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Animators Printing Money: User-Generated Opportunities

Alain Bielik discovers how Passion Pictures and Cinesite bring exquisite literary creations to life with animation and vfx in Miss Potter.

User-generated content (UGC) has made a huge impact this past year. The accessibility of broadband and new tools have simplified the creation and distribution of content. Courtesy of iStock.

In 2006, Time magazine named "You" as its Person of the Year and Advertising Age dubbed "The Consumer" as its Ad Agency of the Year. Both illustrate the impact of user-generated content (UGC) -- including blogs, home pages, mash-ups and animation -- over the last 12 months. Not only do these platforms allow social networking, but they offer opportunities for animators looking to raise awareness for their work.

There are a number of factors that have spurred the growth in UGC in the last year or two. Broadband has achieved critical mass; new tools have simplified the creation and distribution of content; the quality of UGC content has improved; and a growing number of UGC productions have attracted significant viewership and even some revenues. As a result, everyone from the largest animation house to the most independent of animators is considering distribution through one or more "user-generated" platforms.

Online Focus

Most of the UGC action has been online. A report from the USC-Annenberg Digital Future Project, released in November 2006, found that 12.5% of Internet users had personal websites, and that 7.4% of users maintained their own blogs.

In addition to the best-known UGC platforms, such as YouTube and MySpace, there are many other venues. AtomFilms, the eight-year-old website for independent video and animation shorts, has a sister site, AddictingClips, which is UGC-centric. In addition, much of the content on the primary AtomFilms site could be considered UGC, according to Megan O'Neill, AtomFilms' vp of acquisitions and production.

Machinima comprises various genres, such as excerpts of gameplay and original stories. Machinima 101 Resource Center, a how-to site on Machinima and filmmaking will debut soon. Above is a shot from Trash Talk. © The ILL Clan Inc.

"There are various ways to define UGC," she points out. "I would argue almost all short films are 'user-generated'." She notes that the animated shorts featured on AtomFilms -- such as Dominic Tocci's I Can't Afford My Gasoline and Everyone Hates Saddam, which have generated millions of views and a paycheck for the creator -- are produced by independent filmmakers and not backed by studios.

While the bulk of UGC content is video (such as clips captured on cell phones or copied from television), animation ranging from Flash to stop-motion also is featured. One significant subsegment is Machinima (original video productions from videogames). Machinima comprises various genres, such as excerpts of game play captured to share with others; frags or montages, which are edited versions of the best kills or other game highlights, set to music; and original stories that incorporate the characters and world of a particular game.

Philip DeBevoise, president/ceo of Machinima.com, describes his site as, "a vertical YouTube for this audience." Machinima.com features game title-based channels, such as the HALO Channel or the World of Warcraft Channel, around which the content is aggregated. DeBevoise reports that the site soon will launch a Machinima 101 Resource Center, including tips, how-tos and articles on Machinima and filmmaking, as well as a social network with blogging, classifieds and MySpace-like homepages.

Corporate Involvement

The increasingly high profile of UGC has led many corporations to become involved. Some entertainment and online companies have acquired UGC platforms, as was the case when Fox and Google purchased MySpace and YouTube, respectively. Meanwhile, several online services and platforms are beginning to allow their users to upload and distribute UGC content.

Comcast and its new Ziddio UGC platform, which is being beta tested, is an example of the latter. "We support the independent creative community, and this is one way to continue to do that," says Caroline Marks, general manager of video at Comcast. During the beta phase, the company is soliciting UGC only through corporate-sponsored contests, but by the end of the first quarter it expects to open the platform to all creators.

Yahoo! also has moved into the UGC market over the past few years, adding a podcasting service and a blog search, as well as user-generated content within Yahoo! Video, where it added a mechanism for uploading UGC in June 2006.

"User-generated content is one of the key elements to our strategy," says Jeff Karnes, Yahoo!'s director of multimedia search. "We fundamentally believe in the social web and people's ability to participate." Yahoo! also owns Flickr, a photo-sharing site, and Jump Cut, an online video editing and remixing site; other UGC initiatives include You Witness News, in partnership with Reuters, and The Yahoo! Talent Show.

Another way corporations are getting involved in UGC online is by posting trailers, clips or advertisements on UGC platforms to generate buzz about their businesses. "These big companies are getting into it," Karnes says.

Ingrid Moon, an interactive-media management consultant specializing in UGC, cautions, however, that while corporations want to be involved in this market, they are still trying to figure out the best way to do so. "More corporate entities are using UGC to market their properties," she says, "but they still don't get it."

Expanding to New Platforms

User-generated content is starting to appear in other media outside of the Internet. Revver, an online site that attaches advertising to UGC and splits revenues 50/50 with content owners, announced a deal in November to provide user-generated videos to Fame TV, an all-UGC channel available to more than eight million BskyB digital subscribers. New material, selected from Revver by Fame, runs each month, with permission from the creator, and Fame TV viewers can vote on their favorites via cell phone, with the top vote-getters airing more often. Payment to creators is based on the number of votes.

Comcast's Ziddio is a multiplatform service; some users' content will be distributed over Comcast's video-on-demand television service as well as on broadband. "We're focusing on the confluence of online and VOD," says Marks. She points out that the company's VOD services already distribute content from independent studios such as Icebox and Heavy; its Anime Select channel is running a contest calling for viewer submissions, with the winner going to the Tokyo Animation Festival.

Online UGC services are also making a move to the mobile platform. Revver distributes content through Verizon's VCAST service, for example, and has become one of the top channels on that service, according to Steven Starr, Revver's founder/ceo. "It shows there's a real appetite for user-generated on mobile phones," he says.

In addition to mobile extensions of online platforms, there are several efforts that focus exclusively on the distribution of UGC over cell phones. These are mostly off-deck or direct-to-consumer initiatives, meaning they can be accessed by anyone with a video- or mobile web-capable phone, regardless of the carrier.

GoFresh, a German mobile content company that debuted in 2003, entered the UGC market in February 2006 with itsmy.com. By January 2007 itsmy.com had 250,000 users in 100 countries, according to Mikko Saarelainen, head of mobile content; in December alone, the service generated 80 million page impressions. The process is mobile from beginning to end.

Andrew Bovingdon, describes Bango as a YouTube for mobile. It service allows users to market, sell and deliver mobile content directly to phone users over the mobile Internet.

Similarly, the Bango service allows users to market, sell and deliver mobile content directly to phone users over the mobile Internet. "It's like YouTube for mobile," says Andrew Bovingdon, Bango's vp of product marketing. Brand owners of various types, as well as independent creators, are using the platform.

Peperoni, based in Germany, is a service that enables mobile phone users to create their own communities at Peperonity.com and, through a partnership with Bango, charge for content. The company was launched in 2001 to provide on-deck services to operators, and it soon introduced a site to showcase off-portal content. "It was a mechanism to create attention with operators, but end users found it and began creating sites," says Marcus Ladwig, Peperoni's coo.

Research company Informa estimates the market for mobile user-generated content and social networking at $3.45 billion globally in 2006, and predicts that number will rise to $13 billion by 2011. Asia is the most active territory by far, followed by Europe and North America.

Several trends point toward growth in mobile UGC. Almost all global carriers now accept off-deck content, to varying degrees, something that wasn't true a couple of years ago. There are several companies, including Google and Yahoo!, that have implemented mobile search engines, which makes it easier to find off-deck content without going through a portal or aggregator. Handsets are becoming more sophisticated and less costly, and there are more ways for content providers to generate revenues. The recent launch of the ".mobile" extension to identify mobile-Internet sites should raise the profile of cell phone-distributed content.

Revver, an online site that attaches advertising to UGC and splits revenues 50/50 with content owners, features the web series Doogtoons Asks a Ninja. © 2007 Doug Bresler. All rights reserved.

Revver, an online site that attaches advertising to UGC and splits revenues 50/50 with content owners, features the web series, Doogtoons Asks a Ninja. © 2007 Doug Bresler. All rights reserved.

While the idea of accessing animation and other user-generated content via mobile phone may seem strange to some North American consumers, there are regions -- Africa, Eastern Europe and India, for example -- where consumers are more likely to have access to an Internet-connected mobile phone than a computer. Ladwig reports that only five percent of its customers use the Peperonity.com website, with the remainder participating only through their phones. Unlike in the U.S., where consumers spend hours on MySpace or YouTube, many international consumers prefer or need to be mobile-centric. "They're skipping one step in the evolution," Ladwig says. "It's a similar service, but the medium is completely different."

Mobile phones are becoming a big enough global distribution channel that they can't be ignored. "All animators should be considering their own mobile website presence," Bovingdon counsels.

Generating Exposure

While much of the content posted on UGC platforms gets only a small number of hits, clips that go viral can generate views numbering in the millions. "There's really no telling what makes something hit. If we had the secret we'd be bottling and selling it," says Starr. But the opportunity exists for anything to go viral. "An open platform gives people a pretty fair shake to be seen and discovered."

"A good number [of clips] get hundreds of thousands of plays," O'Neill reports. "[The Web] gives you the ability to create a brand and a group of fans. And they're not passive audiences. It's such a democratic medium. You almost never know what's going to go viral."

Karnes agrees. "A lot of people think, if I just upload content, voilà, the world will see me," he says. Timing, topical content and the amount of promotion can play into a clip's popularity, but those factors alone don't necessarily mean a clip will resonate with users. "There isn't a blueprint," Karnes stresses.

Execs encourage animators to promote the work they post, and many UGC services offer tools to help them do so. For example, Bango allows animators to create a link from their website to their mobile site. Revver encourages wide syndication by giving third-party websites a 20% cut of any ad revenues associated with Revver content played on their site.

Yahoo! has moved into the UGC market over the past few years, adding a podcasting service and a blog search, as well as user-generated content within Yahoo! Video, where it added a mechanism for uploading UGC. © Yahoo!

O'Neill of AtomFilms encourages creators to post their animation on their blogs, send links to third-party blogs, create MySpace pages, and send out e-mails when new shorts are posted. She points out that UGC is a medium the filmmaker has control over, unlike TV or movies, and that it doesn't cost millions of dollars to promote a clip. "In the last year filmmakers have become much more savvy about promoting their own work," she adds.

Most services have editorial boards that highlight content they feel is deserving. Featured clips typically include those voted most popular by users as well as lesser-known shorts that the editors like. "We highlight creators who haven't gotten the attention they deserve," says Starr. "We want to give the content as much chance to be discovered as possible."

"With the volumes of content we've seen come in, good stuff can get lost," adds Marks of Ziddio, which also spotlights undiscovered but worthy clips.

Peperonity rates all content from one to 10, with 10 being the best, and features those with the top totals (along with a viewer-selected site of the week). Both the editorial board and the site's users contribute to the rankings, which can change as clips improve or attract more views. Ladwig says the company has put a lot of time and effort into moderating the site. "We don't want it perceived as 'user-generated crap,' but as good user-generated content," he says.

Monetization and Incubation

While exposure is the main draw for animators, some UGC sites offer the chance to generate revenues as well, although these are typically small at this point. "There's not enough revenue-sharing yet for anyone to be able to make a business model out of," says Moon, who believes a site's ability to track where and how often content is viewed, and by whom, currently is more important than how much it pays.

Saarelainen points out that sharing revenues is difficult for a global mobile content company, due to varying regulations in each region. "Instead of offering money to users [who post content], we offer fame," he says.

Still, some services do offer revenue-sharing or some other payment structure. Starr reports that a content creator whose clip goes viral can make upward of $1,000 a week on Revver. "It can be a way to make a living, and a good living," he says, adding that other sites are starting to emulate Revver's revenue-sharing structure. "A whole lot of others have looked at this model in the last six months, and we're very proud of that." Meanwhile, mobile services, such as Bango and Peperoni, enable users to charge for downloads if they want to.

Steven Starr reports that a content creator whose clip goes viral can make upward of $1,000 a week on his site Revver.

"Most of the incentive now is about getting discovered," says Karnes. "But there will be a monetary incentive that ultimately comes out of this."

Meanwhile, some content creators who gained fame through UGC distribution are starting to forge deals with entertainment companies -- both on and offline -- for future productions that eventually could generate significant income.

AtomFilms' editorial staff constantly mines AddictingClips for short films, making offers to bring content it likes over to AtomFilms, where a revenue-sharing model is in place. Primal Wars is one recent example of an animated series of shorts that incubated on AddictingClips before moving to AtomFilms.

"We not only acquire, but we are also funding more productions," O'Neill continues. Through its AtomFilms Studio arm, the company financed 18 productions in 2006, of which five were animated, including the stop-motion Game Over and Chicks with Dick, about Dick Cheney and his army of baby chicks.

"Everyone in the business is scouting online now," O'Neill says. "Since the YouTube acquisition, every media company is looking at this stuff like never before."

DeBevoise reports that videogame companies keep tabs on UGC content from Machinimators. "They're snapping up the talent to create Machinima inside games," he says. Machinima.com also is looking to fund new productions with UGC creators. "This is a good place to incubate new ideas and build an audience."

Although some deals have been forged between UGC creators and mainstream entertainment companies, most have not yet come to fruition. But most experts expect to see that situation change in the coming year, predicting a mainstream hit in the near future from a creator who first became established in the world of UGC.

The AtomFilms site has hosted several competitions, including an annual Star Wars film contest, which attracts both live and animated work. Star Wars Gangster Rap has been seen millions of times. Courtesy of AtomFilms.

Corporate-sponsored contests can be a means for UGC creators to generate not only increased exposure, but sometimes money or a production deal. For example, Comcast's Ziddio is running an initiative with European TV producer Endemol in which the winner will make a $50,000 pilot using Endemol's production studios. Ziddio also is featuring a competition sponsored by the Independent Film Festival in Los Angeles, with the winner's content being distributed on TV, and will host a Machinima contest in May, sponsored by a videogame company.

Yahoo! has held a number of sponsored contests to attract UGC, including a Doritos promotion where the winner's effort will appear as a Super Bowl ad; a music promotion where users submitted their own versions of Shakira's video Hips Don't Lie; and a contest with Fox Atomic in which the winner earned a cameo in an upcoming Revenge of the Nerds film.

AddictingClips has offered a Cash for Clips program that rewards winners with cash prizes and distribution through AtomFilms, while the AtomFilms site has hosted several competitions, including an annual Star Wars film contest, which attracts both live and animated work. One of the clips to come out of that, Star Wars Gangster Rap, has been seen millions of times, O'Neill reports.

Users = Creators + Viewers

While many "users" of UGC sites are also creators, there are others who are exclusively viewers. This group is just as important as the creators when it comes to building a vibrant UGC community. They dictate which clips go viral, and their comments and votes raise certain clips to the top of the popularity lists and onto the all-important home page. They review and rate, provide keyword tags, pass along content, and even remix, and the UGC services provide tools to help them do so.

The fact that these viewers, rather than the distributors, determine which entertainment productions succeed in the UGC environment -- leveling the playing field for creators -- makes this a platform worth exploring for animators of all types.

Karen Raugust is a Minneapolis-based freelance business writer specializing in animation, publishing, licensing and art. She is the author of The Licensing Business Handbook (EPM Communications).

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