Already a Bloomberg.com user?
Sign in with the same account.
As more professionally produced content finds a home online, user-generated video becomes less alluring to viewers—and advertisers
Amateur filmmakers hoping to win fame for amusing moments captured on camcorder ought to stick to TV's long-running America's Funniest Home Videos. These days they're not getting much love on the Web.
One after another, online video sites that have long showcased such fare as skateboarding dogs and beer-drenched parties are scaling back their focus on user-generated clips, often in favor of professionally produced programming. "People would rather watch content that has production value than watch their neighbors in the garage," says Matt Sanchez, co-founder and chief executive of VideoEgg, a company that provides Web video tools, ads, and advertising features for online video providers and Web application developers.
On Nov. 13 social networking site Bebo said it would open its pages to top media companies in hopes of luring and engaging viewers. "As more and more interesting content from major media brands becomes available, [online viewers] are going to share that more and more because those are the brands they identify with," says Bebo President Joanna Shields.
Another site, ManiaTV, recently canceled its user-generated channels altogether (BusinessWeek.com, 10/22/07). The 3,000 user-generated channels simply didn't pull in enough viewers, ManiaTV CEO Peter Hoskins says. Roughly 80% of people were watching the professional content produced by celebrities such as musician Dave Navarro and comedian Tom Green. "What we found out is, we don't need the classical user-generated talent when we have the Hollywood talent that wants to work with us," Hoskins says. Sony's (SNE) Grouper in July relaunched as Crackle, sans user-generated content. Its only fare: professional-grade programming.
News Clips Are No. 1
There's no question that Web surfers want to watch video online. Over 57% of U.S. Internet users say they have watched or downloaded online videos, according to a July study by the Pew Internet & American Life Project. But they're not flocking to home videos. According to the study, viewers are most interested in news videos, followed by comedy bits and television shows. Research by Burst Media, an Internet ad network that studies the video market, echoed the findings, ranking news clips, movie trailers, comedy sketches, music videos, and TV shows as the top categories. The category that includes clips produced by users placed ninth out of 11.
Hollywood is flooding the Web with slick new shows produced specifically for the Net. Over the past 12 months, writers, actors, and entertainment studios have embraced the medium as never before, creating original made-for-the-Web series and distributing television shows along with behind-the-scenes content and DVD-like extras. Online content is getting added attention as the Hollywood writers' strike leaves TV awash in repeats and reality shows.
On Nov. 11, News Corp.'s (NWS) MySpace added Quarterlife, a show created by the team behind My So-Called Life, to a long lineup that includes Web original Prom Queen, produced by former Disney (DIS) head Michael Eisner's Vuguru studio. Bebo's made-for-Web programs include KateModern, a show set in East London that focuses on a troubled art student, produced by the team behind Lonelygirl15. And there's always a variety of original sketches from well-known movie and television actors showing on Funny or Die, launched by actor Will Ferrell and pals in April.
An Explosion of Options
Such programming comes in addition to the raft of television shows and online outtakes now playing on sites such as NBC and News Corp.'s Hulu, Yahoo (YHOO) video, Time Warner's (TWX) AOL, and the networks' own Web destinations (BusinessWeek.com, 10/11/06). "A year ago, if you did a search for a professional video, you would be able to watch a clip or a bad pirated version," says Suranga Chandratillake, CEO of video search site Blinkx. "Now you are able to watch a real show."
Why is Hollywood warming to the Web? "For some people this is a different creative outlet," says Jeff Berman, MySpaceTV's general manager. "For others it is about having creative control. Others look at it as a new revenue stream." As video sites move from the grabbing-traffic stage to the making-money stage, they need to attract advertisers. And advertisers have been slow to embrace amateur video, particularly when there is so much content available backed by television and movie studios. "Advertisers are a bit more reluctant to trust the user-generated stuff.… They feel better aligned with the professional stuff, and that is driving a lot of these changes," says Burst CEO Jarvis Coffin.
Professional content grabs significantly more money. Blinkx's Chandratillake says advertisers will pay $60-plus per 1,000 views to incorporate their ads alongside professional video content. They'll pay around $7 to associate with user-generated videos, depending on the piece. And some brands have shunned user-generated video outright for fear of being unwittingly associated with videos that make their brands look bad.
Improve the Quality
The shift in audience attention to professionally produced video content is not indicative of a wholesale abandonment of user-generated content. Web surfers are spending more time on blogs, friend pages on social networks, and their own personal sites than ever before. MySpace still tops the charts for where users spend their time online. It's easier to blur the lines between, say, professional news and the musings of a nonjournalist than it is to confuse a home video for a big-budget film clip or TV show. And sites such as Wikipedia, the community-edited encyclopedia, are more popular than their professionally produced competitors ever were.
Nor does the growth of professional content spell the death of user-generated video. After all, some user-generated videos can be of comparable quality to fare produced by pros. Take the comedy show We Need Girlfriends. It got as many as 700,000 views per episode on YouTube and was picked up by CBS (CBS) and Sony Pictures Television this month.
But to stay relevant, non-pros will have to step up the quality. And even when they do, the mix of user-generated video and professional content is likely to look very different in a couple of years. VideoEgg's Sanchez sees it changing from a landscape dominated by user-generated video to one where the most watched content is largely professionally produced. "The user will still be on the playlist," Sanchez says. But "it will be 10% to 15% of consumption, not 60% of consumption."