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Managing User-Generated Content: Before You Buy Content, Read This!

Figure 1: General Sentiments Towards Reality, Awards Genres
(Wordcount: 706; Pages: 2) Why an organization as daft as News Corp would pay so much for what seemed to be a fad didn't immediately add up. But since that purchase, we've learned two things for certain: You really can build a business with the sole expectation that Google will buy it and News has once again demonstrated that they can still come up with risky and profitable new ways of making money in media: selling the opportunity to consolidate larger audiences online (without violating anti-trust laws). In other words, News wasn't after the MySpace audience to sell ads to it. They were, in fact, seeking their audience to rent it out to the highest bidder, and let that bidder sell ads to that audience.

No slouch itself in the audience-aggregation business for the purpose of selling ads, this new concept puts News in the unique place of doing nothing more than allowing visitors to its websites continue to put fresh content on its servers (no cost of editorial), while simultaneously not needing to invest in its adsales machine (no cost of publishing), and still make huge gobs of cash. A brilliant lesson in managing user-generated content businesses.

Long before the phrase "user-generated content" was coined, other formats have all slowly and evidently pushed audiences - inexorably trained by competition to be tuned into 24-hour media cycles - to actually be engrossed 24 hours a day not just on their terms, but on a level of involvement that can no longer be packaged in the same way to make money. Examples of these formats include sports programming that featured everyone's hometown hero; news with live reporters interviewing spotlight-craving bystanders; game shows that allow audiences to play along; awards shows with unexpected and sometimes unscripted occurrences; of course, reality shows that pushed so far as to become unrealistic; and now interactive competitions where audiences can vote for their favorite entertainers

Indeed, in a recent analysis of a 11-week online marketing campaign for a cable network, we discovered 71% of responders had positive sentiments towards reality and awards genres (Figure 1) because of a friendly brand and friendlier characters (together accounting for over 72% of the reasons for these positive sentiments). Conversely, a majority of 23% claimed they didn't like these genres because of the characters' performances or acting.

Make no mistake, the business of creating-content-to-draw-an-audience has changed. Nielsen recently announced that Americans spend over 8 hours every day watching television, (likely thanks to cheap production of their own videos and the convenience of TiVo and iPods). (1) Newspapers are discovering that their content must be all inclusive online, inclusive of video and feedback features, in order to build their brands and make them valuable to advertisers. (2). And if you're looking for investor cash to start a media business, you are virtually guaranteed the money as long as you play up your web plan's intentions to use free interns to solicit free content - bad credit, no problem.

As a business, media has been so preoccupied with creative and distribution, that they've overlooked that creativity is subjective and the cost of distribution diminishing. And this trend will continue, not abate, as technology decreases in price, broadband gets broader, and production know-how becomes as common as using the phone, all trends that have been reliably predicted and are on schedule to occur. Media companies will wake up one day to realize that everyone had something to say to the world, and indeed, they're saying it, breaking all the established rules along the way. (Consider Tila Tequila, the MySpace girl; Korey Rowe, the "Loose Change" boy; or Google, the current "it" company, all of which achieved powerful voices and huge audiences on their terms without the support of big media.)

Understand that the fascination with user-generated content isn't just the opportunity to see something new, something different, or something unexpected, but also something that sticks to cultural precedent of fighting hard against the big guy. We can agree that the invention of Napster turned on this switch of consumers to their newfound power, and like any underdog fighting a fight they believe just for no other reason than it's against a bigger and stronger opponent, it's nearly impossible to take that power away.


(1) Nielsen Media Research Reports Television's Popularity Is Still Growing

(2) Who killed the newspaper?, from the August 24th, Economist magazine

Al Berrios is Managing Director of al berrios & co., an innovative strategy consulting firm advising leaders on the impact of human behavior on their strategies and on how to change their organizations to address the behavior. Write to Consumer Strategies Report at editor @ alberrios.com.


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