April 2009 Archive
Morning Don't Ep. 20 from sarah lacy on Vimeo.
[Cross-posted from TechCrunch, see lively comments as usual over there] Does anyone remember that show Project Greenlight? It came out of LivePlanet, the 1999-era dot com started by Ben Affleck, Chris Moore and Matt Damon that aimed to use the Web to transform traditional entertainment. It was user generated content before we had an over-used buzz-phrase for it.
The premise of the show was that would-be writers and directors would submit their work via the Web and the guys would pick the most talented person and produce his or her movie. It was an entertaining show, but the movies always flopped. In the later seasons, I remember a scene where a frustrated Matt Damon says something like, “Are we saying we were wrong and all the talent is already in Hollywood?”
Welcome to the catch-22 of User Generated Content. And guess what? It hasn’t changed with time. We all know there are talented people who never get their lucky breaks, so democratization works in theory. But there’s a problem: It doesn’t make money. Users don’t want to pay subscription fees for something aspiring writers, singers, and actors are uploading for free, and advertisers don’t want to be next to dodgy and unpredictable inventory, no matter how gaudy the page views or streams.
In the LivePlanet-era, costs and excesses ran fledgling UGC companies into the ground. But this time around, with more people online, greater access to bandwidth, a more established online advertising ecosystem, and far lower burn rates, there was reason to believe the monetization nut could be cracked. After all, there was a time when no one thought you could make money off of search. Tim Koogle reportedly used to brag at Yahoo analyst meetings that search traffic was going down, because how could you possibly make money off people leaving your site?
Then, the financial world blew up the economy for us. And the most rosy-eyed optimists have come to realize that even though Web companies didn’t cause the meltdown this time, they’re still getting hit. Companies need revenues and in a duck-and-cover economy, it seems UGC isn’t going to get them there. Across the Web 2.0 world, we’re seeing a quiet-but-knee-jerk shift away from UGC in favor of professional content.
I wrote about this idea back in February when Slide—a company that’s long championed the marketability of individual expression—did a deal with Ashton Kutcher’s Katalyst Media. But in the last few weeks, there’s been a better example: YouTube. Last week, news leaked that YouTube was close to locking Disney up in an exclusive deal for long-form content, and now, we hear of a potential deal with Sony Pictures.
One of two things has happened: Either YouTube has spent years trying to work on deals with Hollywood,and they all happen to be closing at the same time; or the biggest champion of the user generated content revolution is changing its game plan.
Of course, YouTube won’t say it’s turning its back on user generated content, the same way Max Levchin said calling UGC a loss-leader was “too harsh” a few months ago. (Never mind, he had just described it as a great way to bring in users but not a great way to make money….you know, the definition of a loss leader.) That’s because smart entrepreneurs realize user generated content still matters, it just doesn’t directly translate to revenues. UGC is the core of why so many people are on these sites and without the eyeballs, the tech platforms don’t have as much negotiating leverage with Hollywood. Without Hollywood, it seems, they may not get revenues anytime soon.
It’s an interesting catch-22 for entrepreneurs and executives. Web 2.0 companies need to shift their emphasis away from UGC, without seeming like they are. In other words, they can’t abandon the soft, fuzzy ROI of UGC, as much as the immediate need to make money is pressing down on them. Otherwise, they risk driving users away and opening the door for the next wave of Web upstarts—the same way Web 1.0 did when its leaders stopped chasing eyeballs in favor of premium services and subscriptions.
I’m sitting on the oldest plane ever somewhere over the Atlantic Ocean. I think the Wright Brothers might have carved their name in the bathroom, before they moved on to a newer, more commercial model. I should be nodding off soon: It’s a sure sign the Ambian is kicking in when I can’t type. You’ll probably read this once I’ve edited it in the morning, but right now it looks a bit lishksjent thiewbbs. I’m also sitting in the very back of coach with a longshoreman in front of me who is reclined so far back in his seat, I might as well make his flight a little nicer by massaging his temples. He actually asked the flight attendant why it wouldn't recline more. Um, those would be MY LEGS.
I’m coming back from two weeks in Tel Aviv, as you know if you've been following me on Twitter or TechCrunch. I’m exhausted, sad, happy, and inspired because I can see parts of the book coming together already. But mostly I just can’t wait to see my husband. (see his cuteness, below)
Since I’m getting Ambian-heavy-typing-fingers, I started watching the movie “Marley & Me,” thinking it would help the pill, wine and a noise reduction headset push me into a sleepy world where I can dream of flying first class. Instead, I’ve found myself actually watching it. Perhaps, as a cat person, I’m missing the point, but it seems to be a movie about a reporter who is so tethered by family life, he can never follow his dreams. He watches sadly as his buddy travels all over the world writing about drug cartels, which is sort of like traveling all over the world and writing about entrepreneurs.
It’s pretty hard to watch this and not miss my husband even more. There are very few men who would be cool with me flying off for weeks on end, coming home exhausted and emotionally-spent with even more work to do.
This book is really hard to do on a ton of levels. But I can handle the flights, the jet lag, the exhaustion, the mindless hours organizing logistics, and the frustration that comes with only knowing five words in someone’s language when you’re trying to learn his or her deepest hopes, secrets and fears. I can handle it all because I also get the joy and excitement when it comes together. But Mr. Lacy only gets an exhausted wife he sees more on Skype than in real life. Either he secretly hates me or he’s a pretty amazing guy.
If you follow me on Twitter, you know I came down with a minor but annoying cold in Israel. So much for my first international trip in more than a year without getting sick.
Honestly, WTF? I am young(ish), work out several times a week, eat organically, don't smoke or do drugs, and for a blogger, I sleep pretty well. Yes, I take Emergency and Airborne on flights. I feel like I live pretty healthy, so why do I keep getting sick? I will give the Blueprint Cleanse credit for keeping me well leading up to the trip and through the flight. So maybe I just need more fruits and vegetables?
I'm open to any and all suggestions here, because I can't get sick everytime I fly this far. Given I've got about a trip per month planned for the next 18 months.
Speaking of, here's my lastest post on TechCrunch. It's on MyHeritage, an unconventional but, I think, underrated Israeli Web company. To my surprise, a lot of people in Israel didn't even know much about them.
An unforgettable portrait of the emerging world's entrepreneurial dynamos Brilliant, Crazy, Cocky is the story about that top 1% of people who do more to change their worlds through greed and ambition than politicians, NGOs and nonprofits ever can. This new breed of self-starter is taking local turmoil and turning it into opportunities, making millions, creating thousands of jobs and changing the face of modern entrepreneurship at the same time. To tell this story, Lacy spent forty weeks traveling through Asia, South America and Africa hunting down the most impressive up-and-comers the developed world has never heard of....yet.
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