User Generated Online Moving Pictures - the End is Nigh?

Screen Digest today have floated a press release for a report claiming that user generated (video) media will have extremely low relative growth from now on - moving from 47% to 55% of US online video by 2010 for example - and be only 15% of the revenues, mainly from advertising (even so, the revenues will rise from $200m to $900m).

(I saw this in the FT today and dug it up online)

There are two interesting assertions here - low relative growth from here on, and an even worse relative share of advertising revenues

The argument for the low relative growth, as I understand it, is essentially that MySpace and Google have hoovered up the bulk of today's value, and that major commercial players will now start to flood the webwaves with the delightful commercial video products we know and love already to keep the UGM share to roughly where it is now, irrespective of any growth it may have itself. (Yes, even more Star Trek is coming, clearly). For you and your new media, the End is Nigh - to quote:

"UGOV* sites need to diversify to survive. With the dominance of YouTube and MySpace Video, smaller sites are going to need to offer something different. Emerging alternative offerings include online editing, revenue sharing with content producers and hybrid services which offer both premium and user generated content."

but overall, sadly....

At the same time it's also proving rather difficult for UGOV sites to monetize their video streams. Added to recent high profile executive departures from two significant players in the industry, Revver and Guba – the signs are all there that the honeymoon period is over."

* UGOV = User Generated Online Video - your FLA du jour. Clearly UGM is now passe, but imho UGOV is too close to YouGov (remember U-Tube anyone?) so I will call it by the delightful name of UGOMP (User Generated Online Moving Pictures). Trips off the tongue eh?

It will be interesting to see the actual values and the assumptions behind the calculations, seems a bit brave to me to call the end of UGOMP so early in the game - 18 months since YouTube was a cathode spark in someone'e eye is hardly a long time - or is it an attempt to stir a little controversy

The advertising point is also interesting, in essence the argument is that there won't be enough relevant inventory to go round economically, and besides many advertisers won't want to advertise on UGOMP sites anyway:

Site owners and advertising agencies could struggle to find a cost-effective way to plan and place relevant advertising on millions of different videos. Whilst they are experiencing a period of trial and error searching for the right advertising formats, the sites risk losing their 'cool' factor as users are turned off by finding mainstream advertising on their personal videos.

So, will we see user generated advertising?

The other possibility is to use digital technology to repurpose fairly standard pieces of media for different audience segments - it would require a sort of modular ad production approach. Not easy, but it is do-able.

But this is all irrelevant anyway, as apparently few will advertise on UGOMP. News Int'l's Peter Chernin is quoted in the FT as saying recently that in reality advertisers just won't be interested:

“We do not see big advertisers advertising with YouTube or MySpace. They have concerns about the content ... and there is no scarcity value for the content ... so there is very little ability to monetise video advertising on user-generated video.”

My take....If I take the hours my kids watch GooTube vs the Boob Tube as representative - then I would be tempted put more of my advertising on those sites (and a heck of a lot more on computer games...). Commercials for fat and sugar filled junk food and expensive toys largely pass my lot by these days.

This story is also covered in GigaOm's NewTeeVee and MediaBytes