During a phone conversation with my dad last week about why so many Americans are buying English premier League soccer teams we got talking about the really high amounts of money being spent on these teams. As I started to pontificate about how these owners could recoup their money, I realized that what I was talking about was the future of social media. It is my belief that over the next 18 months that people will migrate from large general social sites like MySpace to niche sites that are built around their common interest or passion.

Let me use one of the most famous soccer teams in the world, Manchester United.  For those of you have not heard of Man Utd, think New York Yankees. A very famous team that has a rich pedigree of winning trophies. Man Utd has 75 million fans worldwide and I am sure that there are numerous fan sites online.  Now imagine if all those fans belonged to one group on one web site. An official Man United social network where members can watch games and highlights and chat with fellow Man Utd fans with the same level of passion.

In the last couple of months I have noticed the establishment of more and more niche social networks like care2, Ballhype, Hugg, and Tweako. People are  migrating to these sites because they are built around their common interest or passion. At the moment people use sites like MySpace, Yahoo Groups and Facebook to keep in contact with friends and to belong to groups that interest them. The logical step is for them to skip joining MySpace and instead join a niche social group that interests them directly.

When Rohit came up with the original 5 rules of SMO, one of the rules was:

Help your content travel. Unlike much of SEO, SMO is not just about making changes to a site.  When you have content that can be portable (such as PDFs, video files and audio files), submitting them to relevant sites will help your content travel further, and ultimately drive links back to your site.

A niche social market can take Rohit’s idea even further by formatting content so that users can receive it any way they want. In this example I can read, watch, interact with my Man Utd site via my computer, TV, cell phone, blog, email, etc. My content can be customized and delivered to me in whatever format I want. For Man Utd, the cost to customize is inexpensive because they own the content and the delivery modules. Sending a daily update to cell phones is a technology problem not a content or sales problem.

In expanding the original 5 rules Carmeron Olthius added these rules:

Participate – Join the conversation. Social Media is a two way street, lets not forget that. By conversing with the community you are creating awareness and prolonging your buzz. You are keeping it going and this often results in a snowball effect. Participating helps your message spread further and faster.Know how to target your audience – If you don’t even know your target audience you are in trouble. I would love to have everyone using my product too, but you need to be realistic. There is always going to be a certain audience you can appeal to and others that you can’t. So know your appeal and who it is appealing to.

Create content – There are certain kinds of content that just naturally spread socially. It does not matter what industry you are in and what boring products you sell, there is always some kind of content that can be created that will work. Whether it is creating widgets, making people laugh, or writing a whitepaper, it can be done. Know what type of content can work for you and create it.

All of these rules are principles that most brands or companies could follow in starting up their own social network. So why would Man Utd or any brand want to create its own social network? Because it has a passionate audience that is interested in its product or service and the company (Man Utd) can control the content being delivered.
For many companies the biggest concern they have with social networks is that they do not get to control the message. You, the users do. With a niche social network, companies will be able to regain control over the message and content. Whether this is a good thing or not is for another conversation.

The other reason someone like Man Utd would create its own social network is revenue. They cannot do this at the moment but there will come a time Man Utd will own the broadcast rights to its games. In the U.S. that is something baseball teams have; teams like the NY Yankees and Boston Red Sox have created their own cable network to distribute their games.  Using social networks is the next evolution.

By owning the broadcast rights Man Utd will be able to broadcast its games online via its social network to fans worldwide.  Man Utd plays 25 home games a year (50 games total) and let’s say that they are able to broadcast all their home games to members of their social network for a small fee $4 a game, $100 a year. Suddenly a Man Utd fan anywhere in the world can watch his or her favorite team in how they want to, when they want to. If only 1 million of Man Utd’s 75 million fans worldwide signed up that translates into $1 billion dollars in revenue a year!  And I would expect that a membership would cost a lot more than $100 a year!

For a company, or brand with a loyal passionate following, having its own social network will provide them with tremendous opportunity to interact with their customers, to continue and grow their brand loyalty and to regain control of their messaging.

And it is not just sports teams that will be taking this step. Look for companies like P&G to develop consumer social sites built life cycles. This is s strategy that the knot is using to great success with its social network site TheNestBaby.com. The social network landscape is undergoing to fundamental switch and the companies that can navigate the successful launch of their own social network will enjoy a competitive advantage over their competitors.

For those companies or brands that can find a way to monetize their social network the subsequent revenue stream could be worth billions of dollars.

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