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On youtube and elsewhere it's frequent to find "MAD" video, a sort of Anime Music Video (AMV) composed by anime sequences on a music track. Are MAD and AMV synonyms? If not, how these differ from each other and what MAD means?

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MAD are probably refer to a broader classification of AMV from Japan.

According to the Nico Nico Pedia:

MAD refers to video and/or audio created by editing and rearranging existing video or audio, to give it new meaning. Basically, they are derivative, fan creations.

The name is probably derived from "MAD Tapes" from the 80s-90s which was the fad in which people uses cassette tapes and mess around with the audio. The acronym for MAD predates the popular usage of the term "anime."

MAD can be used to describe the the Japanese underground media community. However, MADs can be mush-ups of anything from audio clips, edited pictures, to wholly originally created content (e.g. custom animation). While not all MADs are associated anime or manga, most of the more popular ones typically are.

AMVs on the other hand typically describe the American media subculture of editing bits of anime with music, though similar in content the scope tends to differ.

Lets compare this AMV: http://www.youtube.com/watch?v=v9dHD1JvUXo

to this MAD: http://www.youtube.com/watch?v=XRHItX-zQCo

The MAD mashes up a lot more custom together compared to the clips in the AMV.

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    Just want to note that there are MADs that aren't set up like a music video at all and are therefore even less similar to AMVs. Sometimes they involve replacing a character's line with another line - anything ranging from the same character's line from a different scene to an unrelated live action movie's line. – atlantiza May 26 '13 at 18:50
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I think MAD and AMV is one. MAD is shorted for "music anime douga", similar to "anime music video" aka AMV. There's lots of pages saying that these two are actually one kind of fan-made video, too.

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