LOS GATOS, Calif. – Vance Ikezoye didn't set out to become one of the digital revolution's top copyright cops when he first began tinkering with the technology that launched Audible Magic Corp.
At first, all he was looking for was a better way to identify songs and advertisements broadcast on the radio.
But Ikezoye's ambitions have shifted with the media landscape, positioning Audible Magic to control what can and can't be watched on the Internet.
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"It's been an interesting ride," said Ikezoye, Audible Magic's 49-year-old chief executive. "We are kind of in the middle of everything, where we are part mediator and part battering ram."
Audible Magic's system scans online files for copyrighted material, checking against a vast database of audio and video content provided by recording, movie and TV studios.
After analyzing the digital fingerprints, Audible Magic determines whether the material has been authorized to be shared on a site like YouTube.
While several other startups are developing their own weapons to combat the unauthorized distribution of copyright music and video on the Internet, Audible Magic has emerged as the early leader of the policing pack.
"It's like everyone has to nail their houses together right now, and Audible Magic is holding a bag full of hammers," said Forrester Research analyst Josh Bernoff.
Privately held, Audible Magic doesn't disclose its financial results. The company employs fewer than 50 people and expects to become profitable this year, Ikezoye said.
Despite its Silicon Valley roots, Audible Magic is primarily backed by a Naples, Fla., venture capital firm, Tierra Del Oro, which has invested less than $30 million in the company so far.
Although YouTube and other sites revolve around homemade videos, copyrighted content has also helped attract millions of viewers to the Web.
In January alone, 123 million people in the United States watched 7.2 billion videos online — an average of nearly two videos per viewer each day, according to comScore Inc.'s Video Metrix.
But audiences could dwindle while legal bills rise for Web sites that have been showing unauthorized video clips.
That threat crystallized this month when Viacom sued YouTube and Google for more than $1 billion in a federal complaint alleging YouTube hasn't done enough to prevent its users from posting thousands of copyright clips to the site.
News Corp. (NWS) and NBC Universal recently underscored their growing impatience with the unauthorized use of their video by forming a new joint venture that will distribute their TV shows and movies on the Internet.
Those actions make it more likely that sites hosting online video will have to buy copyright-checking tools from Audible Magic or one of its rivals — a group that includes Gracenote, Advestigo, Auditude and Vobile.
Another startup still in development, Attributor, is taking things a step further by developing software that is supposed to enable copyright owners to scan the entire Internet to uncover the unauthorized use of their material.
"Technology like Audible Magic is necessary, but it's still not sufficient," said Jim Brock, a former Yahoo Inc. (YHOO) executive who is running Attributor. "It still doesn't get you to the finish line."
Others remain uncertain whether Audible Magic will be able to protect video copyrights as effectively as it has done with music.
"Video recognition creates some new challenges," said Dean Garfield, executive vice president for the Motion Picture Association of America, which is still vetting the approach of Audible Magic and 11 other anti-piracy vendors.
To make the leap to video, Audible Magic last year obtained a license for a technology called "Motional Media ID" that was developed by David Stebbings, formerly an executive with the Recording Industry Association of America.
The company says its patented technology is fast, simple and accurate, though Ikezoye declined to provide details on exactly how it works.
"We are very confident our technology will meet the needs of the marketplace," said Ikezoye, who was a marketing executive at Hewlett-Packard Co. (HPQ) before breaking away to become an entrepreneur in the late 1990s.
The list of Web sites that have recently bought Audible Magic's copyright-protection tools include MySpace.com, the largest online social network, Break.com, an online entertainment channel catering to men, and Microsoft Corp.'s (MSFT) Soapbox channel.
Online video site Revver.com also has been testing Audible Magic's copyright-screening tools.
YouTube's business relationship with Audible Magic remains a mystery. The San Jose Mercury News last month reported that YouTube had decided to embrace Audible Magic's copyright-checking system, but neither of the companies will confirm a deal is in place.
When asked whether Audible Magic is working with YouTube, Ikezoye smiled slyly and said he couldn't talk about it. A YouTube spokeswoman said the company doesn't comment about any technology obtained from outside vendors.
"As a company that respects the rights of copyright holders, we expect to continue to take the lead in providing state of the art ... tools and processes for all copyright holders," YouTube said in a statement.
Audible Magic already endeared itself to the entertainment industry by developing one of the first solutions for detecting and deterring music copyright violations over file-swapping networks popularized by the original Napster and its imitators.
"We had to do something to stop this activity, so it's been gratifying to see how (Audible Magic) has used their technology in an affirmative way," said Cary Sherman, president of the Recording Industry Association of America, a trade group that has spearheaded the attack on illegal music downloads.
About 75 universities nationwide now rely on Audible Magic to monitor their networks for the peer-to-peer sharing of copyright music.
That number is likely to grow as recording industry and Congress pressure university administrators to curb piracy occurring on their networks.
College students accounted for more than 1.3 billion illegal music downloads last year, or about one-fourth of unauthorized activity, according to the research firm NPD Group.
In a show of its appreciation for Audible Magic's anti-piracy efforts, the music industry invited Ikezoye to attend the Grammy awards in 2005.
But it's only a matter of time before loopholes are discovered in Audible Magic's copyright protections, predicted Peter Eckersley, staff technologist for the Electronic Frontier Foundation, an online civil liberties group.
"It's going to become a futile game of cat and mouse," Eckersley said. "For every measure, there is always a countermeasure."