By Amit Roy Choudury

THE demand for user-generated content (UGC) has been growing rapidly among Singapore's 'netizens' in recent years with video-sharing sites, social networking sites (SNS) and blog sites remaining the most sought after, according to a new study by Frost & Sullivan.

Speaking to BizIT, Frost senior industry analyst Krishna Baidya said five out of the top 10 most visited sites of Singapore fall in this category.

They are: YouTube, blogger.com, Friendster, Facebook and Wikipedia. 'YouTube's position at No 3 in that list (of top 10) reinforces the growing popularity of user-generated videos among users,' Mr Baidya said.

The Frost study noted that mobile operators around the globe are enthusiastically exploring UGC in a bid to make money through low-cost, but effective, entertainment services.

UGC is also gaining a lot of traction in Asia.

Singapore's MobileOne last year launched a user-generated video-sharing service called MeTV. The service allows mobile subscribers to upload their videos through MMS-enabled handsets for other users to view and download.

Taiwan Cellular has also introduced a similar service with the same revenue-sharing model in Taiwan. PCCW in Hong Kong launched a photo and video community service called 'snaap'.

The service allows users on the Internet, mobile, broadband TV, and residential fixed-line service to view photos and videos.

Mr Baidya noted that as mobile devices (especially smart phones with video capabilities) offer convenience to subscribers, not only in accessing such sites but also updating and interacting with other users on the go, the spill-over effect on the mobile environment is obvious.

'Mobile operators are the first ones to gain from this trend as it will increase mobile data traffic in their networks. They are also likely to take advantage of advanced analytics and personalisation tools to push relevant advertising to mobile users.'

Commenting on the M1 service, Mr Baidya noted that it launched its MeTV service in January last year and StarHub joined hands with M1 to bring the service jointly to a broader subscriber base.

The service was announced in June last year and made available in the third quarter of that year.

Uploading a video clip is as simple as sending an MMS to a designated number with no charges involved, Mr Baidya said.

'Users are rewarded when other users download their uploaded videos. Hence, the service was launched to attract users to share their photos, videos, comments with others, and in the process be rewarded for their efforts. The top 50 videos from the site are also featured in StarHub's digital cable HubTV channel,' he added.

Mr Baidya noted that in May this year, Friendster, the No 1 social network in Asia-Pacific, launched its mobile site m.friendster.com, and is currently working with mobile operators to launch text alert services for friend requests, messages, bulletins, etc, in the coming months in Singapore.

'The popularity of such SNS benefits the mobile operators as it will help them in growing their data revenues. Friendster access on mobile has gained good traction in Malaysia, the Philippines and Indonesia.'

He added that in emerging markets where Internet penetration is still low, mobile phones are fast becoming the default platform for Internet access and interaction with other netizens.

'In our opinion, mobile UGC in Singapore is still in the very nascent stage, although there have been some initiatives recently by SNS and mobile operators to make inroads.'

He added that the growth prospect for such services in Singapore is somewhat limited by the lack of local content, user attitude and subscriber base.

'In order to encourage mass adoption of such services, mobile operators will need to bring mobile Internet access charges (data charges) to a more affordable level. They could also push relevant advertisement-funded content to users for free to accelerate adoption.'

He noted that in a competitive mobile environment, operators are always exploring new avenues to establish new revenue streams.

'Mobile Internet, driven by UGC and SNS, is one such avenue with great potential. Mobile operators immediately gain from the increased data revenue.

'In order to monetise the surge in mobile Internet traffic further, operators are likely to adopt innovative business models such as mobile advertising and location-based services in the near future.'

He added that with sharply rising interest in video content generated by users, netizens in Singapore are likely to seek higher bandwidth to enjoy smooth, uninterrupted video online.

'Singapore's Next-Gen NBN (Next Generation National Broadband Network) initiative is a much welcomed one in this respect as it brings the promise of higher access speed at more affordable prices to the end consumers.'

The Frost study noted that while social media and UGC are important components of the overall online media market, revenue accounted by this segment remains insignificant in comparison to the overall revenue generated by the content industry.

'Hence, to monetise UGC, especially in the mobile environment, operators would require engaging and targeting new audiences and exploring new opportunities,' Shaker Amin, an industry analyst with Frost, noted.

He added that they must realise that what works online may not be relevant to the mobile environment, and hence, more in-depth understanding of its targeted customers is crucial, as they could be very different from online users in terms of both usage and spending patterns.

While the UGC market is exploding online, it is moving much more slowly in the mobile environment, Mr Amin noted.

'The key to monetising mobile UGC would be to provide content that is exclusive, and offers personalisation and individuality as value-adds,' he added.

This article was first published in The Business Times on 14 July 2008.