Any Web 2.0 rookie knows this problem, especially ones that build social networks. How much content sharing can we hide under the term “User Generated Content”? What happens if commercial content gets shared on your social network? Are you breaking the law? Can you get caught? what happens if you do? How do you sleep at night? And how the hell do you get your investors comfortable?

A classy case of analysis-paralysis. Where does commercial stop and user generated begin? What is the real value of user generated content and how, if at all, can commercial digital content be protected?

The sad truth is that nobody knows. In the meantime it’s all up to self rationalization and the size of your juevos. But let’s try to tackle this too for a minute.

The pure form of user generated content is what it is - new content generated by the users that share it. New songs, video clips, pictures, poems, blog entries, stories, you name it, as long as it’s new and as long as the owner voluntarily shared it. This is perhaps the pure form, but the one that represents a small portion of what the industry refers to as UGC. Very few sites stick to UGC only. eSnips is perhaps a good example of such a service, check out DJ and Remixing on eSnips and get a world full of user generated content. 

Then there is user manipulated content which is the widest grey area. User manipulated content is really commercial content generated by others, but after some editing which masks it as user generated. YouTube hosts tons of user-edited-commercial-content. Check out LeBron James on YouTube and MetaCafe and see what I mean. Even the headline for this post is a manipulation on original text by Douglas Adams.

Following that we have “Bloopers”. Content that comes from all different sources and that will never be commercialized, either due to “long-tail-hood” or simply due to inability to track. Such content is spread all over the Internet and will probably forever be classified as user generated.

Finally we have abused commercial content. Content that was DRM stripped and then distributed for free. The poor fate of Napster and Kazaa make it slightly more difficult to launch such services, but millions of SoulSeek and eMule users know it ain’t THAT difficult. With all the hype about iTunes, most teenagers still do not pay for their Britney Spears or Prison Break.  

Social networks face a big problem when it comes to content sharing. The first one is that no matter what they do, content sharing services can easily be abused. It is really, really, easy to strip commercial content of DRM (assuming it was technically protected in the first place). The second, and perhaps more significant problem, is that most users look for commercial content before they pay attention to the pure user generated one.

And how do we treat the grey area of user manipulated content - THE driver behind YouTube? Is that considered stolen? Do the original content “owners” have a problem with such manipulation? and how the hell can it be monitored? Fortunately for us armies of lawyers are about to clarify that for us… NOT!

Are you confused by now? Try reading the Digital Millennium Copyright Act (DMCA, download a copy here). It will confuse you even more.

So what should you do? The rule of thumb is probably to mix it up well, do your best and respond to the environment. MySpace and MyStrands offer a good mix. You can find a lot of commercial content hidden there, granted, but you can also find a lot of Indie, real, user generated music. YouTube is taking off stolen content by request and is in the process of signing media deals. MetaCafe is using algorithm and people in an attempt to keep the network clean. Effective? Somewhat. Keeps them same? Most probably.

So where is it all going? The legal system cannot keep track with technology. Any lawyer will tell you that. The “Internet Police” cannot keep up with enforcement, so in the short term it’s probably about blockbusters and titans. In the longer term, however, the simple truth is that digital media cannot be protected. Bad news? Not necessarily. In my humble opinion it will only redistribute wealth and benefit the artist.