Web Video: Move Over, Amateurs

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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."

Holahan is a writer for BusinessWeek.com in New York .