At MIDEM 2007 in Cannes, there was an interesting debate this morning featuring Michael Downing (MD), founder of GoFish, a user-generated content site and Mike Salmi (MS) at MTV Networks. They discussed what user-generated content meant for the future of music and brands. It has relevancy for all companies wondering how to use and monetise UGC content – not just those involved in music.
Some highlights included (paraphrased, of course!):
Who in the music business is best placed to take advantage of UGC?
MD: At GoFish, we have UGC and also deals with major record companies to distribute their videos. In last two years, growth around this sector has been much more aggressive than even social networking. 120m videos a month. It is a tremendous opposrtunity with tangible monetary and business options. Whether you’re a label or new artist, there is an opportunity for everyone in the food chain.
MS: I think a lot has been made abot Myspace and new artists. But I think new business opportunities around UGC and a good way to get involved is through videos.
MD: There are 10 billion video streams a month in the UGC video category. Think will double by Aug or Sept this year. Let’s pretend we could track how many of those have some kind of commercial music involved and if each has a 0.005 cent charge put on the track use, you’re looking at huge growth rate. We’re not there yet and can’t track and audit what music is used. It’s a matter of who will move first to do this.
I might choose a Rolling Stones song to accompany a video of my son playing football. We need to identify that, track which publisher and artist involved and then pay that company. The technology is there but it’s more about getting everyone to move together and push this through. We’re going to get there – it’s just a matter of when.
MS: I’ve been on both sides. For us, the issue is less about the importance of UGC. It’s very important to us. We’re about to launch Turbonick live, a UGC kids show. It’s clearly very important to us.
The copyright problems feel manageable. The big problem for a public company like MTV is the porn side of things. Unless you are monitoring every video being uploaded, the danger is that you might get child pornography or something similar. MTV is a big organisation and that scares them. They love UGC but are asking – how far can we go?
MD: The great thing about UGC is that it is unfiltered. The downside is some of that you don’t want to see – porn, hate material. We have to filter and make advertisers comfortable with attaching their brands to something like this. But you’re not cool if you control it too much. We tell people – if you’re looking for porn, there’s better places to go.
How much should labels try to control what consumers are doing?
MD: It’s a balance. At a certain point, if you control too much, it is going to corrupt what is making this whole thing happen.
MS: If you have a song used with hate material, that’s not so good.
MD: Our users help us and they’re very passionate about the site so they will do a lot of the work for you and tip you off. A great comparison – very directly – is there has been a similar trend about brands allowing consumers to create commercials for them. A great example was the Chevy Tahoe where the brand let consumers create own ads. Lots were about environmental issues with the cars. You might think that’s failure but apparently, the Tahoe actually sold more and created street cred for brand.
MS: you have to set some parameters. The most successful competitions are where you set some parameters – we want this band, with a two-min song with these elements. Consumers will follow the rules and be happy.
MD: I have a real example at work. About 8-9 months ago, we wanted to tap into enthusiasm about UGC but wanted to guide people a bit so it came up with appropriate content. It was called ‘Artist Voices’. The first artist we worked with was Taylor Hicks, who was on American Idol. We asked people to send in their video asking him questions that he would reply to while on the road – 1.3m people streamed 3.5 million videos so it was a great success. It just needs to be structured.
MS: Don’t use UGC if you’re not going to be actively involved. You can’t just hire an outside company because it’s a new buzz thing. If you don’t know what it’s about, you’ll be shocked and it is very much the audience communicating with you, whether it’s positive or negative. You can’t see it as a one-way thing;you’re your consumers are answering, you have to listen.
MD: The dialogue has to be cultivated.I think the biggest thing we’ve seen in the last 18 months is that more than anything else, people want to take video and embed it on their webpage or Myspace as they’re using video as way to tell people who they are.
MS: It’s a social currency for them.
How can you pay for using music in UGC content? What does it mean for the music industry overall?
MD: It’s not consumers who are responsible for paying the royalty. It will be sites like GoFish who have to pay that and take that hit. We want consumers to use platforms and think we have way to monetise that. But we’re all in the midst of negotiating. It has be easy system for us to pay, track and pay. It has to be a system where it’s easier to pay than not to pay.
Here are some lessons I’ve learnt about UGC video: advertisers and sponsors have a long way to go to get comfortable with content coming through. You have to create some kind of system for safe content that people can sponsor. We have created a ‘beacon’ system of people from our community who will create safe, interesting content and we use those to pull in sponsors. It might be 200,000 dollars to sponsor Artist Voices – we filter and check that content is not inappropriate. We think you have to create beacon properties that are safe.
MS: You can use the Google Adsense model. There is the sponsorship model where you have to have safe content. There is paid placement where you pay to have video featured and highlighted throughout the website. There are other models developing as it’s so new. There is SeeMeTV in the
UK where you get a share of revenue content if people pay to watch on mobile phone. That’s very interesting.
