business models for user created content david chu alex dailey thomas goerner kevin lim wojtek poppe...
Post on 21-Dec-2015
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Business Models For User Created ContentDavid ChuAlex DaileyThomas Goerner
Kevin LimWojtek PoppeRichie Teo
Introduction:“Why should I even care about User Created Content?”
The Rise of UCC
Lower bandwidth costs
Lower storage costs
Higher bandwidth penetration
Source: Technorati, http://www.sifry.com/alerts/archives/000443.html
The Rise of UCC
Source: Technorati, http://www.sifry.com/alerts/archives/000443.html
The Rise of UCC
Photo
Video
Wikis
Podcasts
Source: Alexa, March 11, 2007
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
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
Business Models
USERS PLATFORM
• Ad-Supported• Direct Payment• Sponsorships• Donations• Reputation
Builder
• Ad-Supported• Versioning• Complementar
y Products• Revenue
Sharing
Advertising Supported
TechCrunch makes $120K a month from ad-sponsors.
• Popular bloggers / podcasters can have direct relationships with advertisers, sponsors.
sponsors married punk-rocker’s podcast.
“Diet Coke and Mentos” user makes $30K
provides ads for the average long-tail blog
• Long tail users can use third-party tools to get ads.
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)
• Jumpcut runs a “trailer mashup” contest for
the movie A Scanner Darkly (prize: movie premiere tickets + video editing PC)
Sponsorships / Contests
Reputation Builder
• Appeared on the Jay Leno show and the cover of Wired magazine
• Rocketboom’s offer to do ads for companies fetched $40K in an auction
Rocketboom lonelygirl15
Versioning
Basic: Free
Pro: $24.95
Basic: Free
Paid: $19.99
Plus: Free w/ ads
Complementary Products
FREE PAID
$19.99
$18.99
$19.99
$9.99
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
Issues with Monetization of User Created Content
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
Concerns within Ecosystem
• “Winner takes all” in most media• Low switching costs shift the competitive
advantage to technology (search, brand advertising) and critical mass
Competitors• Need critical mass• Quality of Content• One Hit Wonder• Lack of Content Exclusivity
Complementors• Merchandizing (unpredictable)• ISP (network neutrality)• Integration of products
Advertisers• Sponsorship necessitates critical mass • Lack of aggregators which cover all UCC types• Content Relevance
• PR• Long term viability of engagements• Lack of metrics
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
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
Revenue Models That Work
• Advertising
• Versioning
• Complementary Products
• Reputation Builder
Q&AUsers Platform
• Ad-Supported• Sponsorship• Direct Payment• Donations• Reputation
Builder
• Ad-Supported• Versioning• Revenue
Sharing• Complementar
y Products