Next Great Thing

Monetizing online video and user-generated content are hot topics in the digital world, and this week major media players are taking their “show me the money” tactics to a whole new level. On Monday, NBC Universal and News Corp. launched their much-anticipated video site Hulu.com, with the hope of emulating YouTube-style fanfare, but actually generating revenue in the process. CNN—which already boasts a highly successful citizen journalism program called iReport—announced plans to create a Second Life outlet where individuals can virtually pitch their stories for air—and save CNN the trouble of gathering news all on its own.

But with all the hype centering around mainstream websites and their ad revenue potential, little attention is given to monetization opportunities available among the thousands of smaller, niche sites that populate the internet. On Tuesday, The Wall Street Journal reported that while the top-100 websites receive half of online traffic, the other half goes to lesser-known sites that cater to specific demographics and interests. Now, companies such as Voxant.com are working to integrate this relatively untapped market into the growing sphere of online news content and ad revenue. The company seeds news from small sites to large ones (like AP in reverse). This automated crowdsourcing is raising the prospects—as well as profits—of some of the web’s up-and-coming news websites.

DarynKagan.com, a year-old website dedicated to users seeking “hopeful” news, is already reaping the benefits of its Voxant relationship. The site’s founder, former CNN anchor Daryn Kagan, tells NGT that her Voxant agreement enables her to contribute material to news organizations much larger than her own, including Associated Press and CBS News. “I post a DarynKagan.com story to my site and hundreds of websites embed that content,” Kagan says. And that’s precisely what Kagan wants: exposure. “Content on the internet is the exact opposite of old media – TV and radio – where it appears to be all about exclusivity,” she says. Kagan’s hope is that her work appears, “on as many websites as possible.”

Voxant doesn’t pay Kagan for her material when it is used by other new organizations, but does a 50/50 rev share with Kagan when her materials are picked up. The publicity also boosts her site traffic, which since its launch last November has averaged 100,000 hits on weekdays. The other benefit of Kagan’s Voxant partnership is her ability to stream video from larger organizations such as Reuters. “Not only does featuring that content not cost me anything, I actually generate revenue by posting Voxant video on my site,” Kagan says. Her payout is likely 20% of the total ad returns that Voxant generates on the video, according to numbers provided in the Journal’s report.

Kagan’s Voxant relationship isn’t the only online phenomenon working to her advantage. The newswoman says that users freely submit 70% of her site’s stories, with many providing the video, pictures, and scripts that eventually make up the bulk of her reports. “The internet is not a passive experience—people want to contribute and tell a story,” Kagan explains. “Want to do my work for me? Cool!”

Cool is right. With the web diversifying now more than ever, sites like Kagan’s are in high demand. Advertisers are hungry to expand their online ad reach into this growing, targeted market, but are weary of user-generated material that they can’t predict or control. And that’s where Kagan steps in: as a well-recognized news figure, her judgment in vetting stories on her site reassures advertisers that they’re in safe hands. “Tell me your story,” she says, “don’t post your story.” It’s only a matter of time before advertisers identify other trustworthy guardians in the online world, and place increased responsibility, and newfound profits, in their hands, too.

Related on NGT: Dateline’s Citizen Journalism on Facebook