Business Models for User Created Content

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Business Models For User Created Content
David Chu Alex Dailey Thomas Goerner
Kevin Lim Wojtek Poppe Richie Teo
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Introduction
Why should I even care about User Created
Content?
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The Rise of UCC
Source Technorati, http//www.sifry.com/alerts/ar
chives/000443.html
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The Rise of UCC
Source Technorati, http//www.sifry.com/alerts/ar
chives/000443.html
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The Rise of UCC
Photo
Wikis
Video
Podcasts
Source Alexa, March 11, 2007
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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

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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
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Business Models

• USERS

PLATFORM

• Ad-Supported
• Direct Payment
• Sponsorships
• Donations
• Reputation Builder

• Ad-Supported
• Versioning
• Complementary Products
• Revenue Sharing

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Advertising Supported

• Popular bloggers / podcasters can have direct
  relationships with advertisers, sponsors.

• Long tail users can use third-party tools to get
  ads.

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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)

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Sponsorships / Contests

• Jumpcut runs a trailer mashup contest for the
  movie A Scanner Darkly (prize movie premiere
  tickets video editing PC)

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Reputation Builder

• Rocketboom

lonelygirl15

• Appeared on the Jay Leno show and the cover of
  Wired magazine

• Rocketbooms offer to do ads for companies
  fetched 40K in an auction

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Versioning
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Complementary Products
FREE
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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

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Issues with Monetization of User Created Content
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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

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Concerns within Ecosystem

• Competitors
• Need critical mass
• Quality of Content
• One Hit Wonder
• Lack of Content Exclusivity

• Complementors
• Merchandizing (unpredictable)
• ISP (network neutrality)
• Integration of products

• Winner takes all in most media
• Low switching costs shift the competitive
  advantage to technology (search, brand
  advertising) and critical mass

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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

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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

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Revenue Models That Work

• Advertising
• Versioning
• Complementary Products
• Reputation Builder

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QA

• Users

Platform

• Ad-Supported
• Sponsorship
• Direct Payment
• Donations
• Reputation Builder

• Ad-Supported
• Versioning
• Revenue Sharing
• Complementary Products