Creators, All of Us

It’s not a secret that over-the-top Web players are using cable’s $100 billion broadband infrastructure to offer video. Yes, most cable operators view them as freeloaders and worry that potential net neutrality rules could effectively sanction their end-run actions. But cable execs shouldn’t let these regulatory and legal debates blur the larger picture. Something’s happening that goes beyond repurposing traditional media content for direct Web distribution. Much of this content comes from users themselves. User-generated content is literally changing the way news, information and multimedia content works its way through the global community. According to Forrester Research, 75% of online adults, and more than 90% of online youth, are tapping their peers for content of all types on the Web. And increasingly, they trust those content sources. Blog, podcast and RSS advertising is exploding, with total spending on user-generated online media expected to grow 144.9% to $49.8 million in 2006, PQ Media reports. The challenge for MSOs is figuring out a business model for user-generated content that can coexist with linear TV. Broadband’s proliferation is only raising the stakes. Using the Internet and broadband technology, anyone can be an on-camera newscaster, voyeur, comedian, pundit, teacher, political commentator or instigator. Right now, many of the bloggers— and certainly most of the "vloggers" and Web video producers posting content to YouTube, Revver and other such sites— are from the younger generation. But that’s changing, with older demos joining the party (and those kids will be upwardly mobile adults in just a few years). Has cable really thought about what this shift means for its half-century-old media distribution model? After all, next-generation set-top boxes are really just computers. The fact that they’re hooked up to a TV screen rather than a PC screen is immaterial. And with an Ethernet port or WiFi receiver embedded in the box, consumers no longer need be limited to spoon-fed channels from a linear lineup. They will find ways to access anything residing on an Internet-linked server— from anywhere in the world. TiVo’s recent announcement that it will let users pull down video content from the Internet and into their TVs is one example. Microsoft’s XBox360 gaming console and Apple’s planned iTV boxes are also bringing Internet video content to the TV screen. With a broadband connection, the content could come from NBC Universal or from some guy in his garage. And if the net neutrality rules become reality, gatekeepers won’t even be able to favor one player over the other. The challenge for MSOs is figuring out a business model for user-generated content that can coexist with linear TV. Think of what this could mean for customer retention—especially among the younger demos coveted by advertisers. How about a user-generated tier? Cable shouldn’t leave this market to the Microsofts, Apples or YouTubes of the world. Playing catch-up is never easy. Michael Grebb is executive editor of CableFax Daily. He can be reached at mgrebb@accessintel.com

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