Well, I’m calling it – user-generated content is officially dead. Hulu is here, ABC is raking in the views with their player, the studios are still adapting but beginning to develop business models, and semi-professional content creators now have the tools to compete with mainstream content.
The line is clear, people want to watch professional content, it holds value. Anything else has no value, economically at least.
So there. Now that professional content has reasserted its supreme value over everything else we can sit back and watch as the rest is weeded off of video sharing sites in an effort to cut down on costs.
Brightcove and VideoEgg already ditched their UGC businesses, Revver was done in by paying for it, and the studios are picking their fights with the rest of them – most of the remaining players can’t survive on their own – there is a major shakeout coming.
The market for UGC will be controlled by companies that build communities for people and charge them for service – YouTube can’t subsidize everyone’s cats on pianos forever, well maybe they could but they won’t, or they’ll sell better quality and relegate the rest to a landfill of grainy 300k – the next generation’s black and white.
That said, there is a lot more that can be considered professional these days. The content universe is larger than ever before, and while UGC is worthless there’s plenty of time for those with passion to become successful professional producers. It doesn’t cost all that much to create professional content these days. All that’s needed is creativity, talent, and the persistence required to build an audience from the ground up.
One caveat……Direct Marketers. They will at least be able to leverage the insight into the audiences through targeting technologies to provide a trickle of revenue to the UGC sites. I don’t think they’ll be able to float an entire industry on .5% CTR, but somebody is taking classes at the University of Phoenix.
Once technology is able to filter out truly objectionable content from simply user-generated, CPA deals will still provide ads and ad revenue for anyone willing to take a shot in the dark.
UGC is only dead to slightly dead to most advertisers, not the people who publish the content. It’s likely that the majority of these people only want to see others rate and comment on their content, and don’t expect to really make money off of it.
YouTube will need to figure out a business model around UGC if they hope to survice long term, or heavily monetize their 4% professional inventory, or start filtering and only keep a small percentage of UGC, or maybe shift their whole model away from UGC altogether, which would completely change their brand and community.
YouTube is the player to watch in this space, as the bandwidth costs around it are high, the monetization value is low, and there will be increased pressure from Google to become profitable ASAP.
I think Jeremy makes a great point. It is only dead to those wanting to own and comodify it. The people who are doing it see it as alive and kicking.
Perhaps it’s better to say that the attempts to own, market and exploit it by the mainstream media have failed. But maybe its like the Godfather. When something turns against us it is dead to us.
To clarify, it’s dead in the sense of being considered content rather than personal information sharing which are two completely different things.
There was a perception that UGC was part of mass media, YouTube’s model was to distribute it as such, but mass distribution of UGC is a losing proposition. UGC has shown that it can’t compete with professional content, it’s impossible to advertise against. The best model is to offer users a place to privately share their information within a community of their friends like Facebook for a nominal fee.
I’ve expanded on this notion here: http://www.onlinevideowatch.com/facebook-will-never-turn-a-profit-on-ads-alone/
Agree or disagree, forecasting is not the best sport nowaday, ask WIRED.
[...] job keeping tabs on the latest developments in the online video world. I particularly liked this recent post, which focuses on the migration from user generated content to professionally produced content on [...]
These guys have a nice concept: Create a video according to their scripts and get money for your effort. Also they an interesting video advertising system.
http://newteevee.com/2008/08/12/imcandy-solicits-sellable-and-sexy-ugc-videos/