Thoughts, Ideas, Opinions ... » User Generated Communities are the next business model for social media

What about transforming web2.0 communities into a profitable activity ? 

The media business has operated for years under the assumption that great content would attract audience which could then be monetized through advertising and subscriptions. Quality content was the only way to get people back. It is only a few years ago, with the rise of the internet, that communities have been seen as way to increase loyalty, but though it often was done reluctantly as readers participating has usually been seen as a source of trouble : it is difficult to control without putting monitoring resources in place while there is always a risk that a conversation not compatible with brand values occur. It is striking to see that while a few traditional media have been as daring as allowing readers to blog under their brand, most are hardly going beyond forums and some, notably local newspapers, are still hiding behind tightly controlled articles.

It is often forgotten that media have been using User Generated Content for decades but that it was subsequently reviewed by a team of editors :  that was simply “classified listings” which have been the life blood of many of the print businesses since their inception, until that industry was leapfrogged by online classified and auction, which even pre-dates the term “UGC”. Many of the content-driven media were thus left with just content to monetize their sites and ensure the recurring production of quality content. Other initiatives like allowing user-generated Photos or Videos are still mainly a black hole cost-wise, heavily subsidised by other cash-generating activities for those who have them, or VCs hoping to find a cash-flow positive buyer. Those media are thus left with the huge issue of fostering user participation, by default seen as a loss-leader, with only the largest publishers able to generate meaningful advertising revenues from the additional inventory created.

UGC is likely to stay that way, a loss leader or at best breaking even, until media graduate to the next step, User Generated Communities (see previous blog post) as these allow to generate recurring revenue streams. Indeed, if you suddenly let your readers, members or clients create their own communities, you empower them to take-over a discussion with a purpose, often around a topic that is dear to your brand. Now, many of these users might want more control on their communities with a willingness to pay for it. That is what we allow them to do through Webjam Premium Services. And by allowing premium subscription within their own branded environment, medias can now finally generate their own recurring fees, on a per community basis, something they could not generate on a per user basis : you probably won’t pay to leave a comment on an article about wedding dresses or a new car, but you may well be willing do so to create your very own wedding site or car fan site.

That is probably the best way today for many medias to monetize User Generated Content and allow them to go back to their roots of providing a service behind just content, here powering a community, which in turns compensate for dwindling revenues such as listings. For others community or e-commerce driven sites, from vertical social networking sites to yellow pages, this also creates an additional stable revenue stream.
Recurring subscription fees is always a welcome addition to advertising and e-commerce revenues : that is what Webjam Premium Services allow when bundled to our Branded Services.