Monday, December 17, 2007

User-Generated Content Still a Minority Pursuit

DECEMBER 17, 2007

Home movies take a back seat to Hollywood.

Nearly two-thirds of consumers surveyed who watch video on their computers, mobile devices or digital media players are watching professionally-produced TV programming, according to ChoiceStream's "2007 Survey of Viewer Trends in TV & Online Video," conducted by MarketTools.

Choicestream said that the percentage of pro content would increase over the next six months.

Although this could be interpreted as a sign that user-generated content is on the wane, the research company said that traditional TV watchers were simply learning to shift their viewing towards other devices.

Annual US revenues from Internet video services, including user-generated content, will exceed $7 billion by 2010, according to Parks Associates' "Internet Video: Direct-to-Consumer Services" report.

In 2007, approximately 85% of the revenues will derive from advertisements attached to user-generated content and TV and news streams. But by 2010, Parks estimates that fees for renting and downloading TV shows and movies will account for nearly 40% of total revenues.

In general, viewers of user-generated content have a low threshold for ad support, reasoning that if the videos are not professionally created they should not need to be supported by commercials.

This finding is reflected in a January 2007 Harris Poll survey of adult YouTube watchers, 73% of whom said they would visit the site less if a short commercial accompanied every video clip. Only 21% of respondents said their frequency of YouTube visits would be unaffected by the presence of advertising alongside the videos.

Considering these statistics, it is hardly surprising that YouTube has been cautious about introducing ads on all its content.

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