A year ago, image licensing platforms Shutterstock and Fotolia – both user generated content platforms – secured an IPO and substantial private equity (respectively). At the time this signaled a resurgent interest in photography business models, no doubt tipped off by Instagram’s $1B valuation and acquisition by Facebook. Today, this interest is materializing in the capitalization of a few seasoned startups in the image industry. It’s an odd array of similar-yet-divergent value propositions and models, but they all seem to be vectoring toward monetizing UGC from mobile within the commercial licensing industry.
The activity seems all outside of the US, where conditions in getting user traction and (against US trend) seed capital might have been more favorable in recent past. Finland’s Scoopshot, who cleverly leverage Twitter in a ploy to aggregate news imagery, secured $1.2 last month. Swedish company Foap built a mobile photo app enabling a photographer to sell to an end user, and recently secured $1.5M in capital for pushing its 5.7M images out into the US market. German company EyeEm, billed as Europe’s Instagram, secured $6M to exert its collection as well as leverage their own visual recognition technology. The most recent winner is Toronto-based 500px (who have built an extremely popular destination around best of breed/curated content) and have been pivoting toward commercial licensing for a while – it secured $8M to go full throttle.
While this level of capital isn’t a massive windfall, it is a story line that continues across many other startups who have focused on mining photo apps for end use licensing, and other outliers with similar models. They all seek to displace brick and mortar mainstays who have been unsuccessful in mobile aggregation for their market. Engagement and education of mobile photographers to make available their property for end use commercial licensing is fraught with hassle, and the return compensation is low enough to be a barrier for any involvement.
Where there has been decent coverage around investment, other startups have been flying under the radar. Snapwire, an angel-funded startup with the simple proposition of mobile aggregation for end use licensing (via a request platform), has been modeling their message around empowering the mobile photographer to monetize – there’s no subtlety (or aggregation pull) in pure commercialization, and Snapwire is quick to convey a deeper connection to mobile photographers via creative collaboration and pure photographic passion. Snapwire joins already existing ImageBrief, a request platform launched with DLSR-pros in mind and now certainly less agnostic about method of capture. Any UGC business knows that the joy and discovery in applications such as Instagram is a key component to participation, and critical in the success of any UGC startup with an eye toward the transfer of rights required for commercial licensing.
There are enough lessons learned from the first wave of UGC (iStock, Shutterstock, Fotolia) to apply to mobile capture. First wave aggregators did a good job of expanding the market by making content more accessible (i.e., cheaper, faster), but fell short on innovating on the supply side – particularly in the realms of content curation and mobile. The second wave of UGC – squarely focused on mobile – might benefit from the lessons of the past. Even though they face a crowded market with overlapping value propositions, they’re intent on making inroads to the millions of new and emerging artists, empowered by improving image quality on the cameras they carry in their pocket.