aTypical Joe: a gay New Yorker living in the rural South
Tuesday, June 26, 2007
Bear Sterns: User Generated Content is not a fad
User-Generated Content (UGC) Is Not a Fad . . .
Some investors remain skeptical that UGC is more than a passing fad. However, in our recent online video survey, UGC is the No. 1 and No. 2 most popular content category among men aged 18-34 (M18-34) and among all respondents, respectively. Moreover, if we define UGC as page views only from sites such as Myspace.com, Facebook.com, Youtube.com, Wikipedia.org, Blogger.com, and Digg.com (which is quite conservative), we estimate that UGC now accounts for 13% of total U.S. Internet traffic, up from 0%-1% in 2004. Based on these statistics, we submit that UGC is here to stay.
. . . And It Can Be Monetized
Another investor concern is whether UGC can actually be monetized. We believe the answer is “yes.” From a historical perspective, we note that much of the text-based UGC (like blogs and social networks) has been monetized through paid search. In a video-centric broadband world, we think targeted video advertisement could be one monetization mechanism. Our primary market research finds over one-third of respondents have no major complaints about pre-roll video ads, while only 10% of respondents stated that a ten- to 15-second commercial was too long to watch before the video.
They go on to address the “content is king” media mantra:
[F]or as long as most can recall, the entertainment industry has lived by the axiom “content is king.” However, no one company has proven consistently capable of producing “great content,” as evidenced by volatility in TV ratings and box office per film for movie studios, given the inherent fickleness of consumer demand for entertainment goods.
Via Chris Anderson, “Bear Stearns believes (as do I; indeed a third of my book is focused on this) that in a world of infinite choice, content is only as valuable as your ability to find it. They call that “context and aggregation”, and it’s what both Google and your favorite blogger do when the filter the web according to a narrow lens, be it your expressed search term or their own sensibility.”
