User-Generated Revolution

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The conference rooms were packed tighter and the voices were much more confident at this year's Digital Hollywood event in Los Angeles. Senior executives from Hollywood, Madison Avenue and Silicon Valley gathered to discuss, and more often debate, the capabilities and challenges of digital media.

Two of the most popular panels, both entitled, "User-generated Content: An Internet, Communications and Advertising Transformation," focused on trends and business models.

Never before has consumer attention been so quickly re-directed to the web. Teenagers, and even their parents, are spending hours online maintaining blogs, updating social community profile pages, watching videos from friends and posting comments on their favorite photos.

Now that it's proven that user-generated media is here to stay, businesses are exploring whether it's most promising future potential is as a communications or entertainment medium.

During the first panel, most eyes were on Hunter Walk, product manager of Google Video. He asked the audience, "What encourages people to start uploading video? We think it's monetization. What makes the amateur chef upload cooking videos? If she knew she could make a couple hundred dollars a week through the ad model, she'd be more willing."

Todd Herman, general manager of media experiences at MSN Entertainment, had a different opinion: "There are the obvious reasons for the increasing amount of user-generated content: ease of use and getting paid; but people also want to be better at telling stories. They want to express themselves more clearly. Going forward there will be new human-created stories, which I personally think is more exciting."

With a sense of responsibility, thankfully, to help artists succeed, business can reward the content producers and also profit. Revver is one of the leading companies doing just that, by paying video content owners based on performance.

"We believe that the user should be able to determine what videos to post and where, and if they want to mash up their own content. Mashup work brings a whole new set of people into the mix who don't even own a video camera," said Bill Jeffries, vice president of network development at Revver.

Panelists acknowledged that rights owners are both excited and worried about their material being altered. 

"Rights owners do not want to salt the earth. Many different business models can exist. Our obligation is to come up with the technical solutions to enable the users to do what they want to do," said Google's Walk.

Technology may sound like a simple solution, but the strategy decision is not.

Is there a winning strategy?
The panel raised the question of which strategy will likely dominate the industry: video destination locations or open distribution? The answer nowadays is both.

Whereas Revver's strategy is to let anyone affiliate with its technology and distribute content anywhere they want, the CEO of Photobucket, Alex Welch, is betting on his destination. He added, "The average consumer has multiple online identities that he or she maintains each day. They want a central place to publish their content. Users are getting the reach for us by sharing with their friends."

Herman supports MSN's concept of "placelessness," in which various platforms are used to promote content. "Sites like confabulator or macdashboard or live.com, as wonkish as they can be, are very precursor-ish. Why would you start at msn.com when you could start at your space?" Herman said.

"What's left that needs to be done is connecting," said Greg Kostello, CEO of vMix Media Inc. "How are videos connected together? Users don't know. vMix gives people a permanent home. We're the antithesis of Revver."

Next: Predictions for the next wave of UGC, and how advertisers can play a part.

 

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