Thursday, April 12, 2007

MySpace Kicks Back Ads on PhotoBucket: When is a Social Media Partner Really a Partner?

Om Malik notes along with many of the technology media digerati the recent expulsion of image hosting site PhotoBucket's content sharing widgets from the MySpace social media portal. The grievous charge against PhotoBucket? Ads. Along with content from the widget embedded in a MySpace page the viewer would get a PhotoBucket-provided ad. So in a twinkle of an eye PhotoBucket loses a distribution partner for its social media content. Mind you there's some pretty sad irony here in that MySpace gets content free from its millions of users and ad-free partners to generate ad revenue with near-zero editorial expense. It would seem only fair that MySpace recognize that others who are contributing to their revenue successes need to be compensated also.

The rub in this equation is revenue sharing. Unlike ad-supported mashups like TheNewsRoom.com, which shares its ad revenue with distribution partners, PhotoBucket somehow didn't think it proper to compensate MySpace for the "rental" of their context to display its revenue-generating content. If they were a little more savvy PhotoBucket would have approached MySpace ahead of time and proposed a revenue split based on MySpace-embedded ad revenues. If they were more than a little savvy PhotoBucket would have set up a system similar to TheNewsRoom that allows distribution partners to set up a self-service license for ad-supported content. In either case both MySpace and PhotoBucket have shot themselves in the foot by eliminating a popular content feature that was adding value to audiences in MySpace.

We've been talking for several years about how contextualizing content and not just ads would become the next great online revenue opportunity, so the storm of widgets invading social media properties should come as not surprise. But in an era of user-defined aggregation there needs to be a more automated regimen for determining when and how revenue-generating content can play alongside other commercially-supported content. With users constantly defining new contexts in which to share widgets and other embeddable content forms neither the services providing venues for those widgets nor the distributors of the content can afford to waste time in traditional licensing negotiations. The value of the contexts is far too fleeting to make them pay off effectively in many instances.

Content producers using widgets for distribution also need to think more carefully about how to structure their offerings for partners with different commercial outlooks. Some content could be made available through free-only partners and additional content for those willing to allow ad-supported or fee-based revenue sharing. Whatever the regimen content producers taking advantage of social media tools to embed their content in various contexts need to remember that advertising is all about selling contexts, not content. When a widget or other social media tool is embedded in another site the value of the context requires both the content provider and the site provider to recognize that the value of the context created by these tools is the sum of both parts.

As more and more users embed content in platforms of their choice media companies need to acknowledge that portals are not always going to be the play that gives them the best promise for contextualizing their content. We need to get to a point where we could have a MySpace widget that also embedded a PhotoBucket widget where a user wanted it. This is the new form of aggregation that will be most likely to pay off for publisher in the long run. All the world's a TiVo, so get your content ready for it to reside wherever it needs to - and to partner with whomever is there who has a right to share in the profits.
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