The declining value of social network ads, particularly on Facebook are in strong opposition to the level of engagement these sites generate. Facebook users spent 527 minutes on the site in the second quarter of this year, MySpace users spent 677 minutes.

The launch of targeted ads by way of Beacon was a failure, but if Facebook opened up a reasonably priced subscription service tomorrow, I would pay for it and so would many other uses.

One of the distinctions that needs to be made regarding personal information sharing, really a better term for the vast majority of what is today termed UGC is that the information being shared is only valuable to a small number of family and friends. In this sense, it’s not content in the sense of mass media and shouldn’t be described or distributed as such.

This is what I mean when I say UGC is dead. There is no market for it except to a user’s personal network and because it’s personal, a user is more likely to pay for a subscription in exchange for a secure, private environment in which to share their personal information with friends.

Unless the person is uniquely desirable for advertisers to reach (think someone really rich like Bill Gates) you’re not going to be able to get a high CPM for that small network without excessively intrusive targeting.

If it’s Bill Gates you may get a million dollar CPM because there are a substantial number of luxury brands that would like to reach him, but the few in his demographic would far rather pay to protect their privacy.

And he’s not alone. A substantial number of existing social network site users already prefer to pay a nominal fee for premium services, preferred privacy settings and the assurance that their private information will not be shared with advertisers.

While social networks are still in a period of heavy competition and can’t avoid alienating users by charging everyone right away, they could certainly begin charging those who place a value on the privacy of the information they share and premium features that are offered.

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.

No surprise that the folks at AdAge get it. Online ads are a reasonable value exchange for good content. Not so much for UGC. Just look what happens when you stop asking people if they like advertising, and instead ask them if they are giving and getting something of fair value in the exchange.

Remember The Covenant…..kinda sounds like it to me……

Where the hell have we been? Well, I discovered this thing called “Vacation.” I’d heard about it. Read about it. But like the Loch Ness monster, I hadn’t seen one. But that changed last week. And of course, now I’m playing catch up. Damn real jobs.

Apologies for the lack of updates. Fortunately our Blogroll provides plenty of additional reading.

Plenty of thoughts to write about, though. Fear not. We’re still full of pithy opinions. But two real-job-having bloggers run into time constraints, so drop us a note if you like to bloviate about online video. Anyone from an agency that thinks publishers are the problem? Publishers that think agencies don’t get it? Technologists that know they are both wrong? You don’t need your own blog. We love guest editorials here!!!

Google’s recently announced deal with Family Guy creator Seth MacFarlane in which they will deliver original content across their AdSense network signals a new era in content distribution. It will no doubt increase the value of AdSense video ads but it lowers the value of content.

The project, dubbed Seth MacFarlane’s Cavalcade of Comedy will carry a multimillion dollar production price tag for 50×2 minute episodes delivered over what Google is calling the Google Content Network. For an additional fee MacFarlane will create custom animated ads.

What Google is essentially doing is using quality video to increase the value of what has been historically low CPM advertising. Despite relatively effective targeting AdSense still gets lousy engagement in the form of low click-through rates and while I can’t speak for all users, I for one, have become desensitized to them in the same way that I ignore banners.

It goes without saying that Google’s distribution reach is massive. Google’s targeting of text ads so far has been less than ideal but their massive network can be very effectively optimized for video because there is more to measure.

Google is turning its AdSense network into the vision of the thousands of IPTV channels people spoke of as the future, except video is served across millions of contextually targeted websites rather than thousands of linear networks.

What bothers me, is that while this is a game changing, entirely new type of content deal, I would argue that it is lowering the overall value of the content. For creators, if not for networks there has always been some sense of creative independence and value in storytelling.

You can’t do in a 2 minute clock what you can do in 22 minutes. With network ratings declining and reality shows taking the place of big-budget shows like Studio 60, one can only hope that there will be a place for both.

The poor 24 year old media planner gets a bad rap. They’ve got a difficult job and work under tremendous pressure and impossible deadlines. That said, they are often ill equipped to handle the research and comprehend the different technologies that are popping up (and going away) in our rapidly evolving media landscape. So what is an agency or agency staffer to do?

Read The X Factor.

For those of you unfamiliar with his ramblings, rantings and righteousness (keeping with the alliteration, not a knock on Sean), Sean Cummings is one of those brilliant people. Like, really F’in brilliant. Almost “Big Bang Theory” brilliant, except he’s not a social pariah. Unless you’ve been on the wrong end of one of his diatribes. You might not invite him to your next party. But fear not, he’s got plenty other parties to attend.

What I like most about Sean is that he says the things that most of us won’t or can’t say without getting fired or at least pissing off a client. Remember blogging before you put your name on your blog? Ah, the good old days. But Sean tells it like it is, or how it should be. Lately, he’s been bashing banners and the people who buy them or execute them poorly.

Head on over to iMediaconnection.com and take some time to read his new X-Factor columns. You’ll be glad you did. Unless you leave a comment that disagrees with Sean’s point. Then you better look out, or find a new job in a different industry.

Ed note: Sean is a personal friend of mine and I have nothing but the highest regard for his expertise. You should seriously read his columns.

I loved the lead in today’s Broadcasting & Cable newsletter in regards to upfronts Flat Is the New Up: “CBS is down 8%, while Fox and ABC are down double-digits — 11% and 15%, respectively. Fourth-place NBC is flat. Buyers expect the networks to ask for CPM inflation increases, but this season’s poor ratings may make higher ticket prices hard to justify.”

But brand advertisers still look to TV for reach, and well positioned TV networks will be in prime position to sell them digital. That was more or less the sentiment offered by Les Moonves earlier this year at the McGraw Hill Media Summit:

We haven’t had original programming since November 20th, that’s a big chunk of time, furthermore we’ve changed our ratings system…so by definition the numbers are different…

We’re more of a mass market mass-medium so ultimately we say you want to buy for national we’ve got that you want to buy local we have billboards we have radio we have local stations…if you have a dollar to spend we can spend the whole dollar for you, we can show you how it can fit for our CBS properties without having to go elsewhere.

And this continues to be the general perception of most network media execs. While media fragments, TV is still the biggest draw. At the same time networks are branching out into digital programming and other advertising platforms which combined with their traditional ad sales should place them in a very competitive position.

For example, I spoke with a FOX executive at the IAB forum last week who mentioned the power of selling MySpace advertising as a digital and international extension. This adds tremendous, measurable value across the board, and is a present day example of media convergence, if not one directly visible to users.

While it’s easy to say new media is hurting networks, because of their entrenched position and scale, it is more likely to help them in the long run so long as they’re smart about integration.

Does television have the power to drive web video consumption? If last night’s episode of How I Met Your Mother is any indication, TV’s influence over the web might not be nearly what people would expect.

The CBS sitcom featured highlights from Robin’s past, when she was the Canadian pop one-hit-wonder, Robin Sparkles. We’d previously seen the video for her breakthrough hit, but at the end of the show, there was a teaser for the “Sandcastles in the Sand, ” her follow-up single, music video on MySpace.

The show airs at 8:30pm, and as of 10pm last night, there had been roughly 17,000 views of the video. However, this morning, after the show aired in all time zones, there have only been 35,500 views. According to an article in the LA Times a few weeks ago, the show draws an average audience of around 8 million viewers, and had 10.6 million viewers during a recent episode featuring Britney Spears. That’s a paltry .35% of the audience checking out the additional web content in the 12 hours immediately following the broadcast.

Yes, its a bad spoof of 80s videos from Tiffany or Madonna, but you’d have to watch it to find out.

Sandcastles in the Sand

Yes, thats vague. But I could tell you that my weekend pick was Matzah and gefilte fish, but thats not what I’m looking forward to at all.

Over the past week, I’ve spoken with reps from a number of the major video aggregators and streaming providers about their recommended settings for outputting video from the web to TV. I also purchased a monthly subscription to the MLB.TV Premium Package for their 1.2MB stream. I’ll be tweaking my video card and TV and starting OVW’s own convergence video shootout.

Beyond the novelty factor, what online video can really replicate - or even hold its own - against a TV offering? On my previous experiments, I’d been using an s-video output into a regular CRT display. Now we’ve added DVI/HDMI outputs to the mix, and a 1080p plasma TV to the mix, which may not be as forgiving. We’ll just have to see.

We’ve yet to decide if we’ll do a comprehensive comparison, or share our thoughts on a rolling basis, but I’m looking forward to Arrested Development on Hulu, a few movies on Netflix’s Watch Now, and maybe Veoh’s most popular content, Star Trek (ok, maybe less so for the Star Trek, but I’m sure I’ll find something to enjoy). I’ve had some issues with Microsoft’s Silverlight player with my previous MLB experiments, but I’m hoping they’ve worked through them. Do the TV networks have a leg up when the screen you watch on is a TV? My sofa and I look forward to finding out…..just as soon as we’re done with our Seder.

Joost has become the new Hulu, the online video company everyone loves to hate. Unfortunately for them the criticism comes after they launched, but Joost has two critical things going for it: advertisers love it, and as a result content owners are involved.

If Joost runs itself into the ground it will have only its management to blame. They have the financial backing, market presence and technological know how to turn things around, but to do so they will need to focus on their core competency: providing a better user experience than any other service.

For now Joost needs to forget about P2P, forget going global, and focus on building a platform which is technologically above and beyond anything else, which meets the expectations of the wide range of users consuming content online and delivers a better value exchange for both users and marketers.

This means moving beyond the downloadable player, though there is still a place for it, putting users in control, and pairing advertisers with content in innovative ways. Once they do this the legit content deals will follow, the users will follow, the scale for P2P and an international presence will follow.

It is no easy task, but it’s Joost’s last remaining chance to differentiate themselves. User experience is what they built their product on to begin with and if they can’t deliver on that then they’re already done.