There is a widespread retreat from user generated content
Sarah Lacy feels that many sites are pulling away from user generated content and switching, instead, to professional work:
As the wet blanket of recession has settled around the Valley and startups have come under pressure to monetize what they’ve built, I’ve wondered when we’d see the same flight to subscriptions and fees. Instead we’re starting to see something similar but with a Web 2.0 twist: The rejection of user generated content in favor of professional content that’s more consistent, reliable and palatable to advertisers.
This is bold shift, as the whole Web 2.0 movement was predicated on user generated content and the engineer-centric idea that you could build an easy to use platform, everyday people would create content for free, and other everyday people would navigate it, consume it and push the very best up to the top. It was rooted in the conviction that you didn’t need the kind of doomed content partnerships of the past between New York, Los Angeles and Silicon Valley, because Web 2.0 was democratizing media and entertainment and ultimately that platform was the future, not the content gatekeepers.
I’ve been telling my clients something similar for a little over a year, so it is nice to get some validation. Of course, my clients don’t have the budgets to do deals with the major media conglomerates, but I advised them to hire either professional writers or the semi-pro bloggers who’d already proven themselves with their own successful blogs. This kind of writing is more reliable, and generates more traffic, than user generated content.
It is worth noting that all of my serious clients (clients with budgets in excess of $50,000) for the last year have been mostly focused on the idea of building a site around video. So I will certainly send this post to them, and I will emphasize this portion of it:
This was clearly the most pronounced on YouTube, where the viral sensations like the Evolution of the Dance and the Grape Lady (ow! ow! owwwwww!) became the lexicon of an entire generation and the myth sprung up that everyday stars of viral videos would become household names with their own movies and HBO shows. (They never did.)
Nevertheless, this is the dream that motivates nearly all of the potential clients who’ve come to talk to me during the last year: the celebrities of tomorrow are building their careers, right now, on video sites like YouTube.
I am skeptical of video on the web. Video is very expensive, compared to text. A site like Blogger is relatively cheap to set up. A site that did the same thing for video has to deal with very high bandwidth costs, right from the start. And the cost of producing video is much higher than the cost of writing text.
Over the last 7 years, I have worked on a number of music sites, such as AudioLunchbox and monkeyclaus. I actually lived at the monkeyclaus music studios for awhile, and I met every band that came through there. Having spent so much time around the entrepreneurs that want to be in the music industry, I’ve learned that the music industry attracts an irrational level of investment. The reason for this is simple: the music industry is glamorous, and the musicians are attractive (I don’t mean “attractive” in the simple, physical sense, though that is sometimes also the case. I mean “attractive” in a broader sense – people engaged in an activity that is glamorous, or who seem to be close to fame, are endowed with attractiveness due to all kinds of complicated cultural factors.)
I can not believe that a rational investor would wake up one morning in early 2009 and say to themselves “I think what the world needs is another music web site.” There are already millions of music web sites, some quite innovative. Only the glamor of the field can explain the interest the industry continues to get from investors.
Investment on video sites now seems to be following the pattern I’ve seen for music sites. My clients seem to want to get into this industry for reasons other than what a rational investor might be able to articulate. The glamor, the possibility of fame, is drawing irrational levels of investment.
I wrote “How much do websites cost?” as a sort of warning to potential clients. I was serious when I wrote that some potential clients have described their business plan in these terms: “We’re going to be an agency that puts ads into videos and we’re also going to be funding new video artists with our ad money, because we believe in the possibilities of nurturing these new talents, and we’re going to be an aggregator that accumulates the best new talent in video and our software will offer unique technology to advertisers, such as the ability to keep track of exactly how long each viewer watches each ad.”
The problem is that most of my clients seem to think that their ideas are entirely unique, when, in fact, they are each talking to me about business plans that are nearly carbon copies of each other. (Perhaps the most important part of my work lately has been to help clients come up with a business plan that is really unique.)
I do think, eventually, some real celebrities will emerge from the online world. I do think eventually you’ll have video properties that make huge profits just from their online exposure. But I think that day is still many years off. Back in 1995, people wondered if the web represented a threat to newspapers, and it turned out the day of reckoning was 13 years in the future.
(A bit off-topic: I only discovered Sarah Lacy’s blog a month ago, but I find her stuff especially relevant to my clients, even more than the articles at TechCrunch. In fact, during the last month, I think I’ve pointed my clients to 3 of her posts, whereas I’ve only shared two TechCrunch pieces with clients.)