Advertising to shun user-generated video

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The FT reports that social media sites with video, like YouTube and MySpace, will not earn as much in advertising as professional video sites. According to Screen Digest, the media analysis company, ad revenues on UGC sites will grow from $200m last year to $875m by 2010. But this will account for just 15 per cent of the total online video advertising budget. Arash Amel, Screen Digest’s senior analyst, says there is no real busines yet for UGC video sites: “The business model for user-generated sites has been ‘build it and sell it and let someone else worry about the business model’.” Peter Chernin, News Corp president recently said "there is no scarcity value for the content … so there is very little ability to monetise video advertising on user-generated video,” and that the migration of video advertising to the web spells good news for professionally produced content.

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