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Question of the Day: Bebo & Profit Sharing

Question of the Day: Do social networks exploit their user-content generators?

I don’t know if you saw Billy Bragg’s Op-Ed yesterday, The Royalty Scam, but it’s worth reading as a criticism of social media business models that leverage the intellectual and artistic capital of users to build a traffic base that can be monetized — and then don’t share the wealth.

Specifically, singer/songwriter Bragg is griping about Bebo, which he argues built its 40 million-strong user base in just 2 years, in part, because indie artists allowed Bebo to showcase their music for free and that this helped Bebo snag its $850 million sale price from AOL last week.

Bragg writes:
“The musicians who posted their work on are no different from investors in a start-up enterprise. Their investment is the content provided for free while the site has no liquid assets. Now that the business has reaped huge benefits, surely they deserve a dividend…
The claim that sites such as MySpace and Bebo are doing us a favor by promoting our work is disingenuous. Radio stations also promote our work, but they pay us a royalty that recognizes our contribution to their business. Why should that not apply to the Internet, too?”

In Bragg’s camp, Nick Carr calls this exploitation. Mike Arrington thinks the musicians should be so lucky to have their art exposed on such a large platform. But then there is a chicken & egg dilemma here: did the draw of free music help build the Bebo community/platform the musicians now benefit from, and do the musicians deserve credit for this?

So the debate forms our Question of the Day:

Is it time for social network business models to evolve?</strong
* Is user generated content equivalent to work product?
* Are users’ contributions in building a community site equal to sweat equity?
* Should social networks compensate user-generators for either?
* Should this come in the form of sharing advertising revenue with user-generators?
* Or, should Bebo’s founders and VCs distribute some of their $850 million equity windfall with Bebo’s content-generators?

2 Responses to “Question of the Day: Bebo & Profit Sharing”

  1. Content creating users are exploited, but they choose themselves. No one forces them, and no one scams them for the content.

    Users will start to think about where they contribute, and with what. That will make it harder to create valuable sites based on other peoples work, but it will not stop such sites from becoming successful.

    This is the way the world works, it’s nothing new. Everyone wants in when something suddenly gets valuable. The problem is that this is hard to know up front. Besides, it’s hard to become successful, otherwise everyone would have been at the top.

    Sites that base their content on productive users will probably have to start producing a lot of the content themselves. If they are successful, others might want to join in, but the best users will learn their value and ask for more before joining in.

  2. José Luis

    I can easily support either side (maybe even both sides).

    As you put it, it’s likely that artists helped in the growth of Bebo (and that deserves something). It’s also true they also got something out of it (hopefully public awareness).

    But, if we take this analysis to other examples, it doesn’t seem to hold:

    1) should google paid people for their content? After all, google is making profit of content created by others….

    2) should you pay me (something) for this comment? This comment is content, is helping develop a comunity…

    On the end, the only thing that seems reasonable is to consider that (likely) Bebo had a TOS and artists accepted it… And i think that if another model surfaces that better appeals to both business owners and users, then it will rapidly grow and wipe (or force to change) the rest.