The Monetization of User-Generated Digital Content
The fastest growing segment of the online information market is user-generated content, now referred to as digital media content. Digital media content is any and all content that is produced, stored, transmitted, saved and/or distributed through or on a computer or digital device and the Internet. It includes written opinions, articles, videos, photographs, Podcasts, audio recordings, software, games and messages. User-generated digital media content is the powerful marketing force that has spurred the growth of several start-ups like Twitter and Facebook. These Internet businesses have gone from zero to multi billion-dollar values in less than four years. Google pioneered the process of monetizing content by adding ads to each search result.
Google embeds advertising related by context to search results. Google's secret is simple; it uses other people's digital content. Google searches and indexes Web sites all over the Internet and makes them findable for users. Google then sells advertising that is associated with keywords contained in the users search. Marketers pay Google for specific keywords in a search associated with their ad campaigns. Twitter, Facebook, Youtube and Flickr are the leading platforms in their target markets for user-generated content. TV programming is developed for and dependent upon segmented audiences. TV has moved to the Internet, but in micro-fashion. When Google sells a keyword associated with a search, it has just sold a specific audience of one to a marketer. What Google and other online ad servers do is auction the specific audience to the marketers at differing rates based on demographics and demand. For example, an American searching for expensive wine (See Max Media's (
1. Ads are bought and sold on volume of 1,000 consumers seeing the ads;
2. Ads run from one cent per thousand to as high $100 per thousand, with video ads normally getting the highest averages.
The Max Media web sites utilize the same Internet content auctioning ad processes pioneered by Google and used by sites like PerezHilton.com and Huffingtonpost.com. This empowers Babelation.com and its content producers including bloggers, writers, vloggers (video bloggers) and others to publish their content online, and to harness the powerful social-marketing force of digital content to build multi-million dollar incomes from content that was previously given away. If "Content is King", Max Media has built a model to pay the Queen who takes care of the King!
www.HotWineWeb.com) might cost more to target than someone from a Third-World country looking for a description of a tree. Online rates can vary based upon whether the user clicks on the ad (CPC, pay per click advertisement) or just because the ad was viewed (CPM, cost per one thousand impressions). Two examples are:
The Max Media Business Model
Max Media receives from independent advertising networks, and Google anywhere from $5-$50 per one thousand unique visitor impressions on average, and even higher values on search. If 1 million people viewed a listing, story, or article on one of the Max Media sites at a high rate of $100 eCPM then Max Media could gross $100,000. The Content Owner of the story would receive at least a 10% revenue share. The Content Producer would earn $10,000. If that same story had 10 million views, the Content Owner could receive $100,000 under this scenario. Videos carry a higher advertising rate. The Company also plans on purchasing and producing its own content as well. Current Digital Media Distribution - Content Providers Do Not Make Money! Myspace, Flickr and Youtube helped pioneer the online user-generated digital content creation and distribution platform. All had different reasons behind their foundation, but the underlying force generating their explosive usage is the same; it is the power to publish, transmit and distribute personal digital content. These pioneers provide great value to consumers and
are now worth billions of dollars because of digital content. Digital media content draws millions of visitors to sites daily. Advertisers then bid to place ads targeted toward their large volume of unique visitors. Google, the most profitable of ad-supported Internet companies, uses ad bidding in online searching to create gross revenues of $20 billion a year. Meanwhile, the Kelsey Group puts U.S. Internet advertising at $50 billion for 2011.
Social media companies are now valued in the billions of dollars, but 99% of all personal content producers are not receiving a single cent from the billions of dollars being spent to advertise directly to its market. Why do producers of digital media content receive little to no compensation?
Acquisitions and Valuations of Content Websites and Blogs
TechCrunch often talks about the huge Internet acquisitions that are seemingly made every week. Youtube sold for over a billion dollars, Bebo sold for $850 million, etc. While those big acquisitions get all the headlines, there's a very active market in buying and selling smaller websites that doesn't get nearly as much notice. For every Youtube that has tens of millions of users, there are thousands of websites with smaller, but attractive audiences.
While looking into the market for buying and selling smaller websites (generally with price tags under $1 million), there's a huge discrepancy in valuation metrics that smart investors, including Max Media, can take advantage of these market discrepancies.
Max Media Group Products & Services
The Company's main products are websites in niche high value demographics providing content, news and video created by the user-generated community. The Babelation website will be open to anyone to publish breaking news and information. The news will be segmented by time, popularity, demography and interest. The Babelation news feed also will be filtered to omit offensive language, pornography, civil right hate violation
statements and political manifestos. Hotautoweb.com focuses on the classic and collector cars. Hotboatweb.com focuses on high end yachts and boats. Hotplaneweb.com focuses on personal aircraft. The Max Media platform provides several levels of service and will be customizable in order to meet a wide variety of customer needs. The Company's Delivery Network will be comprised of many innovative Web-based channels.
Target Markets
Luxury Transportation - America is enamored with luxury automobiles and exotic and classic cars. There are no less then 15 different shows on various broadcast and cable television. This demographic is one of the highest valued in the advertising business. Luxury yachts, boats, and motor coaches also fit in this niche market. The global automobile industry is a multi-billion dollar market that continues to grow. The United States is the largest and wealthiest market in the world for high-end vehicles and has been experiencing phenomenal growth since 1997 in the Ultra-Luxury/Prestige Sports Coupe and Exotic/Super-Luxury Automobile markets. Sports car manufacturers who produce Ultra-Luxury/Prestige Sports Coupes such as Porsche, Ferrari and Jaguar are anticipating a return of greater demand, and manufacturers have stepped up production and introduced new models. The Exotic/Super-Luxury Automobile market is approximately $1.5 billion annually while the Ultra-Luxury/Prestige Sports Coupe market enjoys over four times the sales volume or approximately $3 billion annually.
News and Information - The news and information marketplace has changed radically in just the last few years. It is estimated that 60 million Americans receive news on-line daily. CNN the leading on-line news provider has 35 million unique visitors each month to its news site. The on-line Entertainment and Sports market is really several markets which are merging quite rapidly. There are an estimated 50 million on-line sports fans in the USA and at least 100 million on-line consumers of music and video. The general news and information market is growing rapidly, more so in social networking communities wherein the consumers share a social context. For general consideration of the on-line news and information market one could easily estimate a total market in the USA of 50 million daily consumers and a potential advertising pool of $50 billion a year by 2014 according to a number of estimates. Videos and information upload to social sites have had general news and information relevance, forcing mainstream media networks to consider the video social networks as part of the on-line news and information market.
Future Trends
Video on demand, IPTV, peer-to-peer video, and Internet video are forecast to account for nearly 90% of all consumer IP traffic in 2012, Cisco says. Global business IP traffic is forecast to grow at compound annual growth rate (CAGR) of 35% from 2007 to 2012.
Max Media believes there will be a growing trend to integrate text, images and video into a single online multimedia presentation that Max Media calls Informatives. Integrated Informatives will be a powerful new class of storytelling media. Social media sites like Myspace and Youtube were the first phase of user-generated content; the next phase is publishing portals that enable content producers to publish digital content and also share revenues.
Competition and Business Model
Max Media faces competition from On-line News, information, search and social networking sites. The Company's competition includes established powerful companies including Google, Microsoft and CNN. These existing companies however are not directly targeted at the same markets as Max Media, and all of them offer a hodgepodge of confusing services to address some of the needs of this community. The Company believes it will have a competitive strategic advantage over all competitors because its products are being specifically developed to address the needs of the user-generated marketplace.
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