Can User-Generated Content Generate Revenue?APRIL 17, 2008
“Show me the money!”
The user-generated content movement is no longer a fad.
In the US, eMarketer projects that the number of user-generated content creators will rise from 77 million in 2007 to 108 million in 2012.
The content is being read, seen and heard, too.
The number of consumers of user-generated content will increase from 94 million in 2007 to 130 million in 2012.
“US Internet users are creating and consuming user-generated content in record numbers,” says Paul Verna, eMarketer Senior Analyst and author of the new report, User-Generated Content: In Pursuit of Ad Dollars, “across an ever-expanding range of online content that includes video, audio, personal profiles, avatars, photo sharing, Wiki entries and product reviews.”
Beyond written blogs, established media outlets like CNN and MSNBC, as well as startups like video aggregator YouNewsTV, are empowering consumers to submit video clips and still images of unfolding events.
“Since many of the growing numbers of Internet users creating social media are also consuming it, this is a content chain that feeds on itself,” says Mr. Verna. “There is a seemingly infinite demand for content, and there are legions of Internet users armed with laptops, cell phones and digital cameras ready to deliver.”
So the content is there, but is it accompanied by a viable revenue model?
”Advertising revenues against user-generated content are modest,” says Mr. Verna,” and they are expected to stay that way for some time.”
Or, as Andrew Keen, author of Cult of the Amateur, said in a Newsweek interview, “Nobody wants to advertise next to crap.”
"Given the size and level of engagement of the audience, advertising revenues around user-generated content will not approach the level one might expect,” says Mr. Verna.
Nevertheless, eMarketer anticipates US user-generated content advertising revenue will reach $824 million in 2012, up from $162 million in 2007.