Saturday, 2 December 2017

Lobster nets 1M to scale its user-generated content licensing marketplace

U.K. startupLobster is gearing up to scale its user-generated content licensing marketplace, as it closesa 1 million Series A. Its expecting to have closed out the roundnext week, with 85 percent of the funding committed at this point and onlyits decision on thelast fewinvestors outstanding.

Committed investors include KL10CH (aka The Key), a tech hub co-working space in Moscow, Russia where the startupsdev team is currently based; andNikolay Katorzhnov, the former CEO of Otkritie Capital, who is contributing 500,000; along with various other unnamed investors making smaller contributions. The remaining 20 percent of the round will be derived from U.K. and international angels, and follow-ons from investors in previous rounds.

The London-based startup, which was one of the 2014 battlefield finalists at TechCrunch Disrupt Europe, has previously raised around $700,000 in seed funding, including from Wayra UK, U.K. angels and via acrowdfunding route.

Its built a licensing platform with thepitch to its target brands/ad agency customers being to simplify legal useof user-generated content in their marketing materials by offering a low-friction way for them to locate and license themore authenticvisuals being shared on social media platforms(versus using tired stock photography).The business model is a subscription, with various tiers offered, including a month free trial as a taster.

For social media users aka Lobsterscontent contributors thecarrot is the chance to earn a little money on the side from their normal social mediaactivity.

Co-founder and CEO Olga Egorsheva says theSeries A will be going toward expanding boots on the ground in other countriesto drive marketing and partnership efforts overseas, with new offices plannedfor the U.S. and Asia. It will also befocusing resourceson AI-powered search, which it launched last year, aiming to enhancecontent-ranking andshow its customersmore relevant content.

This is really thenext step for us. Its really that moment where we start scalingnot only the contributor usage but the customer usage and we need to put some money in, some fuel in, to really make it take off in the key markets, she tells TechCrunch.

We have customers in the U.S., we have a few users in the U.S. and all over the world but we want to market more intensively in the U.S. to businesses, to different agencies and media creatives, and through API integrations.

Lobster also launched its firstAPI integration last week, with U.K. website builder Moonfruit, but is aiming to ramp up on this front too targeting10more suchintegrations in Q1-Q2 includingtalking to Adobe in the hopes of being able to plug Lobster into Photoshop in the future.

On the content front, itcurrently supports integrations withInstagram, Flickr, Facebook, Vk, YouTube and Vimeo, as well as allowingusers to makecontent available for licensing purposes via cloud storage providers such asDropbox and Verizon Cloud.

Users can choose to sync all their content automatically, or select specific photos and videos ora particular folder for licensingvia Lobster. The platform then indexes the metadata to power its search function, pulling in infosuch as hashtags, geolocation, titles, resolutions and so on. Egorsheva says their tech will alsoautomatically pull any newmetadata thats added to content in the future, meaningusers dont have to manuallyupdate any synced content.

Lobsters AI will alsoauto tag images to improve the quality of content tagging, as well assupporting other more powerful search features such as the ability to filter content based on a particular color palette (i.e. to match brand livery), or to upload aphoto to viewsimilar images in search results.

The AI can also identify faces, so customerscan filter for images with or without people, for example, and perform even more specificsearches, such as for different genders, ethnicities, ages and facial/emotional expressions.

TheAI-powered search alsoworks for video content, though this is one of the areas Lobster islooking to enhancewith thenew funding ideallybypartnering with anAI-focused startup that has built dedicated video search tech.

Part of [our current]AI is based on Stanfords technology which our tech team has adjusted to serve the social media field, and the database of social media that we have. The way forward as I see it is more in collaborating with industry players in AI, says Egorsheva.

Lobster nowhas around 17,000 people actively signed up to license their contentfromsites such as Instagram, Facebook, Flickr and YouTube, creating a poolofmore than five million pieces of content that itscustomers can browse, searchand license.

The platform is not strictly limited to this opt-inpool, though, as it also (at higher pricing tiers) offers a route for brands to reach out to any public user of thevarious social media platformsit supports to ask them tolicense specific content expanding its potential reach to some 30-40 billion photos and videos.

Itusesstandard, non-exclusive agreements for thecontent it licenses, in order to she says keep things simple, though it has manually agreed to a handful of exclusive licenses, andEgorsheva addsit may look to include an option forthat in the future if demand grows.

Pricing for content is automated by the platform, based on factors such as the source, resolution and whether the image has already been featured somewhere or not. And there are two standard types of licenses: one for content that gets less than one million views/plays; and an extended (and more expensive) license ifcontent garners more eyeballs.

Lobstertakes a 25 percent cut of any licensing revenue passing 75 percent to the content creator.Payouts to users are done via PayPal.

Another aspect of UGC licensing that theplatform simplifies is around model release (i.e. getting consent for anyone in the photos to their image being licensed for commercial use). Instead of requiring paper or PDF forms to be signed and collected by the content creator, itlets users share a link with their Facebook friends to authorize the usage of their image.

Its overallapproach of beingan aggregator and enabler, rather than trying to command a content repositoryof its own is its strategic advantage, reckonsEgorsheva.

Instead of creating another place where you would go and have to upload posts again were trying to uncover all that multitude of content that people already create, she says.

It also allows us as a platform to scale infinitely, almost, she adds. Because we dont store those images we pull the data, save the data and our search algorithm works with the data.

She also claimssocial platforms like the approach as it does not seek to draw their users activity elsewhere, and might even help them sustain users interest in posting to the social platforms if they aregetting some financial recompensefrom their activity, too.

Ive been offering revenue shares many times but the social networks and the clouds say that the engagement that they get or envision to get out of it is much more valuable for them.

At this point Lobster has around 30 customers, with clients including the likes of Hills Pets, Colgate Palmolive and their agency Red Fuse/WPP. (As you can imagine, Hills Pets was looking for cute photos of dogs.)

And while its currently focused on licensing visual content,Egorsheva says it could look to move into other areas in the future such as licensing user-generated music, via a platform like SoundCloud.

How much can content contributors make from licensing their stuff? It sounds as ifits mostlikely to be beer money (at least to social media users in the West), thoughEgorsheva says a userwhose content styleattracts the attention of an agency might be able to make a few hundred pounds (versus a few pounds or tens of pounds for others).

Still,Lobster is intended to be passive work, given its piggybacking on content a personwould probably be uploading anyway so its real lureisthe chanceof free money, at least for anyone actively uploading multimedia content to social media.

Its a good incentive that, by just connecting your accounts, and continuing to post as you usually do organically, you can earn for an extra cup of coffee or a beer, argues Egorsheva.

What we see in developed countries, in Europe and the U.S., is that the bigger incentive is getting noticed and getting into some agencys campaign and supporting the culture of not stealing or screenshotting images but legally getting permission, she adds.

Its very different for users in, for example, India or Eastern Europe, because for them this money naturally is a bigger deal So in them we see they are stimulated by earnings as well.


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