Unless you spent 2006 literally under a rock or holed up in a Tibetan retreat, it was impossible to miss the advent of user-generated content in the kids and adult consumer space. Thanks to the likes of YouTube and user-friendly video editing software, millions of people morphed from content fans into creators seemingly overnight, churning out their takes on beloved animated TV and film properties and posting them online for the world to see.

Eventually that keenness to interact with and interpret IP will filter down into the physical realm. Licensors will have to confront the need to translate those fan desires into consumer products, while maintaining some semblance of control over their brands and copyrights. It’s early days yet, but some are on the path to doing it already.

Certainly the idea of enabling user-generated content has hit the mainstream in programming circles. The notion is that fans are doing it already, so why not provide them with access to select digital assets of the property and let them have at it, so to speak, in order to keep them connected to your brand and website.

Kidnets such as Canada’s Teletoon have run successful promotions based on this line of thought. The net received more than 290,000 entries for a 2006 contest in which kids created their own animated shorts using interstitial characters the Zimmer Twins for the chance to see their mini-toons on TV. And US giant Nickelodeon is getting into the game with its just-launched ME:TV block and upcoming series iCarly. Even notorious copyright-hawk Lucasfilm opened up the Star Wars vault last month and made UG-ready movie clips available to fans for the first time on the property’s newly revamped website.

On the flip side, manufacturing physical product based on IP-centered user-generated content is a tricky proposition. Every SKU, by its very nature, would be a one-off, making it impossible to achieve any kind of economy of scale and enter the mass market. And it might never work for large, long-established properties that simply have too much to lose in letting any possibly inappropriate fan-designed product into the market.

Then again, the rewards in terms of consumer loyalty can more than make up for the risk. While it isn’t dealing in entertainment-driven properties yet, Lego has been promoting user-generated product for the past two years via its legofactory.com website. As part of a promotion initially, the toyco set up a consumer-friendly digital design program and invited Lego fans of all ages to make up their own brick sets. These designs were put to a vote on the web hub, and the top 10 got incorporated into three packaged sets sold through the company’s direct retail channels, lego.com and its catalogue service.

According to Lego Systems director of brand relations, Michael McNally, Lego has since expanded the capabilities of the design program so that it now lets users choose from some 764 (and counting) styles of Lego bricks to build their own Lego kits and, most importantly, purchase their creations. ‘It’s moved us from being a company with 100 product designers to involving anyone who can build,’ he says. Also, once the designs are uploaded, other members of the Lego Factory community can view, vote on and even buy them. As the number of uploads approaches 200,000, McNally admits that not every user-generated kit makes it into the physical world, but he says the design-to-purchase ratio is improving.

Along with the complicated back-end fulfillment process that comes with letting fans make and order their own designs, there’s been a learning curve in terms of how to price the product. In the early days, says McNally, each digital design palette represented an assorted bag of bricks. Users would often pull bricks from several palettes and then balk at the US$300 price tag, not realizing they would have to buy the whole bag just to get one piece. Lego then moved to making more and more bricks available for individual purchase, driving down the costs of the finished product.

The plan moving forward is to delve deeper into niche groups in the Lego fan community to create themed design palettes and, eventually, themed retail kits using fan designs. So far, the company has started by reaching out to Lego train fans. Ten were invited to submit digital designs, and the resulting retail set that launched last year enabled the construction of 28 fan-generated models.

Of course, not all IP owners have the resources of a large toy company to throw behind their efforts. But smaller licensors such as New York’s Big Tent Entertainment are betting the same type of community drive to shape the brand will help their growing digital properties make the product leap. After all, as CEO Rich Collins explains, these IPs come with ready-made consumer bases that support and feel a sense of ownership towards the characters. Representing Japanese internet icon Domo, which has inspired some 400,000 fan-established sites and countless user-generated videos, the licensing and marketing agency is planning on integrating fan creations into its licensed goods offering.

At the beginning of the month, Big Tent opened up web hub www.domonation.com to serve as the jumping-off point for all things Domo. The site features community-inspiring basics such as regular contests, digital assets and news. The contests and community voting features will figure most heavily into the creation of user-generated product. Plans haven’t been finalized, but Collins intends to incorporate fan creations into DVD and publishing releases. For example, on DVDs for the upcoming Domo series, one episode out of five could be culled from the cream of the user-generated video crop, while a book comprised entirely of fan stories could work at retail.

While Big Tent hasn’t confirmed plans along these lines, there are also other UG-friendly categories popping up. Manufacturing fan-designed t-shirts, comics or posters through an online store wouldn’t be a stretch. Online services such as zazzle.com have been offering customized apparel for several years now, and in the adult space, there are a few user-designed t-shirt e-tailers cropping up, notably threadless.com. Community also drives this site, where members upload their t-shirt designs and others vote. The winners are then made available for purchase.

And then there’s also the possibility of creating a hybrid licensing program. Big Tent has forged several traditional licenses for Domo, including a master toy deal with Deerfield Beach, Florida-based Play Along Toys. At this stage, the toyco isn’t contemplating any kind of one-off strategy. But VP of marketing Susan Evans says the plan is to launch with toys that let Domo fans continue to manipulate him as they see fit. ‘We don’t want to inhibit their passion for the character,’ she says. So the toyco’s putting three sizes of unadorned Domo plush into specialty retail this summer that fans can dress up and pose – a make-your-own play pattern, or in digi-speak, a user-generated experience. How very old/new school.