User-generated video might be all the rage, but it doesn’t appear to be a money maker anytime soon, says an analyst report from Screen Digest, a London-based market research firm. Screen Digest forecasts total advertising revenues growing from $200 million last year to $875 million by 2010—a meager 15 percent of total online video ad revenues, the FT notes. Senior analyst Arash Amel: “No single user-generated [video] site has really instilled a business model yet. ....The business model for user-generated sites has been ‘build it and sell it and let someone else worry about the business model.’”
The reason user-generated videos will continue to comprise only a small slice of ad revenues is that many videos are unprofessional, even crude. Even if the production quality is high, the content can be violent, rude and boring —all of which tends to drive big advertisers away, Reuters points out. (And as News Corp. COO Peter Chernin said just last week.) So when it comes to actually reaping real revenue from user generated content, Screen Digest advises video sharing sites diversify. , particularly with the dominance of video sites such as Google’s YouTube and MySpace, owned by News Corp. Release