How far will consumer-generated media go?

The AlwaysOn conference kicked off last night and is now in full flow with a panel about the future of user generated content. Chad Hurley of YouTube, Michael Arrieta of Sony Pictures, Dave Goldberg of Yahoo Music and Michael Robertson of MP3Tunes (now SIPPhone, I think) are discussing how far consumer-generated media will go.

The panel feels that a mix of user-generated content (UGC) and professional content will become the normal model for video sharing sites. There is concern about the level of protection the DMCA can provide over YouTube’s ability to continue showing pirated content. YouTube is protected by the DMCA at present since its users are uploading the content themselves. Nominally this means that YT is not responsible for the content it hosts, but most of the traffic comes from visitors wanting to access copyright content. The panel actually feels this has helped the online TV industry when compared to the music industry (Michael Robertson was sued for distribution of copyright music) since it is forcing Hollywood to collaborate with these services, rather than litigate with them.

Note, when we talk about UGC, we’re mainly talking about videos and photos rather than music (karaoke, lipsyncing and amateur bands are less interesting).

Digital Rights Management (DRM) is a hot topic. The DRM is required by the copyright owners but it’s of no value to consumers or the artists per se. How the studios manage DRM will be interesting. Much of the copyright content is available in the wild without DRM wrappers, so legitimate buyers are almost penalized by the restrictions DRM places on them. Unless the DRM becomes transparent and less intrusive the temptation to access non-protected content will remain (or to stick with traditional channels).

Chad Hurley confirmed that YT is not profitable but is still planing an advertising model for both UGC and for professional content. That said, he’s not predicting their users to want feature-length content like movies but to have a clip-culture. At the moment, YT is only considering banners and sponsorships rather than bumpered ads or video ad inserts. These don’t work with clip-length content – who’d want a 30 second ad before a 3 minute video? Yahoo says that it does work with professional music videos which are slightly longer and has Pepsi and Toyota advertising in this manner online. Consumers are comfortable with the fact that music has a value and that someone needs to pay for online music videos.

Michael Arrieta feels consumers still struggle with online video ads and they are experimenting with 5, 10, 15 second formats rather than a straight 30. They’re uncertain which will be best received and most efficient.

YT is serving 100m videos on a daily basis, with 65,000 uploads – that’s a lot of content. Chad claims that ‘ads are content’ which is a nice thought but many of them are not entertaining or engaging. Ads must be interesting and targeted if they are to succeed but of course statistically many are merely average, the panel countered.

Sony is interested in combining its professional content with UGC. Examples might be trailer mash-ups, additional scenes, DVD-value-adds, and even pilot shows made by users. They hope to find new creativity and innovation here like the Snakes on a plane trailer mash-up. There is some skepticism about whether this will work since with trailers, the content has already been professionally created, says Michael Robertson.

The panel was moderated by Kara Swisher of D: All Things Digital.

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