By Kate Holton
Traditional media companies are ideally placed to benefit from the
explosion of user-generated content and should see it as an opportunity
and not a threat even though the potential revenue is limited, a report
The phenomenon of consumers contributing their own photographs, video
and blogs took the media industry by storm in 2006 through Web sites
such as YouTube and according to a report by consultancy Deloitte on
media trends for 2007, that is unlikely to change.
The trend prompted headlines that the traditional media was losing
sway with the consumer but Howard Davies, a director of media strategy
at Deloitte, said print and TV had been wise to stand back and see how
the practice developed.
"(They) are very well positioned to adopt some of the technology and
some of the emerging social practice ... but incorporating it
alongside traditional media channels to create an overall richer
product," he told Reuters.
Davies said user-generated content could be split into two categories
with one for people looking for "five minutes of fame" via the likes
of YouTube and MySpace and the other for people looking to contribute
to a discussion or community.
"The one group that has made the most hype is the so-called 'five
minutes of fame' and I'm not necessarily convinced that that will
continue to grow," Davies said.
"In fact you might find people start to get bored with it (but) the
less glamorous use of the Internet as a form of creating user
generated content is part of society now."
News channels including the British Broadcasting Corp. and BSkyB have
shown user-generated content including footage taken on mobile phones
from events such as the 2005 London bombings.
Web search leader Google last year agreed to acquire YouTube for $1.65
billion in stock.
Davies also cited "Runner's World" magazine which has created forums
for group discussions as a success story and said broadcasters could
use the medium to gain feedback on programs or create a buzz before
they were launched.
However the report by Deloitte's Technology, Media and
Telecommunications Industry group said the potential for generating
revenue was likely to be limited.
"There's something about the social user ... community that is
absolutely not professional and so the community doesn't want it to be
commercialized," he said about advertising around Web sites dedicated
to the content.
"It's so easy to set up a rival offering and there's very little
loyalty to these sites and you can move to another one fairly easily
and if you want to avoid adverts then you will."
Looking ahead for 2007, Deloitte said another major topic for media
companies would be the desire to "crack" China.
Deloitte said China was a challenging market for foreign media
companies due to government censorship and restrictions on foreign
ownership and said the other major factor to deal with would be
However head of media research Paul Lee said there was huge potential
in China with the Olympic Games to be held in Beijing in 2008, a
fast-growing middle class who would be looking to buy genuine goods
and a strong desire to see Chinese brands become global.
He said companies needed to be patient and form positive relationships
with Chinese business partners and government agencies rather than
trying to rush for market penetration.
"The Olympics will force the hand of the Chinese to be more open," he
said in an interview.
"(But companies) need to understand the history and have the patience
to grow with China. It's such a massive beast which cannot change
overnight but will change over decades. It may be that the investment
you're making now will be reaped by your successors."
The full Deloitte report on media predictions will be released later in
Copyright 2007 Reuters Limited.
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