Steven Starr reports that a content creator whose clip goes viral can make upward of $1,000 a week on his site Revver. "It can be a way to make... a good living," he says.

"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).