The Monetization of User-Generated Content

So, YouTube’s going to start sharing the wealth, eh? I guess it’s easy to feel generous after you’ve pocked $1.65-billion from Google, and never have to work again. There’s lot of chatter about why YouTube is doing it (check out Scott Karp and Nick Carr for a small taste) but the bigger and far more interesting development is how the user-generated content industry is starting to become a business as opposed to a hobby/brand building/ranting/ego massaging exercise.

As Scott Karp makes clear, more people want to get paid for the content they produce (and we’re not talking about link love, trackbacks, RSS subscriptions and traffic). We’re talking dollars and cents (but mostly dollars given people are tired of getting cents from AdSense). Does this mark the beginning of the end of the user-generated content revolution that has seen millions of people offer their insight, knowledge and skills for free or next to nothing. Probably not but it does indicate the USG market is already starting to evolve as content producers are saying “show me the money”, while distributors (YouTube, Revver, etc.) look to embrace different ways to monetize their traffic to turn a cool, popular service into a business.

In theory, the concept of getting paid could be a could thing for USG because it could encourage people to create better content - if you believe in the concept this work will be more popular and, as a result, more lucrative. It’s content capitalism at work. Perhaps an ancillary benefit will be a consolidation of the USG industry as people who want to be paid but get nothing or little for their efforts decide to move on to other things.
Update: As much as money is coming into the user-generated content world, ego still plays a huge role in why people blog. Exhibit one is Robert Scoble, who detonated a flurry of discussion within the blogosphere after having a digital temper tantrum because after Engadget declined to link to a video story he did on new technology from Intel. Scoble’s not into blogging to make money (although it has jump-started his career in a major way) but his disappointment over the lack of links shows he’s got a healthy ego and his blog is part of that equation.

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  • Eric

    I am sure that a lot of people will look for content distributors willing to pay them for their work, but this could have the inpact of making this content biassed to the company signing the checks and become just like any other, traditional content distribution machine… looking to make some $$ and being very hardlined about the copyrights.

    To me the appeal of USG is that it seems to have a life of its own, and is being generated by people who mostly want to share their point of view with the world.

    I think this aproach of paying for content could be usefull, but needs to be looked at carefully, because this could burst a very good bubble that has been built up over the years for USG.

  • Anonymous

    I find half of what makes user generated content so appealing is that it is home made and from the average joe. If you start paying for content and making so called “better content” what do you have? You have studio type production of videos and not the home made stuff from before.

    On the web there is a ton of this better quality video…. its called movie trailers or short film or clever commercials (mac commercials for instance). I find the appeal in Youtube because its some person somewhere saying “What if I put mentos in some pop?” or “Who is this person and why are they doing this?” Not the video that reads “oh… another video from company XYZ trying to sell me on some high budget refined video piece with some monetary goal.”

    Now the only video series I have seen on Youtube that really does attempt to sell a product and yet keep that home made feel is those “Will it blend?” blendtech videos where he throws crap into the blender to show how powerful it is and to be entertaining. Even that still has some home made touch to it since it looks like it costs a blender and a man’s time for each video.

    If they attempt to commercialize content to make a buck on there, the average person will be tempted to go elsewhere.

  • Aaron

    Yes, but only after Scoble threw his hissy fits did he admit that Intel is a “client” of his.

    Only Robert seems to know the difference between a “sponsor” and a “client,” but it’s easy to tell what to call it now: “conflict of interest.”

    Is he a tech vlogger or a PR flack? Apparently Scoble thinks you can play both sides.

  • Mark Evans

    It would be a shame if money started to affect peoples’ enthusiasm to create their own content, which has been one of the Web’s most interesting features over the past couple of years. Personally, I think they money will have a minimal impact because the Web – at least for now – is about the “average joe” having the ability to tap a huge distribution network as opposed to making a few bucks.