Quest for Cash from User Generated Content

While user-generated video sites’ ad revenues are projected to grow from $200m last year, to $875 million by 2010, this will only account for 15 percent of total online video advertising budgets, says Screen Digest in its latest report “User-generated online video: Competitive review and market outlook”.

"It is the nature of content itself. How do you monetise free content? That is the core debate," Arash Amel, a Screen Digest analyst who wrote the report, told Reuters.

"No one has found a way to make real money from the huge audiences who participate on these sites," he added.

Whether or not big advertisers are willing to put their brands alongside jerky images of users playing up to the camera, or whether they will seamlessly integrate their own in-house video content, remains to be seen.

According to FT.com, Peter Chernin, News Corp. president, said at a recent conference, “We do not see big advertisers advertising with YouTube or MySpace. They have concerns about the content ... and there is no scarcity value for the content ... so there is very little ability to monetise video advertising on user-generated video.”

Perhaps more importantly, how can it be done without annoying a hue audience that dislikes big companies cashing in on their “space”?

Sites which are diversifying the way in which user-generated offerings are used in advertising, such as Revver.com, may be the answer. Revver.com shares ad revenue with the user who originally generated the content and with anyone who shares the video.

Tags: MySpace, online advertising revenue, Revver.com, user-generated, video advertising, YouTube