User-generated video (UGV) gets a bad rap. Here are three reasons why user-generated video is king…

#1 – UGV: Many people continue to make broad-sweeping generalizations about user-generated videos as though they are all equal. That’s a big mistake because UGV is the deepest and widest bucket of online video content, and it also garners the most attention. UGV cuts across every demographic line, has many tiers of varying production values and quality, and hits on every topic or category imaginable. While many big-brand advertisers don’t want their brands next to all UGV, I believe many big-brand advertisers want their brands next to some of it. That is a technology problem, and like all technology problems, nobody should sweat them because eventually they always get solved.

In fact, as UGV continues to evolve and mature, more of it will begin to look a lot more like semi-professional and professional video content. While talent is not universal, it is incredibly widespread, and as the tools to create high-quality video continue to proliferate, get better and cheaper, the volume of ‘better quality’ UGV will continue to rise.

#2 – Attention, attention, attention: UGV tallied 22 billion views in 2007, up 70% over 2006. Where there is mass attention, there inevitably are ways to monetize it. If urinals can have ads, so too will some of the lowest forms of UGV. Technology and time will solve this. Similar to blog content, which when it first began to gather momentum had the same knock against it. In the early days of blogging, many pundits thought nobody would make money from it because advertisers wouldn’t want their ads next to some random person’s diatribes. Technology solved that problem and will do so for UGV. Ironically, it’s unscripted video blogging that scares mainstream media execs more than any other form of online video. Why? Because people love watching it, and mainstream media can’t do it.

#3 – 3rd Party advertising blinders: If you’re constantly thinking about 3rd-party advertising when it comes to monetizing online video, you are not seeing the big picture, or the future of online video. As an addendum to point #2, attention can and will always be monetizable and YouTube as well as many other online video distributors will eventually make a good portion of revenues indirectly from the attention that UGV garners. This revenue won’t come from serving 3rd-party ads. Gotta think outside the box a little, but soon you will begin to see some very interesting monetization strategies play out in the online video space that have absolutely nothing to do with serving 3rd-party ads.

It’s far too easy to get caught in the moment of ‘now’ when it comes to online video. These are early days still. What seems difficult to monetize today, may be the cash cow of tomorrow. Stay tuned, and don’t get caught in the echo chamber when it comes to UGV.

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