Commentary

User Generated EMedia Content Threatens Traditional Providers' Business Model

User Generated EMedia Content Threatens Traditional Providers' Business Model

According to results of a survey released by Accenture, media and entertainment executives see the ability and eagerness of individuals to create their own content as one of the biggest threats to their business. 57 percent of the respondents identified the rapid growth of user-generated content (amateur digital videos, podcasts, mobile phone photography, wikis and social-media blogs) as one of the top three challenges they face today.  And, 70 percent of respondents said they believe that social media, one of the largest segments of user-generated content, will continue to grow, compared with only 3 percent of respondents who said they view social media as a fad.

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In this survey of senior executives in the media and entertainment industry in North America and Europe, Accenture identified growth potential for various media content. The executives surveyed in 2007 showed greater optimism about content driving their revenues than those surveyed last year, with 32 percent of respondents in this year's survey stating that content will drive their revenues, compared with only 21 percent of respondents in last year's survey.

Media Content Growth Potential(Q1 2007, % of respondents)

Content

% Media and Entertainment Executives Expecting Growth

Short form videos

53%

Video games

13

Full length feature films

11

Music

11

Consumer publishing

9

Business publishing

4

Source: Accenture, April 2007

Gavin Mann, digital media lead for Accenture's Media & Entertainment practice, said "This is just the beginning... where the media content environment grows more fractious and the user gains more control and power... The key to (traditional, established content providers) success will be identifying new forms of content that can complement their traditional strengths."

According to the study:

  • 68% of the respondents said they believe that within three years their businesses will be making money on user-generated content
  • 62% said they believe their companies will make money through advertising and sponsorships of social media
  • 21% anticipate improved profits from subscriptions
  • 18% expect profits from pay-per-play offerings
  • 24% of respondents said they do not yet know how their businesses will profit from user-generated content.

In anticipation of the changing environment, Roger Faxon, chief executive of EMI Music Publishing said the music industry is moving "from a sales model to a consumer consumption model or participation model, where its economics are predicated on the use patterns of consumers as opposed to the purchase patterns..." 

It's interesting to note, though, that not all consumers are sold on the value of user-made video. According to a Synovate study reported by eMarketer, "respondents disliked having to wade through user-generated content to get to the good stuff."

Aspects of Online Video that US Adult Internet Users Like Least

 

% of Respondents

Too many video ads

31.8%

Hard to find quality production

20.7

Difficult to find interests

19.3

Too many videos available

16.4

Too much user-generated content

11.8

Source: Synovate/Clipblast!, February 2007

For information about Accenture, please visit here.
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