• by February 26, 2007

Increasingly, consumers are aiding and abetting the melding of communication, community, and entertainment in a trend dubbed "communitainment" in a new report from Piper Jaffray.

In the 425-page report entitled "The User Revolution," the investment bank describes the emergence of "communitainment," a trend involving consumers moving communication beyond a mere exchange of information to facilitate an exchange of content, ideas, and entertainment within an online social context.

As Internet consumption continues to steal time spent with other media, advertisers need to learn how to tap into online communities to reinforce their brands.

"Communitainment" is a type of content consumption that is new to the Internet, says report author Safa Rashtchy, who researched developments supporting the phenomenon for nearly two years. Rashtchy is managing director/senior analyst of the investment bank's Internet Media, Commerce and Marketing practice.

The report suggests that "Communitainment" will at least partially replace other forms of content--i.e., TV, magazines, and even big Internet sites in favor of niche content sites.

Piper Jaffray projects that one-half of all content consumption will be "Communitainment" over the next decade driven by IM, social networking, photo and video-sharing sites--up from around 30% in 2006.

As entertainment platforms, social networking sites like MySpace have enabled millions of people to share their favorite activities, content, gossip, and hobbies--and in general, to promote free expression.

"IM has become more mobile, mobile devices are providing IM ... It was obvious [to me] that people are spending a lot of time on what previously was called communication and social networking. The conventional wisdom was that this was because young people like to interact with one another. This is entertainment for them ... they talk and exchange ideas," Rashtchy said.

"Communitainment" and time spent on the Internet and on so-called Usites such as YouTube, Heavy.com, Facebook, Yahoo Answers, Google Video, and MySpace has radically redefined content consumption patterns, in the process "creating confusion for advertisers and agencies alike. In a way, we believe Usites are the Internet's democraticized version of the reality TV trend with users placed in control of content creation," the report states.

The implications of "Communitainment" are profound.

"Not only are these consumers not available to see commercial messages from other [media] channels," Rashtchy said, "but they're also heavily engaged in activity that they would not like to be distracted from by commercial messages."

When consumers watch TV, he observed, there remains an unwritten contract that they get commercials in exchange for free programming. Of course, this contract is subverted on a daily basis by DVRs.

With "Communitainment," Rashtchy noted, "there is no such contract available. Content is created and shared by users. It's a closed system and advertisers have to find a way to get into it. But once you get in, you're actually part of the family." Part of the family, that is, if advertisers can indeed gain consumers' trust.

The report suggests that advertisers need to become more integrated in the activities in which consumers engage, offering free content and services to align themselves with consumers' interests: "If done successfully, this type of advertiser engagement could have a significant long-term impact as consumers will be willing and eager distributors of the advertisers' message and brand to the rest of the community."

In addition, the report states: "The importance of the Communitainment trend is not just in shifting traffic patterns but, more importantly, in the way users view content as a free-flowing part of the communication spectrum. As such, many participants in communitainment view content such as music or video as an integral part of their experience and not as a distinct entity for which they have to pay," the report states, qualifying: "Of course, beyond communitainment, there are other contexts in which users are willing to either pay for content or, at a minimum, receive an advertisement in exchange for the content."

To that end, separately, Piper Jaffray projects that global online advertising is poised to reach $8.1 billion by 2011.