videos featuring some programmes owned by MTV Networks, including The Daily Show with Jon Stewart and Punk’d.

"This is a game-changer," Jeff Berman, president of sales and marketing at MySpace, said. "We're going from a world of no to a world of yes while protecting the rights of the copyright holder."

The technology, which has been developed by Auditude, an American start-up company, is essentially a video-fingerprinting system that is capable of analysing billions of seconds of TV and online footage.

YouTube already employs a content identification tool that gives content owners the choice of removing infringing material or applying an advert. YouTube, which is owned by Google, said that copyright owners chose to add advertising rather than block pirate videos 90 per cent of the time.

Media companies are watching MySpace and YouTube’s experiments with the technology. Reclaiming pirated content could, in theory, expand the reach of programmes that carry advertising and, in turn, increase a broadcaster’s revenues.

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