The technology, created by ad technology provider Auditude, will automatically insert ads across MTV Networks' video content when users upload the footage onto MySpace.
Users uploading the copyright-infringing footage will therefore not be served the usual take-down notices and instead, the ads inserted around this content will generate revenue for MTV.
Auditude's technology pairs an automatic identification system that cross-indexes billions of seconds of TV and online footage in seconds with an ad platform that allows content owners to serve targeted ads within that content.
Jeff Berman, MySpace president of marketing and sales, said: "Auditude is opening the floodgates for users to program video on and ensure copyright holders get paid.
"In one fell swoop, Auditude and its partners are empowering consumers and building a better business model. That's a good deal all around."
MTV Networks is allowing only a selection of current and archived footage to be tracked by Auditude, such as MTV series 'Punk'd' and Comedy Central series 'The Daily Show With Jon Stewart'.
Adam Cahan, chief executive of Auditude, said: "[Auditude] embraced the fact that online video is fundamentally social and created the identification technology and advertising platform to include the power of audience syndication -- fans uploading content to the web -- as a form of content distribution.
"Our partnership with MySpace allows us to help content owners, like MTV Networks, reach their fans where they are most active.
"We hope to grow the market for monetizing online video by simplifying ad targeting and providing scale through audience participation."
Auditude's technology also includes "Attribution Overlay", which allows content owners to integrate information about the video clip being played, such as identifying the channel that broadcasts the programme.
Content owners can also give the viewer the opportunity to watch additional relevant content or to buy the show or related merchandise.
Ed Bartlett, EMEA vice-president at in-game advertising specialist IGA, pointed out the arrangement's similarity to ad-funded free content.
"MySpace will undoubtedly experience some success with this model," he said, "but the exact amount actually depends on the quality of the content, and whether advertisers are keen on targeting people who are effectively engaging in piracy. The question is, will it keep the audience coming back again and again?"
The deal comes as Viacom, MTV Networks' owner, continues its long-running battle with over claims that video-sharing site allowed massive copyright infringement of the media giant's content.
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