Big news Adapt.tv raised $10M and prepares to release new ad technology that would allow them to insert overly ads onto streaming video clips, and has begun experimenting with this ad technology with Metacafe, according to Beet.tv.

What are overlay ads?

The ads are “akin to the banners you see running at the bottom of a news or sports TV program—although the ads don’t stay in place throughout the entire clip. An example is below. These overlays are not intrusive and they provide a hyplerlink where users can click onto a sponsor and then come back to the clip.”

Why does this matter?

Well, their tehnology will give the little guys (a.k.a. narrowcasters; i.e. not youtube, google, brightcove,etc) the ability to monetize the video content they create, giving them another revenue stream they did not have.  Many .tv developers (and potential video site developers) may feel more confident about tackling the costs of video production because they know they can monetize their content in this way.

What is the revenue split?

“The company shares revenue on the basis of the yield of the ads, and the revenue split is 70/30.”

Check out the interview Beet.tv did with Sean Behr, VP of Adap.tv, on the jump…