Spanish ad holding company Havas recently created a digital media R&D division called Havas Media Lab, headed by our London-based friend Umair Haque. Now the Lab has come out with a provocative white paper, titled: The Economics of Consumption: User Generated Context. The full PDF paper is here (PDF link).

Its hypothesis: media companies and investors have been focusing on the wrong usage of UGC: instead of user-generated content, it should really be user-generated context, and gives its own opinion on why it’s preventing the media industry from exploring new business models and disrupting old ones. “From an economic point of view, user generated context is an entirely different good from content: a complement. Demand for one amplifies demand for the other. The tail of content is lengthening – but that supply curve is made up of new content players like PaidContent (um..that’s us) and RocketBoom….By conflating the content and context, we mistakenly assume that what connected consumers create is inherently worthless—when, in fact, it’s by letting connected consumers contextualize content that tsunamis of new value can be unlocked (just ask Google).”

My suggestion: the next paper should be on economics of attention, which ties well into this. Read this one in full…via Matthew Ingram.