AOL Video Cuts Free Its UGC Dead Weight

Updated: AOL Video will stop supporting user uploads next month, showing once again that hosting video is a thankless, expensive and undifferentiated task. According to an upcoming letter to users published by TechCrunch, AOL is telling video uploaders to transfer their clips to Motionbox, the startup that’s stayed focused on the personal video market even as others have hightailed it out or diversified. But there’s an unmentioned catch: Motionbox charges for anything past a limit of 750 MB.

AOL will delete all existing user video uploads on Dec. 18. The portal follows smaller players like ManiaTV and Grouper/Crackle in ditching UGC. But those folks at least had a reason: They changed their focus to exclusive web originals.

In this economic climate, you don’t need to make up a reason to drop a feature, but for AOL, this seems like a silly way to cut costs. If you’re truly pushing your overall platform as a default, there should be a way for users to post videos without leaving to log in somewhere else. But it’s also an ominous sign that simply hosting a few user videos is a significant enough diversion of resources to be considered worth cutting. The cost of running a video service is pretty high, regardless of how cheap everything is getting.

And, reality check: YouTube has 44 percent of the U.S. market, according to comScore. AOL has only lost ground on this list, and is now at 0.8 percent of the market, below Time Warner’s Turner and new entrant Hulu. That war wasn’t winnable.

AOL Uncut first launched in May 2006, powered by VideoEgg (which at the time made a little uploader helper thing and white-labeled video hosting for social networks…it later changed tack to power advertising and dropped most of its early customers). As for AOL, Uncut was later incorporated into the rest of AOL Video, which focuses on video search (from its Truveo acquisition) and syndicating premium content (for instance, it is one of ABC.com’s two revenue-sharing partners, with Veoh). On a semi-related note, VideoEgg still powers video uploads for Bebo, which AOL bought earlier this year.

In two and a half years, user-generated video has gone from a must-have me-too feature to a dead weight getting cut free. Meanwhile, it’s yet another reality check for the other plain-old UGC portals in the market, cause it’s not like YouTube’s going to stop accepting free user uploads anytime soon.

Update: Motionbox emails to say it is offering a better version of its free service for AOL users, including unlimited transfers and uploads and a raised per-upload limit of 100 MB. The company will also give AOL users a $10 discount off its $29.99 premium service.

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