@ SXSWi: Does user-generated content have a future?

The first thing everyone seems to agree about user-generated content is that the name is terrible. Who did come up with that?

UGC is certainly a sterile term that takes some of the humanity out of the art. Author of The Wikipedia Revolution Andrew Lih asked the panel if they didn't think 'crowd-curated content' was a better term, but the consensus was that the term is just as wordy but without the benefit of being recognised. It prompted someone to say their firm had been looking at alternatives to the word 'outsourcing; and came up with 'international third-party augmentation'...

The second is that the phenomenon is absolutely integral to the internet, says panel chair Chris Tolles of Topix.net in this session on 'the state of the UGC nation'. Look at every big website and they will be built around user content, from YouTube and Google to MySpace and Facebook, eBay and Wikipedia.

Tolles compared the biggest ten sites of October 1998 to the biggest ten sites in January 2009, illustrating the shift from 'one-way' portals to the user content frameworks we rely on now.

"WHAT HASH TAG WOULD YOU LIKE US TO USE TO TWITTER THIS?" heckled someone in the audience, but I guess that's what you have to expect at a panel on user-generated content. The next minute - mid-observation - Tolles was interrupted by an enormous cheer from the session in the next room. The panel and the audience replied with their own louder cheer, and this carried on for several bouts...

IncSpring founder Wes Wilson explained his version of UGC; designers upload ideas for brands and concepts, and companies can come along and buy them. It's a reverse, or perhaps a dissection, of the usual process of developing a brand concept.

Mob rule?

Someone had to mention the trolls, and it was Tolles. "You have to deal with the fact that users suck," he said, and went on toe explain that as soon as Skittles launched that Twitter search page hack, it started filling up with messages like 'Skittles give you cancer'. (They don't, but it was inevitable someone would start swearing, or being trollish.)

Tolles' work on the Open Directory Project was eventually taken over by a group who "acted like East German librarians", and then there's the very different mob mentality of Digg. "Do we just join whichever pitchfork-wielding mob appeals to each of us?" For site owners there's the more serious issue how they keep that mob from destroying their site.

Quite simply, it means you have to rely "on humans to stay in front of the site and monitor it," said Todd Morrey of Mosso, RackSpace's cloud project. Marketers figured out how to game Digg because they realised they benefitted from the kind of attention the site could generate, but overall 'the mob' is largely positive because it's in their own interest to create an environment on the site that is fun.

The personality of the brand is also created by the users as much as the founders of the site. In the case of Craigslist, the brand is dominated by Craig Newmark's nice guy image; most people have an overwhelmingly positive view of the site despite claims that more than 50% of inbound links to the site are related to the sex industry.

"It's not so much providing a structure for users as setting the tone," said Stephen Newman of web design firm Mouth Watering Media. Tolles added that the social structures around the site also have impact; MySpace has become like GeoCities because it is open to anyone but Facebook has built an "iron-clad" environment that only friends can see.

What's the future for UGC?

It's assured, certainly - right at the heart of the web. Morrey suggested that the overload of information of generalist sites and services might mean that we shift our attention to niche sites and micro-communities to find our information. Why would you get a firehose when you could go to a specific site and find what you really want?"

Beyond that, the challenge is figuring out how to make money from UGC.

Firstly, there is a lot more value than just financial value. "Later, derivatives of ides can contribute to products that help everyone," said Newman. "Often the individual contributions are not as valuable as the collective. I don't believe it's always about 'you give me something and I'll pay you for that'."

Morrey said you have to creating a model or process that bubbles premium content to the top - not unlike eBay. Sites need scale before they can do that. In TV, the trend for reality TV has pushed down the cost of production. But individual projects can also be picked up - like the concept for an iPod Touch ad by teenage Brit Nick Haley which was so popular it was picked up and eventually produced by Apple. The reason he was able to gain an audience for that at all was through the power of an extended network online.

So what is the state of the nation? You only have to look at the election, said Tolles. "If you can elected on this stuff, you can certainly make some money from it..."

Listen to our interview with Chris Tolles