EVTV1.com's CEO discusses issues with user-generated video content, and how it relates to a brand's need to control its image.

Video is the hot new thing, no doubt about it. The stakes are high as broadband continues its inexorable penetration, paving the way for more and more sites offering video content. Users experience the video either through watching streamed content or downloading it to their hard drive. The current debate in the online video industry is whether licensed content or user-generated content is the better model.

The 900 pound gorilla in the user-generated space is YouTube. Others in this space include eBaum's World, Stupid Videos and Grouper.com. Those following the licensing route include Brightcove, EVTV1, MSN, AOL, Yahoo!, iFilm, Atom Films and a few others. Now that some of the players have been identified, let's join the discussion by asking what everyone has been asking:

Is there a real future in the YouTube model?
To refresh your memory, YouTube allows users to upload their favorite videos and share them with the rest of the video consuming crowd. While this is deemed "user-generated" content, it is a bit of a misnomer since one can upload your favorite episode of Desperate Housewives, Twilight Zone or Sopranos along with the favorite video clip of your dog chasing its tail.

Uploading copyrighted material lifted from cable or television may be user-uploaded, but it is hardly "user generated." The reason for the quotation marks reflects the misnomer. Most people think users producing their own video equals user-generated content. Presently sites like Grouper.com, YouTube, Vidiac.com and others in this space have tens of thousands of video clips uploaded daily. There are no available figures on percentages of content uploaded violating copyright versus genuinely produced clips by users. Both legal and illegal content are growing exponentially.

Will advertisers subsidize illegally uploaded content? Conventional wisdom considers this type of content as stolen content. Therefore, it is highly unlikely that Fortune 1000 companies will flock to advertise in front of unauthorized uploaded content.

Now, before we go any further, it should be noted that I may not be the most neutral of observers. As the CEO of the video network, EVTV1.com, we have faced the issues involved in this article and decided against building a model on user-uploaded content. That could change in the future, but not until we can police uploading much better than the present technology allows. Instead, we have opted for licensing content from its owners. We control which content goes up on the site, not users.

Pursuing this path has not been without problems. Sites that specialize in licensed content simply do not grow at the same rate as the user-uploaded sites. YouTube reportedly serves 35 million video streams a day…at EVTV1 we serve seven million streams per month as of May. That is a dramatic difference in anybody's book.

So the ability to build huge audiences is fostered by the user-uploaded model, but the hazard of copyright violation is ever present. There is also another problem with user-uploaded content. How can it be monetized? Once one removes the unauthorized uploaded content, what is left is the real user-produced content-- and quality issues abound.

More and more advertisers understand that the content one is associated with has just as much, if not more, importance to their brand as the site. Will a brand advertiser like Chrysler place a :15 commercial in front of the latest "Jackass" video of a college student lighting digestive gas with a Zippo lighter?

We are witnessing a historic shift in internet advertising. Once upon a time, the website destination was uber alles. But with today's iPod and mobile phones, people can watch what they want where they want. The content milieu has become more and more important. If Seinfeld clips are available at WTBS.com, Yahoo.com, on an iPod or at XYZ.com, the brand advertiser gets the halo effect from the Seinfeld content. The site or device from which the content is viewed is less important than the Seinfeld content itself.

Content is king…not the website or delivery mechanism. Brand advertisers are way ahead of agencies, rep firms and websites. Advertisers have been attaching themselves to quality content long before the internet was around. So the content on the user-uploaded sites requires a gatekeeper to protect brands from unacceptable user content. Who is going to do this? Building a huge audience and having brand advertisers run away from the content is a dilemma that to date remains unsolved for user-uploaded sites.

Video sites specializing in licensed content have a different problem-- building audiences large enough to satisfy advertiser demand. MSN, AOL and Yahoo are selling out ad inventories they have at their disposal. Less well known sites have not yet hit critical mass regarding traffic to attract advertiser attention. The sheer volume of content that user-uploaded sites engender, even if one polices and removes the unauthorized clips, gives those sites an edge in aggregating eyeballs.

Certainly this will not be the last word in the debate. Billions of dollars hang in the balance as more and more eyeballs move online.

Jaffer Ali is the CEO of the video portal EVTV1.com and has been licensing intellectual property for over twenty years.