Business Models For User Created Content David Chu Alex Dailey Thomas Goerner Kevin Lim Wojtek Poppe Richie Teo

Introduction: “Why should I even care about User Created Content?”

The Rise of UCC Lower bandwidth costs Lower storage costs Higher bandwidth penetration Source: Technorati,

The Rise of UCC Source: Technorati,

The Rise of UCC Photo Video Wikis Podcasts Source: Alexa, March 11, 2007

UCC Paradigm Change The user is both the producer and consumer Control over content is relinquished Differentiation based on platform technology and critical mass Aggregators (content and advertising) bifurcate content distribution

Business Models: “Can I make money by creating videos, writing blogs?” – average Joe user “Is it profitable to be giving away all this free storage and functionality?” – UCC provider

Business Models USERSPLATFORM Ad-Supported Direct Payment Sponsorships Donations Reputation Builder Ad-Supported Versioning Complementary Products Revenue Sharing

Advertising Supported TechCrunch makes $120K a month from ad-sponsors. Popular bloggers / podcasters can have direct relationships with advertisers, sponsors. sponsors married punk-rocker’s podcast. “Diet Coke and Mentos” user makes $30K provides ads for the average long-tail blog Long tail users can use third-party tools to get ads.

Direct Payment Advertisers pay bloggers directly to write reviews about their products (by using marketplaces like PayPerPost): $3-$100 allows users to set prices for viewing videos (one-time, subscription)

Jumpcut runs a “trailer mashup” contest for the movie A Scanner Darkly (prize: movie premiere tickets + video editing PC) Sponsorships / Contests

Reputation Builder Appeared on the Jay Leno show and the cover of Wired magazine Rocketboom’s offer to do ads for companies fetched $40K in an auction Rocketboomlonelygirl15

Versioning Basic: Free Pro: $24.95 Basic: Free Paid: $19.99 Plus: Free w/ ads

Complementary Products FREE PAID $19.99 $18.99 $19.99$9.99

Revenue Sharing VOX allows users to get book and CD images directly from Amazon. When readers click and purchase these items, VOX gets 7% rev. share

Issues with Monetization of User Created Content

Concerns within Ecosystem Platform Lack of control over content Faced with low switching costs Little IP protection Little opportunities for differentiation First mover Lack of control over viewers / producers Producers Danger of being bootlegged Rise above the clutter Unclear how to integrate professional content Consumers Find the good stuff among ho-hum content Little platform affinity Low willingness to pay Hype Factor

Concerns within Ecosystem “Winner takes all” in most media Low switching costs shift the competitive advantage to technology (search, brand advertising) and critical mass Competitors Need critical mass Quality of Content One Hit Wonder Lack of Content Exclusivity Complementors Merchandizing (unpredictable) ISP (network neutrality) Integration of products Advertisers Sponsorship necessitates critical mass Lack of aggregators which cover all UCC types Content Relevance PR Long term viability of engagements Lack of metrics

Requirements for Sustainability Extract signal from noise Traditional Solution: Content producers User-Driven Solution: Meta-tagging of non- traditional content Technological Solution: Analytics-based recommendation systems Metrics needed to measure efficacy of ad campaigns

Requirements for Sustainability Ad brokers which deal with all UCC types Ability to build brand equity and not just drive purchases “Online brand advertising is young, and is where future growth will be.” - DB Analyst Report

Revenue Models That Work Advertising Versioning Complementary Products Reputation Builder

Q&A Users Platform Ad-Supported Sponsorship Direct Payment Donations Reputation Builder Ad-Supported Versioning Revenue Sharing Complementary Products