http://www.mediosenlared.es/2009/01/08/a-business-model-based-in-user-generated-content-is-not-necessarily-more-sustainable-than-a-business-based-on-professional-contents/

On PowerPoint, a business plan that monetizes content generated by users can provide us with a wonderful business model of potentially unlimited scalability and a cost structure sustainable from the beginning.

It seems something like this was the idea behind JPG which we now read in GigaOm (through Journalism.co.uk) wanted to print a magazine with content generated and selected online by a community of users. Either it was too early for this project (but, honestly, are we going to print anything in a couple of years?), other say it is early because advertisers still do not want to invest in user generated sites, or it may just be not so easy to sustain businesses based in content generated by users.

I did work in an user generated content business (eBay, and yes, I still remember when I had to face all Spanish powersellers and their problems with the last update of Turbolister) and I know it’s not easy, and it is already recognized that social networks will be soon in trouble if they do not find cash. We also know that youtube (ugc) is performing in terms of finance much worse than hulu (professional content).

The truth is that it is still uncertain to assure that user generated content will be a gold mine while professional content is death. In fact, the demonstration that the long tail did not arrive yet they way they told us also supports the great difficulty to build up sustainable models based in user generated content.

In fact, the distinction between user generated and professional content is quite unfair very often, Shakespeare or Cervantes were not “users”? Why do we need to draw such a line? That line that separates UGC from professional content is more a concept invented to convince investors than a reality. When we talk about UGC we mainly mean contents done for free than I can exploit, no matter they were created by a Nobel prize or by my grandmother. Why am I talking about this?

Because behind the euphemism UGC many projects and business plans have been based (and I accuse myself in the first part becuase I have also produced and defended business ideas heavily based on UGC). Trying to build top-down a business place thinking that it will encourage a community to emerge is like, we say in spain: building the house from the roof. Communities, by definition, have at least a partially bottom-up growth, if not, more than a community they are a kind of army.

Well, I have to say I have seen how tuenti was created top-down and now it is a complete success (apparently).

It may be possible to build on communities but really difficult to create them from scratch. I would invest -honestly- little in user generated content, because it is difficult to control and always out of your hands.

Even if we feel very sorry for the closed company and its workers and investors, we have, as a society, to try learning on the experiences the others are  having to not repeat the same mistake. Having said that, I have to admit 8 y 10 new ventures right now are probably making this mistake. My guess is that we are going to see many UGC based business closing during the coming years and a couple of winners. I know it sounds crazy, but I even imagine youtube with a similar luck or with a radical model transformation.

Let’s leave this post online and see what happens!

Amusing more than anything

http://www.guardian.co.uk/commentisfree/2009/may/04/journalism-obituaries-shane-fitzgerald

An obituary of French composer Maurice Jarre, which appeared in the Guardian on 31 March, began and ended with quotes. It opened with: “My life has been one long soundtrack. Music was my life, music brought me to life” – and closed with: “Music is how I will be remembered. When I die there will be a final waltz playing in my head, that only I can hear.” The words, however, were not Jarre’s, they were Shane Fitzgerald’s – the 22-year-old student at University College Dublin had put them on Jarre’s Wikipedia page a day earlier.

Fitzgerald’s timing could not have been better. He added the fake quote shortly after the composer died and just as writers were working on his obituaries. The Guardian commissioned an obituary writer on the morning of 30 March, giving him only a few hours to produce a substantial piece on Jarre’s life for the following day’s paper. He was not the only one taken in by the hoax – the quote was recycled in several other obituaries published in print and on the web. Fitzgerald told me that he’d looked for something (or someone) journalists would be under pressure to write about quickly. Jarre’s death was “the right example, at the right time”, he said.

What others might see as an act of vandalism, Fitzgerald calls research. In an email last week he apologised for deliberately misleading people and for altering Jarre’s Wikipedia page. He said his purpose was to show that journalists use Wikipedia as a primary source and to demonstrate the power the internet has over newspaper reporting.

Read the full article »