Q: Also, it looks like Google's YouTube is taking more action on this issue? It looks like Brightcove has a different approach?

A: YouTube's approach, so far, has been to work directly with many of the major labels because of the large number of music videos on the site as well as the popular music being used in all types of user-created videos. Brightcove appears much more business focused in that they have always planned to be able to sell ads, but I think everyone in the Internet space is grappling with the same issue. Now that they've unleashed this great outpouring of user-generated content, how do they make sure that it doesn't run afoul of the copyrights held by the record labels and entertainment companies?

The critical issue and the one coming to a head is the desire of most Web sites to commercially exploit this content in some way - mostly via advertising. At that point the law becomes very clear and you cannot use music in anyway without permission. After all, a piece of video content with an ad before it or after it is simply television.

One way people would like to see this done is to get the copyright owners to cooperate with you so that consumers can use the latest Black-Eyed Peas hit in their videos or on their Web pages. That can work, but clearing such rights is time consuming, very difficult to do and is expensive. Another way is to secure the rights upfront, so you can provide consumers with a wide range of good music that they can mix and match as they see fit. I'm focused on this latter option.

Q: What is your approach? How is it working?

A: Pump Audio deals with the copyright issues upfront-before songs are used in any production, whether it's on traditional TV or in a hot viral video. We can do that because we work directly with thousands of independent artists worldwide. We find the best music, across dozens of genres, and then supply those tracks to both traditional producers and to the new breed of consumer creators on the Web. This is something we've been doing for major media companies for years, so we are very familiar with the legal issues and how to service people producing video content effectively. This is how we've been able to place so much music in so many major TV shows and this is how we'll solve these problems for our Web clients too.

Our Web efforts have really picked up this year because of the huge need for copyright-cleared music. We launched a tool for consumers, called the Pump Audio Soundtrack Service, where they can pair independent music with their videos. We're also striking deals directly with video and user-generated content sites. One True Media, for example, is using a selection of songs from our catalog to offer its users fresh music for their videos and slide shows. RockYou.com is another partner you'll see us launch with very soon, and there are many more in discussions. In just the past couple months, the copyright issue has come full circle and the Web universe is beginning to fall in line with the legal realities and complexities of music, so we think our approach is going to be increasingly important as the new user-generated sites mature and address copyright violations head on.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.