Media Companies and User Generated Content: Business Models Georgeta Drulă Ph.D. Associate Professor Faculty of Journalism and Communication Studies University of Bucharest II International Congress on Cyberjournalism "Business models to journalism on the Internet" December 09-10, 2010 University of Porto, Portugal
“ Business model is the manner in which a company may sustain itself and generate income .” (Michael Rappa, 2010, January 17). He proposes a taxonomy of the business models on the Web according with the company’s business strategy on the Internet.
In the OECD’s ( Organization for Economic Co-operation and Development ) documents has been proposed several business models for UGC (OECD, 2007), such as:
Donation model supposing the voluntary financial contribution for the content found.
Subscription model or pay-per-item model . It is a model by which any visualization of the content is made for money.
Advertisement based models . This manner brings income indirectly by keeping the content consumption free. The payment for advertising is correlated with the site traffic, the number of visitors or accesses of the advertising form used.
License distribution model . The supply of content to other channels or third parties. Thus, the content creators may grant for free a license to a site or platform of this type so as to use their content. Then this site may supply the content to third parties.
Model of product and service sale to the community. This model works well on sites with large traffic. It allows the direct sales of products and services to users.
UGC could be a source of information and a resource for media production. Models generated by the UGC for the news production and business are generally models for the UGC adoption as a professional content.
The business models on the Web depend on: (A) audience (traffic of the site and the importance of this traffic), (B) p urpose of the business , (C) the manner for UGC acceptance, and the (D) hosting platforms.
Models for UGC integration based on business strategy according with OECD (2007).
Pre-production moderation. The content sent by the user is reviewed by a specialist or a person responsible for the exactness and quality of the content and only afterwards it will be posted on the platform.
Post-production moderation. The content sent by the user is immediately accessed, without restrictions, by other users. The moderation made by a specialist or a responsible person consists in the review of the material, its modification or deletion immediately after it has been posted.
Peer-based moderation. The role of a moderator shall be played by another user and not a specialized person. This moderation system gives high responsibility to the community.
Case studies of media companies in Romania. The analysis is based on observation correlated with the data collected from online archives of these companies and the interviews with representatives of their Internet / new media departments. The data obtained are both qualitative and quantitative.
It is used the taxonomy of UGC business models supplied by OECD .
Objects of research:
The media companies under study are companies supplying general news online. Their hierarchy is given by the site sati.ro , using the criteria of Internet audience and traffic, in March 2010.
The companies under analysis are: F5 Webcorp, Hotnews, Antena 3, Adevarul Holding, Publimedia International .
The business model has been tackled both from the user’s perspective and that of the media company.
Collected data refer to:
Types of UGC and UGC platforms,
The place and manner in which UGC is used on the sites of media products,
The business strategy of the company established through interviews. (The options were: obtaining content, obtaining the traffic, creation of networking / community around the media product site, news and advertising transmission.)
The advertisement model is the business model most frequently used by the user on UGC platforms. Banner posting on personal blogs may bring users income related to this activity.
Another way for the users to obtain income from the content created by them is by financial compensation, awards or prizes when such content brings audience to the company. It is also the model by which the media company adopts and uses UGC.
The exceptional content published by the user on the videonews.ro platform (Antena3 Company) may be rewarded with prizes or may be used for the news programs, as the company even mention on the platform.
Case studies. Data and findings. Prizes offered by the Videonews.ro platform
On Gandul.info site, the article “The concrete constructions in green area Unirii Boulevard”, published by the user Loredana, on September 29 th 2009, have two photos and a text. The article has registered 7602 visualizations on October 15 th 2010 and a rating of 4.81, namely 27 votes.
The content is represented by the video or audio sequences and photos. Pages uploading these materials are called as: “Video from users”, “Photos from users” or ”Audio from users”. The materials are then ordered by the criterion “the most visualized” or “the most recent”.
The user content is included in the production process after it is evaluated by the community and also after a pre-production evaluation when users are trained how to prepare their material from the journalistic viewpoint.
Daniel Nazare, editorial manager - Web Division, Adevărul Holding.
The interviews show that the p urpose s of using UGC in the media business are:
obtaining the traffic – Hotnews, Mediafax.
creation of networking / community around the media product site - ProTV
news and advertising transmission – Adevarul, Antena3
The representatives of new media / Internet departments said that most sites of media products have created profiles on Facebook and Twitter to arrive faster to their audience or to get diversified (Ioana Chira – Mediafax, Manuela Preoteasa - Hotnews).
While interviewing the persons in charge with the online medium from the media companies, we noticed that they are still looking for the place of UGC within the process of information production. The main obstacles are the author’s motivations and information’s credibility .
The business models used by the Romanian media companies in terms of UGC and compared to the taxonomy supplied by OECD are generally hybrid based on advertising, free donation of content by the user and product sale.
PRODUCT SITES AND UGC:
The companies which have noticed and used UGC are generally those making media products for televisions or online. The media companies have different implication level in the relation to UGC, thus:
For the sites of online newspapers and magazines , the UGC is collected especially through comments to the articles .
For the sites of television channels is more appreciated new content created by the user.
UGC is mainly appreciated according to journalistic criteria : the importance of the information, the manner in which it is written or the media form used. Companies help amateurs by mentioning rules for journalistic writing.
Baker, G., Taylor, D. (2007). A Communication Model for Virtual Collaboration, Issues in Information Systems, Volume VIII, No. 2, 2007, pp.127-133, Retrieved May 18, 2010, from http://iacis-online.org/iis/2007_iis/PDFs/Baker_Taylor.pdf
Bruns, A. (2008). News Blogs and Citizen Journalism: New Directions for e-Journalism, in K. Prasad (ed.), E-Journalism: New Directions in Electronic News Media . New Delhi: BR Publishing, 2008, Retrieved May 18, 2010, from http://snurb.info/files/News%20Blogs%20and%20Citizen%20Journalism.pdf
Daugherty, T., Eastin, M. S., Bright, L. (2008). Exploring Consumer Motivations for Creating User-Generated Content, Journal of Interactive Advertising , vol.8, no.2, spring 2008 , pp. 16 - 25 , Retrieved May 2010, from http://jiad.org/article101
Ding, Y., (2009, February 5). User Generated Content, Revisited, Internet Evolution , Retrieved June 10, 2010, from http://www.internetevolution.com/author.asp?section_id=542&doc_id=171590
Dorsey, P. (2004). The Five Rules For Successful Stock Investing. Morningstars Guide To Building Wealth And Winning in the Stock Market, Ed. John Wiley & Sons, cap. Media, pp. 285 – 295,
Flew, T., Bruns, A., Collis, C., Jackhon, M..& al. (2009). Audience and Market Foresight – Trends and Foresights in Digital Media, Volume 1 – State of the Art, February 2009, Retrieved May 2010 from http://eprints.qut.edu.au/28560/1/Audience_&_Market_Foresight_-_Volume_1%5B1%5D.pdf
Hetcher, S. (2008). User-Generated Content and the Future of Copyright: Part One—Investiture of Ownership, Vanderbilt Journal of Entertainment and Technology Law Vol. 10(4) , Retrieved March 2010, PDF from http://law.vanderbilt.edu/publications/journal-entertainment-technology-law/archive/download.aspx?id=3826