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User Content Provides Opportunities

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SAN FRANCISCO Consumers eager to create their own digital videos, blogs, mobile phone flip-books and other content are a major threat to the media and entertainment business; but if handled correctly, such user-generated fare could become a new source of ad and sponsorship revenue.

Those were among the findings of an Accenture survey released this week.

About 57 percent of the media and entertainment executives surveyed said the growth of user content is one of the top challenges they face.

At the same time, more than two-thirds—68 percent—said they believe that within three years their businesses would be making money from user-generated content, mostly through advertising and sponsorships of social media.

However, a quarter of the executives said they have no idea how their business would structure such moneymaking deals and relationships.

WPP Group CEO Martin Sorrell, a participant in the survey, told researchers that technological change and the consolidation of digital and non-digital business models would have a dramatic impact on media in the next five years.

"The winners will be those who can probe and analyze the changes and manage and merge online and the offline most successfully," Sorrell is quoted as saying.

Roger Faxon, chief executive at EMI Music Publishing, told researchers that his industry has moved "from a sales model to a consumer consumption model or participation model, where its economics are predicated on the use patterns of consumers as opposed to the purchase patterns."

He said, "Music companies will function more as facilitators for bringing music and the rights that support them to the marketplace, as opposed to being originators of the content itself."

"This is just the beginning of a seismic shift in which media content becomes more fractious and the user gains more power," said Gavin Mann, digital media lead for Accenture's media and entertainment practice, which oversaw the survey.

"Traditional, established content providers will have to develop new business models in order to keep revenue streams flowing," he said. "The key to success will be identifying new forms of content that complement their traditional strengths."

Asked to identify which type of content offers the highest growth potential for their industries over the next five years, the greatest number of respondents—53 percent—cited short-form video, followed by videogames (13 percent), full-length films (11 percent), music (11 percent), consumer publishing (9 percent) and business publishing (4 percent).

The survey is part of an annual study examining growth strategies of media and entertainment companies.

Accenture surveyed 110 senior executives at advertising, film, music, publishing, radio, Internet, videogame and TV companies in North America and Europe.

Along with Sorrell and Faxon, the researchers interviewed leaders such as Leslie Moonves, CEO at CBS, and Doug Neil, svp, digital marketing at Universal Studios.