Media Companies and User Generated Content. Business Models. (Georgeta Drula)


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Comunicação apresentada no II Congresso Internacional de Ciberjornalismo, no Porto, no dia 9 de Dezembro de 2010.

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Media Companies and User Generated Content. Business Models. (Georgeta Drula)

  1. 1. 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
  2. 2. Contents <ul><li>Keywords: user generated content, business models, media companies </li></ul><ul><li>Definition of UGC </li></ul><ul><li>Objectives and hypothesis: </li></ul><ul><ul><li>This paper shows the ways in which the Romanian media companies expand their production and business by considering UGC. </li></ul></ul><ul><li>Statistics about the Internet and UGC in Romania. </li></ul><ul><li>Theories of UGC: </li></ul><ul><ul><li>User Generated Content (UGC) a s source of information and a resource for media production. </li></ul></ul><ul><ul><li>Business models generated by UGC. </li></ul></ul><ul><li>Methodological framework. </li></ul><ul><li>Case studies. Data and findings. </li></ul><ul><li>Practical implications and conclusions. </li></ul><ul><li>References / Bibliography </li></ul>
  3. 3. Definition of UGC for this paper <ul><li>This paper considers UGC (User Generated Content) , according with different definitions given by different sources and authors: </li></ul><ul><ul><li>An original document published by a user for a wide audience, hosted on a specialized site. </li></ul></ul><ul><ul><li>A document expressed in multimedia format as a text, a video, a photo or a combination of all these. </li></ul></ul><ul><ul><li>It may also be a collaborative product , namely more than one user may collaborate to its making. </li></ul></ul><ul><ul><li>This content is created outside the professional tasks (this does not necessarily mean that they do not comply with certain professional norms). </li></ul></ul><ul><li>The UGC can be content on a blog, on a social media site, on a media sharing platform or site, users’ comments. </li></ul>
  4. 4. Objective and hypothesis <ul><li>Objective </li></ul><ul><ul><li>The paper aims to follow the ways in which the Romanian media companies expand their production and business by considering UGC. </li></ul></ul><ul><li>Hypothesis </li></ul><ul><ul><li>The increasing number of users and the quantity of content created by them must be considered by the companies. </li></ul></ul><ul><ul><li>Users consume the information produced both by the professionals and by the other users. </li></ul></ul><ul><ul><li>The existence of a UGC has triggered the appearance of new models for the news production and business. </li></ul></ul><ul><ul><li>The business models are redefined both for the companies and for those making these materials. </li></ul></ul>
  5. 5. Statistics about the Internet and UGC in Romania. <ul><li>Dimensions and measures of UGC. </li></ul><ul><li>User Generated Content is measured through: </li></ul><ul><ul><li>general indicators such as audience and Internet traffic given by sites:, or </li></ul></ul><ul><ul><li>specific indicators such as the number of fans, number of followers and the number of blogs. </li></ul></ul><ul><ul><ul><li>52370 blogs ( , 2010, May). </li></ul></ul></ul><ul><ul><ul><li>14828 active accounts were registered by Twitter (May 2010). </li></ul></ul></ul><ul><ul><ul><li> portal indicated Romania on the 49 th place according to the number of Facebook users with a level of platform use of 7.85% in October 2010. </li></ul></ul></ul><ul><ul><ul><li>number of UGC creators, number of UGC consumers, amount of UGC that exists. </li></ul></ul></ul>
  6. 6. Theories of UGC: <ul><li>Business models generated by UGC. </li></ul><ul><ul><li>“ 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. </li></ul></ul><ul><ul><li>In the OECD’s ( Organization for Economic Co-operation and Development ) documents has been proposed several business models for UGC (OECD, 2007), such as: </li></ul></ul><ul><ul><ul><li>Donation model supposing the voluntary financial contribution for the content found. </li></ul></ul></ul><ul><ul><ul><li>Subscription model or pay-per-item model . It is a model by which any visualization of the content is made for money. </li></ul></ul></ul><ul><ul><ul><li>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. </li></ul></ul></ul><ul><ul><ul><li>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. </li></ul></ul></ul><ul><ul><ul><li>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. </li></ul></ul></ul>
  7. 7. Theories of UGC: <ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>Models for UGC integration based on business strategy according with OECD (2007). </li></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>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. </li></ul></ul>
  8. 8. Methodological framework <ul><li>Methods: </li></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>It is used the taxonomy of UGC business models supplied by OECD . </li></ul></ul><ul><li>Objects of research: </li></ul><ul><ul><li>The media companies under study are companies supplying general news online. Their hierarchy is given by the site , using the criteria of Internet audience and traffic, in March 2010. </li></ul></ul><ul><ul><li>The companies under analysis are: F5 Webcorp, Hotnews, Antena 3, Adevarul Holding, Publimedia International . </li></ul></ul><ul><ul><li>The business model has been tackled both from the user’s perspective and that of the media company. </li></ul></ul><ul><li>Collected data refer to: </li></ul><ul><ul><li>Types of UGC and UGC platforms, </li></ul></ul><ul><ul><li>The place and manner in which UGC is used on the sites of media products, </li></ul></ul><ul><ul><li>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.) </li></ul></ul>
  9. 9. Case studies. Data and findings. <ul><li>Business models for users who create content: </li></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><li>The exceptional content published by the user on the platform (Antena3 Company) may be rewarded with prizes or may be used for the news programs, as the company even mention on the platform. </li></ul>
  10. 10. Case studies. Data and findings. Prizes offered by the platform
  11. 11. Case studies. Data and findings. <ul><li>Business models for UGC used by the Romanian media companies. </li></ul><ul><ul><li>Users donate content on the companies’ UGC platforms. Their content is used as a direct or alternative information resource. </li></ul></ul><ul><ul><li>The companies could obtain income from direct sources and also by a better cost management . Thus, UGC is rather a source helping in diminishing the production costs than a direct income source. </li></ul></ul>
  12. 12. Case studies. Data and findings. <ul><li>Adevarul Holding Company </li></ul><ul><ul><li>Its online product is the site Adevă </li></ul></ul><ul><ul><li>The company has chosen to use the links to the journalists’ blogs and a personalized forum page called “My Adevarul” for UGC adoption. </li></ul></ul><ul><ul><li>(For example, here they are the comments posted for the article “Elena Udrea: Social problems are not caused by one ministry’s activity”, published on September 15 th , 2010). </li></ul></ul>Users’ comments on
  13. 13. Case studies. Data and findings. <ul><li>Adevarul Holding Company </li></ul><ul><ul><li>The discussion forum is moderated. The approached topics launched by the users have various thematic categories. The page is called “MyAdevarul”. </li></ul></ul>
  14. 14. Case studies. Data and findings. <ul><li>F5Web Company </li></ul><ul><ul><li>The main product site is, and represents a television channel. </li></ul></ul><ul><ul><li>The own UGC platform, Voxpublica, uses the advertising and the voluntary participation of the users with a certain content. </li></ul></ul>
  15. 15. Case studies. Data and findings. <ul><li>F5Web Company </li></ul><ul><ul><li>The users’ implication is measured through the number of votes for a content. The content is evaluated by the community on voxpublica platform and also on site. </li></ul></ul>
  16. 16. Case studies. Data and findings. <ul><li>Publimedia International Company </li></ul><ul><ul><li>It has the site “ Gândul online ”. </li></ul></ul><ul><ul><li>Company uses a special page destined to UGC called “citizen journalism”. </li></ul></ul><ul><ul><li>The multimedia article posted by the user is accompanied by a title and the author’s name. This material is quantified by the number of readings and it is rated by the community through users’ votes. </li></ul></ul><ul><ul><li>For example, the article of author Bogdan entitled “Our capital’s sidewalks”, published on March 2 nd 2010, registered 6 views. </li></ul></ul>Evaluation and rating of users’ content on site and the journalistic guide for writing texts.
  17. 17. Case studies. Data and findings. <ul><li>Publimedia International Company </li></ul><ul><ul><li>On 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. </li></ul></ul>
  18. 18. Case studies. Data and findings. <ul><li>Antena3 Company . </li></ul><ul><ul><li>It has own UGC platform, called Videonews. </li></ul></ul><ul><ul><li>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”. </li></ul></ul><ul><ul><li>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. </li></ul></ul>Videos on UGC platform - Videonews
  19. 19. Case studies. Data and findings. <ul><li>Hotnews Company. </li></ul><ul><ul><li>It possesses the news portal bearing the same name. </li></ul></ul><ul><ul><li>By means of this site, in section HotReporter, the users may post a multimedia content. </li></ul></ul><ul><ul><li>The photos are classified on the basis of the user’s vote according to the criterion “the most voted one”, “the newest”, and also “the image most commented”. </li></ul></ul><ul><ul><li>The users’ content is included in a pre-production process. Users must create an account and agree to a regulation imposed in terms of content creation and posting. </li></ul></ul>Adopting UGC on Hotnews portal
  20. 20. Case studies. Data and findings. <ul><li>Hotnews Company. </li></ul><ul><ul><li>It uses advertising banners and product sales on the HotReporter page as solution for obtain income. The advertising is correlated with the site traffic, and the number of visitors. </li></ul></ul><ul><ul><li>The UGC platform is a meeting place of users and are visited by them frequently. </li></ul></ul>
  21. 21. Case studies. Data and findings. <ul><li>The interviewed persons was : </li></ul><ul><ul><li>Manuela Preoteasa, editor Hotnews, </li></ul></ul><ul><ul><li>Ioana Chira, Mediafax </li></ul></ul><ul><ul><li>Miruna Molodeţ, content manager , </li></ul></ul><ul><ul><li>Laurenţiu Ciornei, Evenimentul zilei </li></ul></ul><ul><ul><li>Daniel Nazare, editorial manager - Web Division, Adevărul Holding. </li></ul></ul><ul><li>The interviews show that the p urpose s of using UGC in the media business are: </li></ul><ul><ul><li>obtaining the traffic – Hotnews, Mediafax. </li></ul></ul><ul><ul><li>creation of networking / community around the media product site - ProTV </li></ul></ul><ul><ul><li>news and advertising transmission – Adevarul, Antena3 </li></ul></ul><ul><li>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). </li></ul><ul><li>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 . </li></ul>
  22. 22. Case studies. Data and findings. <ul><li>Business for UGC means also the manner for UGC acceptance . </li></ul><ul><ul><li>The user is urged to “ post, shoot, post ” on the HotReporter web page from Hotnews company. </li></ul></ul><ul><ul><li>The site says “ be a journalist, post your own news, photos or recordings on portal ”. (Fig.1) </li></ul></ul><ul><ul><li>On the UGC platform we can find this text: “ Send your news on Videonews and we will publish you immediately ”. (Fig.2) </li></ul></ul>Fig.1 Fig.2 Videonews
  23. 23. Case studies. Data and findings. Business model of product sale on Videonews <ul><li>The companies use the advertising model to capture the users’ attention. As example we have Videonews which also practice the model of subscription or product sale. </li></ul>Business model of subscription for Videonews
  24. 24. Case studies. Data and findings. <ul><li>Business for UGC must take into considerations the hosting platforms . </li></ul><ul><ul><li>This a condition of technological nature that ensure the UGC integration as a resource in the process of media production. </li></ul></ul><ul><ul><li>The platform is the place where UGC is kept and where moderation really takes place. </li></ul></ul><ul><ul><li>The companies have chosen and alternate between the use of their own hosting platforms for UGC and well known platforms with a large number of users. </li></ul></ul><ul><ul><ul><li>UGC platforms on the Web are most often blogging platforms or social networks such as Twitter and Facebook. They are used specially for obtaining the traffic . </li></ul></ul></ul><ul><ul><ul><li>Specific UGC platforms oriented towards a multimedia content (text, audio or video) characterizing the company’s products are most often used to attract content and not only audience. </li></ul></ul></ul><ul><ul><ul><ul><li>These platforms fit better for media companies from the audio-visual or online fields, eg. (Antena3 Company), (F5Web Company) or (Hotnews Company). </li></ul></ul></ul></ul>
  25. 25. Practical implications and conclusions. <ul><li>MODELS IMPLEMENTED: </li></ul><ul><ul><li>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. </li></ul></ul><ul><li>PRODUCT SITES AND UGC: </li></ul><ul><ul><li>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: </li></ul></ul><ul><ul><ul><li>For the sites of online newspapers and magazines , the UGC is collected especially through comments to the articles . </li></ul></ul></ul><ul><ul><ul><li>For the sites of television channels is more appreciated new content created by the user. </li></ul></ul></ul><ul><li>PROFESSIONAL RULES: </li></ul><ul><ul><li>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. </li></ul></ul>
  26. 26. Practical implications and conclusions. <ul><li>UGC EVALUATION: </li></ul><ul><ul><li>The “community” criterion is equally important since it is indicated for each content by the number of visitors or postings and by the hierarchy of the type “the most visualized”. </li></ul></ul><ul><ul><li>Pre or post production evaluation of the UGC by the company. </li></ul></ul><ul><li>LIMITS OF UGC INTEGRATION IN MEDIA PRODUCTION PROCESS: </li></ul><ul><ul><li>the author’s motivations, </li></ul></ul><ul><ul><li>the information’s credibility posted by the user. </li></ul></ul><ul><li>RELATIONSHIP BETWEEN COMPANY AND THE USER: </li></ul><ul><ul><li>At this moment, Romanian media companies construct a relationship with the user regarding UGC. Both company and users want to know one each other. </li></ul></ul><ul><ul><li>This relationship will then turns into a business relationship generating income for both parties. </li></ul></ul><ul><ul><li>The information demand for production , from the user to the company and vice versa, is the one who will determine new business models based on UGC. </li></ul></ul>
  27. 27. References / Bibliography <ul><li>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 </li></ul><ul><li>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 </li></ul><ul><li>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 </li></ul><ul><li>Ding, Y., (2009, February 5). User Generated Content, Revisited, Internet Evolution , Retrieved June 10, 2010, from </li></ul><ul><li>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, </li></ul><ul><li>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 </li></ul><ul><li>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 </li></ul><ul><li>OECD (2007, April 12). Participative Web: User-Created Content, DSTI / ICCP / IE(2006)7 / FINAL, </li></ul><ul><li>OECD (2009, July 28). OECD Work on Digital Content.,3343,en_2649_34223_32160190_1_1_1_1,00.html </li></ul><ul><li>Rappa, M., (2010, January 17). Business Models on the Web, Managing the Digital enterprise , Retrieved September 12, 2010, from </li></ul>