The allure of consumer-generated content -- and the ad revenue it could generate -- has fueled two of the biggest deals in the digital space, Google's $1.6 billion YouTube purchase and News Corp.'s $580 million MySpace buy. The next space for user-generated content to conquer: the mobile phone.
"User-created-content distribution will be gigantic," said Roger Wood, senior VP-general manager, Americas region at Amobee Media Systems. The company allows advertisers to help fund mobile content and entertainment services. "The promise of user-generated content is the converse of the risk," he said. "It's a bonanza for advertisers."
The value of 'smack-talk'
Marketers are already dabbling with consumer-generated content on the mobile phone. Hewlett-Packard is sponsoring HP Courtside, which enables the "smack-talk generation" to post barbs and videos from cellphones to a Yahoo college-basketball page. "There needs to be some value to the user," said Mary Bermel, HP's director-interactive and emerging media. "Mobile needs to be part of a broader experience and a complementary piece to existing activity," she added.
Other marketers have tapped user-generated content as a way to enhance traditional media. Music promoters have shown live mobile messages from audience members during concerts. Nike, Intel and others have displayed consumer-created photos and other content on billboards in high-profile locations such as Times Square. More than four dozen radio stations nationwide sell advertising on interactive radio programming, said Jack Philbin, co-founder and president, Vibes Media. "Marketers are embracing this," he said.
Social networks go mobile
Mobile might be the platform that catapults Facebook, MySpace and LinkedIn to a new level, Amobee's Mr. Wood said. "Anywhere, anytime, instantaneous communication -- that's a big deal," he said.
Helio, a mobile virtual-network carrier jointly owned by SK Telecom and Earthlink, was the first to launch with MySpace Mobile. It was the cornerstone of a marketing strategy that positioned Helio as a device that connects friends. More than 70% of Helio subscribers use MySpace on their phones, said Helio spokesman Rick Heineman. However, Mr. Heineman said it's "more of a communication tool vs. a user-generated-content tool." Helio had 70,000 members at the end of December and is expected to grow to 100,000 by early this year.
No usage data was available from AT&T, which also offers MySpace as well as YouTube. A Verizon Wireless spokesman in an e-mail said Verizon's two user-generated-content channels, Revvr and YouTube, were launched in December on its V Cast service. "They have consistently been among the top-performing channels on the service," he said.
Ringtones and e-mail wanted
In a February Jupiter Research survey, 28% of teens said they wanted MySpace access on their cellphones, compared with 12% who said they wanted access to YouTube. They were most interested in mobile content such as ringtones (30%) and e-mail and instant messaging (27%).
Emily Riley, Jupiter Research's online-advertising analyst, said 7% of consumers create and maintain blogs, while three times that many, 21%, read or respond to blogs by posting messages. "People are interested in small snippets -- it's very well-suited to mobile," she said.
The success of user-generated content in the mobile space also will hinge on its cost to consumers, said Daniel Rosen, head of AKQA Mobile. "As the price of downloading [video and other content] goes down, the popularity will go up." He added: "At the moment, we advise clients to wait and see how big the audience is there."
Others aren't ready to bet everything on user-generated content. ZooVision, a Kalamazoo, Mich.-based mobile-content company, develops streaming audio, video, podcasts, cartoons and even an anime network supported by marketers and free to consumers. "Professionally created content is what people want in the end," VP Sean Berne said.