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Business Models For User Created Content

Business Models For User Created Content. David Chu Alex Dailey Thomas Goerner. Kevin Lim Wojtek Poppe Richie Teo. Introduction:. “Why should I even care about User Created Content?”. Higher bandwidth penetration. Lower bandwidth costs. Lower storage costs. The Rise of UCC.

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Business Models For User Created Content

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  1. Business Models For User Created Content David Chu Alex Dailey Thomas Goerner Kevin Lim Wojtek Poppe Richie Teo

  2. Introduction: “Why should I even care about User Created Content?”

  3. Higher bandwidth penetration Lower bandwidth costs Lower storage costs The Rise of UCC Source: Technorati, http://www.sifry.com/alerts/archives/000443.html

  4. The Rise of UCC Source: Technorati, http://www.sifry.com/alerts/archives/000443.html

  5. The Rise of UCC Photo Wikis Video Podcasts Source: Alexa, March 11, 2007

  6. UCC Paradigm Change The user is both the producer and consumer • Control over content is relinquished • Differentiation based on platform technology and critical mass • Aggregators (content and advertising) bifurcate content distribution

  7. Business Models: “Can I make money by creating videos, writing blogs?” – average Joe user “Is it profitable to be giving away all this free storage and functionality?” – UCC provider

  8. Business Models USERS PLATFORM • Ad-Supported • Direct Payment • Sponsorships • Donations • Reputation Builder • Ad-Supported • Versioning • Complementary Products • Revenue Sharing

  9. TechCrunch makes $120K a month from ad-sponsors. sponsors married punk-rocker’s podcast. “Diet Coke and Mentos” user makes $30K provides ads for the average long-tail blog Advertising Supported • Popular bloggers / podcasters can have direct relationships with advertisers, sponsors. • Long tail users can use third-party tools to get ads.

  10. Direct Payment • Advertisers pay bloggers directly to write reviews about their products (by using marketplaces like PayPerPost): $3-$100 • allows users to set prices for viewing videos (one-time, subscription)

  11. Sponsorships / Contests • Jumpcut runs a “trailer mashup” contest for the movie A Scanner Darkly (prize: movie premiere tickets + video editing PC)

  12. Reputation Builder Rocketboom lonelygirl15 • Rocketboom’s offer to do ads for companies fetched $40K in an auction • Appeared on the Jay Leno show and the cover of Wired magazine

  13. Basic: Free Pro: $24.95 Basic: Free Plus: Free w/ ads Paid: $19.99 Versioning

  14. $19.99 $9.99 $18.99 $19.99 PAID Complementary Products FREE

  15. Revenue Sharing • VOX allows users to get book and CD images directly from Amazon. When readers click and purchase these items, VOX gets 7% rev. share

  16. Issues with Monetization of User Created Content

  17. Concerns within Ecosystem • Platform • Lack of control over content • Faced with low switching costs • Little IP protection • Little opportunities for differentiation • First mover • Lack of control over viewers / producers • Producers • Danger of being bootlegged • Rise above the clutter • Unclear how to integrate • professional content • Consumers • Find the good stuff among • ho-hum content • Little platform affinity • Low willingness to pay • Hype Factor

  18. Advertisers • Sponsorship necessitates • critical mass • Lack of aggregators which • cover all UCC types • Content Relevance • PR • Long term viability • of engagements • Lack of metrics Concerns within Ecosystem • Competitors • Need critical mass • Quality of Content • One Hit Wonder • Lack of Content Exclusivity • Complementors • Merchandizing (unpredictable) • ISP (network neutrality) • Integration of products • “Winner takes all” in most media • Low switching costs shift the competitive advantage to technology (search, brand advertising) and critical mass

  19. Requirements for Sustainability • Extract signal from noise • Traditional Solution: Content producers • User-Driven Solution: Meta-tagging of non-traditional content • Technological Solution: Analytics-based recommendation systems • Metrics • needed to measure efficacy of ad campaigns

  20. Requirements for Sustainability • Ad brokers which deal with all UCC types • Ability to build brand equity and not just drive purchases • “Online brand advertising is young, and is where future growth will be.” - DB Analyst Report

  21. Revenue Models That Work • Advertising • Versioning • Complementary Products • Reputation Builder

  22. Q&A Users Platform • Ad-Supported • Sponsorship • Direct Payment • Donations • Reputation Builder • Ad-Supported • Versioning • Revenue Sharing • Complementary Products

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