User Generated Video Bubble Needs To Pop, And Soon

The entire market for user generated content, in particular video, has just gotten completely out of hand. I must get 2-3 releases a week now from new UGC sites that are launching, yet none of them say anything about their business models. They all talk to how their player is different, their video looks better, their search capability is improved or some other aspect of the user experience.

What about the business model? Where is it? By my last count, there were over 60 UGC sites on the web that I am tracking, the majority of which I have no idea how one differs from the other. Yes, some of them are more focused than others and provide content for just one vertical like comedy, or independent films, but still, there are too many of them. It is only a matter of time before this UGC bubble bursts and these sits consolidate or disappear completely.

Mediaweek published an article yesterday about ManiaTV and how they are shifting their business model away from UGC to focus solely on original content. Will it help? Too early to know, but I give ManiaTV credit for realizing that much of UGC is purely hype. ManiaTV’s chief marketing officer Peter Clemente said it best in the Mediaweek article, "Hype doesn’t necessarily equate to profitability."

  • The problem with the phrase “User-Generated Content” is that it wraps together purely amateur video, your family ski videos, semi-pro, and the emerging new community of creators who are part of an new ecosystem of media makers.
    The idea that ‘premium’ content will come from the current sources of video just doesn’t reflect the changing impact of both bandwidth and technology on media creation. TV networks have historically not made content that we considered ‘quality’ (The “A” Team, Charlies Angels, Deal or No Deal) – what they’ve had was a super powerful distribution network with local stations and a national schedule that provided a powerful launch pad.
    Now that’s been ‘exploded’ and so UGV/UGC is being thrown around as the future of media. But it’s really more about micro-media, than amateur media. So a new class of producers is emerging, and within that class there is some very high quality material that speaks to audience with passion, authority, and conviction. This is a good thing. Its good for consumers, it’s good for new makers, and its good for technology providers.
    The shift moves the power from the owner of the network, to the creator of the most compelling content. And that’s going to be important for all of us.

  • I think of UGC as America’s Funniest Home Videos writ large on the Internet…yes it’s a market, but it’s not a boundless one.
    The opportunity will be using online video to serve narrower marketplaces.
    In the 80s we moved from the Big Three to “crazy ideas” like all sports and all news channels, a big leap. Now the Internet can serve up even more finely granulated content for niche markets.
    If UGC means random junk posted by kids then there’s not much of a future there, but if UGC means worthwhile 3 minute videos targeted to very specific niches and created for $500 or less then there’s a boundless future.
    It’ll be like the specialty magazine business. As long as an audience can be gathered and monetized, there will be an Internet TV channel for it some day.
    But this an opporunity for micro-enterprises and small business. It makes no sense for VCs to be bankrollng generic “me too” YouTube clones. That bursting bubble is long overdue, but it won’t happen until there is another 2000-style liquidity crisis in the financial markets. (Might not be far off.)

  • Good observation. The UGC bubble is not unlike the Geocities/Tripod/Angelfire user generated pages bubble of the 90s. Lots of pages, lots of uniques, no real business model.
    An editorial function is needed to sift through the tremendous amount of chaff to find the wheat.