Facebook needs a lot of content, and one thing that’s slowing it down is the risk of piracy while sharing content on the network. Thus, to help content creators monetize their work and at the same time handle piracy-related issues, Facebook has acquired Source3, a content rights management startup.
Why Facebook needs Source3
Facebook is diversifying from just being a social networking site where people can peek into the lives of others, to a one-stop solution for various needs, be it news, entertainment, etc. But to keep users hooked, the company needs quality content, and to get it, it is important that content creators get paid well.
The company is also making huge payments to publishers and movie studios in exchange for exclusive videos for its network. However, content creators may hesitate to offer their content on Facebook if people can easily steal it.
Pirated content has been a pain for Facebook for quite some time. About two years ago, Facebook announced a technology that could detect and remove video clips that were posted by someone other than the person or entity that owns the rights to them. This technology called Rights Manager is similar in functionality to YouTube’s Content ID, although the latter is more advanced.
However, the Source3 acquisition makes it clear that Facebook hasn’t been very successful at its attempts to counter piracy so far.
In a statement to Recode, a Facebook spokesperson said, “We’re excited to work with the Source3 team and learn from the expertise they’ve built in intellectual property, trademarks and copyright.”
Very serious about content
Source3’s technology helps in recognizing brand IP in user-created content and the commerce marketplace. This has enabled brands to take action whenever anyone infringed upon their copyrights and trademarks. Source3 can help Facebook improve Rights Manager by blocking an unauthorized upload, charging some fees or taking some revenue share from such content, notes TechCrunch.
“At Source3, we set out to recognize, organize and analyze branded intellectual property in user-generated content, and we are proud to have identified products across a variety of areas including sports, music, entertainment and fashion,” the startup said on its website. Source3 employees will be working from Facebook’s New York office.
Source3 will reportedly cease to exist as a standalone company after the acquisition. Its website and Twitter account have been taken down, notes Recode. The terms of the deal have not been revealed, but there are reports that Source3 has raised just $4 million in venture capital funding.
Facebook is getting pretty serious about content on its platform. At VidCon last month, the social networking giant announced that it is developing a separate app to help creators share content with their fans. Facebook and its 2 billion monthly users is already the biggest audience, and thus, its investment in content-related apps and companies is justified and is the need of the hour.
On Monday, Facebook shares closed up 0.95% at $166. Year to date, the stock is up more than 44%, while in the last year, it is up more than 37%.