The media industry did not discover the value of user-generated content with the Internet.

From letters to the editor to the TV game show and chat show formats like Oprah Winfrey, user contributions to media content have been with us for some time.

DIGITAL DEMOCRACY: From talkshows like Oprah (above) to gameshows to reality TV shows like Big Brother and Amdrican Idol (below), to the Internet (below), you, the viewer or user, are having a greater say in shaping the mass media than at any point in history.

What the Internet has done, however, is place control of that contribution squarely in the hands of the user or community creating it. Control not just from a production/publishing perspective, but also from a consumption perspective.

Just note:

• Big Brother reality TV show in England has arguably become the best example of user-generated content in the traditional media world. Last year, 27 separate new series of Big Brother ran across various TV stations in the world, the most to date
• Usenet groups proliferated online during the early Web 1.0 days. While these were mostly about sharing content and views privately within the group, they quickly illustrated what was possible online: common-interest-driven connection, communication and community across an almost borderless world.
• Community sites based around bulletin boards and chat gave rise to the first user-generated content published online, where the users had control of the subject and the content created. The views posted on a subject constituted the content.
• Amazon was one of the first to commercialise user- generated content, with user recommendations and reviews. Since its inception, this model of word-of-mouth marketing has proven to be one of the most astute innovations through digital media and a key factor in Amazon?s success.

MySpace, YouTube and Wikipedia are now the most high-profile successes of this growing social networking behaviour online. The huge deals transacted by News Corp and Google for MySpace and YouTube have made user-generated content the hot topic it is today.

Quality remains, control of access does not

DIGITALDEMOCRACY: American Idol

Arguments that the user-generated content revolution is ushering in an age of unmitigated content mediocrity are firmly couched in the old-media model of the world. Traditional media creates markets by controlling access to content of value, but that control also spawned their position as arbiters of what constituted value or "quality".

Many traditional media publishers still cling to this position (figuratively more than factually) and many traditional consumers still subscribe to this view.

User-generated content, however, is turning this gatekeeper model upside down. The Arctic Monkeys, an Indie music group from Britain, touted as the first major band to be discovered by music fans online, provides a case in point.

Through demo tapes and file sharing by users online, the band's popularity sprang directly from users, without the mediation of a music publisher. The quality was there, and the audience found it.

This Arctic Monkeys example obviously pertains to the music industry, but similar discoveries of value are being created and found every day. From photo essays on Flickr.com, short films on YouTube, and countless online vanity publishing services to millions of blogs, user-generated content is the genie out of the bottle.

What constitutes quality has not disappeared but has just fragmented. What has changed is the role of the media in this relationship between author and audience.

In many cases, the media owner's position is now passive at best, and monetising that position is likely to become increasingly difficult. Of course, the Arctic Monkeys have since signed for the Domino Records label, and the music industry is not about to disappear.

The professional management services a label can offer a successful music act are still highly valuable.

Media publishing, on the other hand, has only ever offered real value in its position as the medium, placed between artist and audience. It is a position that the user-generated revolution threatens to make increasingly irrelevant.

The revenue intrusion pitfall

The major challenge emerging for publishers is how to monetise the growing popularity of user-generated content. While this is currently less of a problem for TV broadcasters, the advent of IPTV will disrupt traditional TV in much the same way that online publishing has disrupted print media.

DIGITAL DEMOCRACY: YouTube

MySpace and YouTube have been incredible examples of the growing power of this revolution to capture the attention and commitment of consumers, but it will be even more fascinating to see how the intrusion of publisher revenue models over the next year affects those communities.

The crux of the challenge is this: if the publisher no longer controls access to the content, how can they charge for it?

In addition, if the users are responsible for the creation and publication of that content, how does a media owner justify generating revenues from advertising against it?

These questions remain incidental at present, but as user-generated content becomes more valuable to consumers, which it almost certainly will, the relevance of the media player's position in the value chain will diminish at the same rate.

The digital media revolution is disrupting the old models of revenue generation for the traditional media companies. Yet publishers recognise the growing value users/audiences are placing on direct control of the content they consume.

From selecting video-on-demand services over broadcast TV schedules, to active contributions over passive "watching", media consumption patterns are increasingly about control.

The media industry knows it must follow or eventually become an anachronism.

From audience to individuals

In the shift away from media industry control to user control, traditional media business models are almost certain to come under pressure.

New business models will have to emerge, and one feasible direction for media publishers to move is from audience aggregators to identity tracking.

If there is one trend the last 50 years has unfolded, it is the shift in identity from the social to the self. Whole families no longer sit around the radio or TV as single-person households proliferate.

Content distribution is fragmenting not least of all to address this ever-growing pool of tastes, to the level where most consumers in modern cities can now cherry-pick most of what they consume. User-generated content is really just the obvious extension of this trend.

However, user-generated behaviour ushers in an unprecedented level of consumer behaviour tracking which passive media consumption has never offered. User-generated content will arguably take this beyond even search behaviour.

Tracking and profiling the activities of users at this level and in this context is likely to reveal consumption preferences and identity insights worth more than all the previous traditional consumer-profiling activities combined.

While privacy issues will always have to be respected and managed well, value-based relationships between brands and consumers have always been acceptable at the individual level.

Facilitating the organic evolution of what value means will be worth more in a marketing sense than simple aggregated audiences have ever been.

From advertiser to participant

Clearly, this means a significant change in marketing activities, since the biggest impact will be moving businesses from advertisers to participants.

In a world of user-generated content, where the individual members of the community have control and ownership of the medium, marketers will have to seek permission to gain entry - a kind of reverse opt-in. They will have to become participant members of the scene, welcomed for the value they bring to the group.

Early examples of this shift are beginning to emerge. Yahoo! UK for example is working with the Sainsbury supermarket group to participate openly in its Answers forums.

Sainsbury pays not for the participation (which clearly it could do directly) but for guidance from Yahoo! on what members want from the interaction, how to behave and the like. The participation is rudimentary engagement at present, around food preferences and recipes, and many in the community resent it, but it is a first step.

Publishers and marketers will increasingly have to work closely and transparently together to engage consumers in this way. Publishers will be able to make their services free to consumers in return for permission to bring vested interests to the party, and offer them strategic planning on how to engage the community, current trends in the group, identity behaviour and so on.

However, adding value will be key and publishers will have to ensure the marketers are doing exactly that.

Conclusion

The user-generated content revolution has undoubtedly captured the zeitgeist of our Digital Age. Media, just like so many other industries, is undergoing rapid change in the shift to digital, and the democratisation of participation is a strong element of that change.

How far that shift takes us, and how the media industry evolves with it, remains to be seen, but it will almost certainly require a huge shift in marketing strategies.

Advertisers will have to become valued members of the digital community they want to reach, and their marketing activities will have to constitute direct value and relevance to those audiences.

The payback will be near-zero wastage, higher conversion rates, and enhanced brand relationships.

The writer is a research director at Frost & Sullivan Australia. One of his expert areas is in analysing the digital media segment in Australia and New Zealand.

User-generated content did not start with the Internet, but the digital media revolution has turned it into a disruptive force. Both traditional and new media publishers will find it an addiction increasingly harder to control while new revenue models will have to emerge, says Darryl Nelson