Part VII: User-Generated Content

If someone is creating content online, editing it, and publishing it periodically, they are probably in the media site business. They produce content, bundle it, and distribute it. The media industry covers a wide variety of areas like advertising, broadcasting, and networking, news, print and publication, digital, recording, and motion pictures, and each has its own associated infrastructure. We call these media sites or media apps.

It’s understandable to think that social media sites like Facebook, Tik Tok Instagram or Quora are media sites, as they mostly make money from advertising driven by the content consumption metrics on their sites. That is what a regular media company’s business model would revolve around.

Instead of creating their own content these businesses strive to create user communities that create content. This makes them companies based on the User-Generated Content business model. They deserve their own business model because their primary concern is the growth of an engaged community that creates content. It has some similarities to the E-Commerce / Marketplace model. Instead of joining buyers and sellers, they bring content creators and content consumers into the same platform. Hence, user engagement is the main driver for this model.

This model is driven by its unique funnel of user engagement:

Based on  Graph 12-1: Croll, Alistair, Yoskivitz, Benjamin: “Lean Analytics: Use data to build a better startup faster” . 2014 O’Reilly Media Inc

Applied metrics

  • Engaged Visitors:

Measures the user stickiness (how often they use the site or app)

  • Content Engaged Users:

Users that interact with content

  • Content creation:

The % of users that actively create content

  • Engaged funnel changes:

Ratio that measures how people changes from one level of the engagement funnel to others

  • Content value:

Perhaps the heaviest metrics of all, as it holds the weight of user content engagement and interaction to monetize the business.

The business value of content (ads and donations).

  • Content sharing and virality:

Ratios that measure the % of content that get shared.

  • Virality:

User engagement based on content sharing.

Includes new users from shared content.

  • Notification effectiveness:

% of users that act upon a notification.

  • Day-to-week ratio:

How many of today’s visitors were engaged earlier in the week.

 

This article was written by José Ramírez Terc, specialist in 21st century business models.

VI: Mobile Apps
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