UGC and local media

Set up user-generated content on your Web site to open up new revenue streams.
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With the explosion in user-generated content (UGC) over the past few years, it's hard to believe that YouTube is just four years old. Remember that hardly any coverage of Hurricane Katrina came in from user-generated video. The coverage consisted of cable and TV personalities and their crews. That has all changed with shocking speed in the past two years and, coupled with the economic recession that has punished traditional media, it's never been more critical for local broadcasters to have a strong UGC strategy and implementation that leads to new revenue streams. From a system architecture perspective, the workflow for working with UGC is not much different than working with station-generated content on your Web site. The overall workflow in Figure 1 tends to apply to both content processes.

How to set up UGC

The key baseline requirements in each area of the workflow are:

Capture

Rather than capturing video content from a station broadcast in one format, any UGC solution must be capable of ingesting content (or rather, having content uploaded to it by users) from a variety of devices (users' computers, mobile devices, handheld cameras) and in a variety of formats (MPEG, JPEG, QuickTime, Flash, WMV, etc.).

Review

While station-generated content typically doesn't need to be screened for pornography, copyright infringement or obscenity, it's vital that your UGC solution provide a mechanism for any uploaded content to be screened both prior to and after publishing. It's also important that station staff and the user community on your Web site can report and reject objectionable content. (There are some technology-based solutions that provide for a high degree of screening, but none are yet at the level where human review is not required.)

Edit

This consists of the ability to trim down any submissions to only the pertinent content. For the purposes of protecting against copyright infringement or payment of royalty fees, this must also include the ability to strip out any music associated with a video submission if it's not clear that the music was independently created. While YouTube may have millions of dollars to fight royalty lawsuits, my guess is that most who are reading this article do not.

Encode

Once content has been approved and has been edited, it should be encoded into your preferred streaming format. I strongly recommend Flash-based video streaming as it has by far the highest usage, though a minority of UGC solutions have adopted Microsoft's Silverlight. Note that some solutions may take the encoding step just after the capture/ingest stage. This is a perfectly valid setup, but leads to higher use of system resources and bandwidth.

Publish (generate revenue)

With the UGC encoded and ready to publish to your site, appropriate ads should be included with the content during the publishing process. Monetization of UGC is by no means a mature process, but generally the same advertising formats you'd use on your station Web site and on your mobile solution are appropriate here. These ad formats generally fall into three main categories: contextual ads (such as Google's AdSense), display/banner ads and in-stream video ads (such as preroll or overlay ads).

Archive (and potential syndication)

The importance of storing both your station-generated Web content and user-generated content in perpetuity can't be overstated; it's absolutely essential in terms of driving increased traffic, user engagement and revenue to your site. Creating a premium local video archive of the best professionally generated and user-generated video for your market should be the goal — something like a local version of YouTube. Virtually all of the primary UGC solution providers will enable you to store your published video in perpetuity at no additional storage cost, and services such as Amazon's S3 offer “storage in the cloud” at rates as low as 16 cents per GB. The creation of this long-term archive, and the possibility to syndicate this content out to multiple sources on an ad revenue share or license-fee basis, is often referred to as long-tail monetization.

Revenue/monetization strategies for UGC

Think local when determining how to generate revenue from a UGC channel on your site. Local CPMs are far outpacing national CPMs, and local advertisers will place a value on your brand and editorial direction that a national buyer never will. In some cases, local CPMs have outpaced national CPMs by 10X.

I strongly believe in selling what we refer to internally as “flat-fee sponsorships on a capped-impression basis.” This means that your team should sell UGC (and Web site) inventory on a flat sponsorship basis, but with a firm limit of how many ad impressions that sponsor will get. For example, you might charge a local sponsor $15,000 per month for the following:

  • Exclusive sponsorship of one of your UGC channels. Let's say, for example, you're running a Cutest Pets contest that month, and the advertiser is the exclusive local sponsor of that channel online.
  • A 300 × 250 display ad above the fold on all Cutest Pets pages — up to 1 million impressions.
  • A simple text link on Cutest Pets pages that links out to the sponsor's business Web site. This is helpful for the sponsor's Search Engine Optimization (SEO) rankings.
  • A 15-second preroll ad on all Cutest Pets videos that are submitted — up to 100,000 impressions.
  • An optional on-air visual banner or short mention in any on-air spots that promote the contest.
  • If the impression levels listed above are met, the station will traffic national ads as backfill for the added impressions. Note: This is critical, as if you don't put this impression cap in place and a Cutest Pet video goes viral, you may end up having a huge video bandwidth bill on your hands with no additional revenue. Having the impression cap and right to run backfill in place protects the station and allows you to generate more revenue.

If you do the math on this sponsorship package, the sponsor is paying $10 cost per thousand (CPM) on the combination of the display ad and text ad, and $50 CPM on the video pre-roll ad. These CPM levels are healthy enough that, as you continue to promote your site and grow traffic through a combination of UGC and station-generated content, you'll have a strong business and outlook for years to come.

Timur Yarnall is the founder of Broadcast Interactive Media.