In the context of social software, the term revenue sharing refers to a social software provider allocating a portion of their generated revenue (i.e. from advertising) to users that have assisted in accumulating this revenue. For example, many social software websites display advertisements along with User Generated Content (UGC) (i.e. pictures, videos, blogs, profile information etc…). If more UGC is added then there are more opportunities for advertisements to be displayed and clicked by people viewing the UGC. Please feel free to read some of my papers for further information on revenue generation and revenue sharing for social software.
- A Survey of Revenue Models for Current Generation Social Software’s Systems [211kB]
- Survey of Revenue Sharing Social Software’s Systems [32 kB]
It appears that revenue sharing is becoming a popular mechanism for social software providers to not only reward their contributing users but also to provide an incentive to attract new users and encourage repeat usage from existing users. Revenue sharing could possibly become a norm as competition increases amongst social software websites to motivate content contributors. However, social software providers face many challenges in the adoption of a revenue sharing model. Some of these challenges would include but are not limited to:
- How can user contributions be measured so rewards can be allocated fairly?
- How can user fraud (users fraudulently generating unfair rewards) be prevented, detected and managed?
- How will the quality of UGC be effected? Can the quality of UGC be maintained or even increased?
- What other rewards (besides revenue sharing) can be implemented to satisfy the motivators of why people contribute to online communities? A community entirely motivated by revenue sharing will dissipate quickly if the levels of shared revenue drops or stops.
- How can copyright infringements and permissions of UGC be tracked and monitored?
- How could an existing social software website change their revenue generation model and/or effectively adopt revenue sharing? For example, imagine the challenges that Wikipedia would face in adopting advertising and revenue sharing.
I am interested in collecting statistical information of social software websites. If you are a social software provider and would be happy to share some of this information with me then please feel free to e-mail me. I may also be able to provide some assistance to you in adopting or refining a revenue sharing model for your social software website in return.
Stephan
04 Jan 2008 at 23:20
Hi Kevin,
For your reference and possible discussion, “MUGC” – the press release is here: http://www.pr.com/press-release/62268
The parent site has more material to get an idea of what MUGC is – look at the MUGC flash demo. Send an email if you like, I can connect you to one of the execs if you’re interested.
Thanks for the writing.
Best,
Stephan
Susan D.
05 Jan 2008 at 16:43
Good article, thanks Kevin. And, thank you Stephan!
I went and checked the Pure Verticals’ site and after reading the documentation they had and viewing their flash demo I felt I had to come back and post some initial thoughts.
Finally, a method of generating UGC revenue that allows the user to maintain control over the brands and products they endorse. Google’s AdSense methodology now being deployed across UGC video is yesterday technology for yesterday’s content. MUGC appears like a solid solution and makes sense to the UGC and site owners. Interesting, an ecommerce system that links UGC – apparently text and video – it makes complete sense. Social networks, virtual communities, select blogs, they all can benefit from such a technology.
Kudos for this post. As a social network site co-founder, I will be watchful for their product release.
Susan
Kevin Chai
16 Jan 2008 at 15:05
Hi Susan, would you be willing to let us know which social network site you co-founded?
Kevin Chai
05 Jan 2008 at 21:07
Thank you Stephan and Susan for your comments
I read the MUGC article (thanks for the link, Stephan) and it appears to be a very exciting prospect for both social network providers and their users. I’m would be very interested to know whether Pure Verticals Inc. has implemented their MUGC platform on an existing social networking website and how much benefit has derived to the network provider, the users, advertisers and merchants after the trial.
Stephan, I might take you up on your offer in connecting me with one of the execs in the near future. I was also wondering if you were affiliated with Pure Verticals Inc.?
Susan, thank you for coming back and posting your initial thoughts of the MUGC concept and your trial with the platform. Yes, it does seem that MUGC may be the future in building a flexible and mutually benefiting relationship between the social network provider and its content contributors.