GumGum Intends to be the “iTunes of Content”

GumGum is a new license management solution for content owners that its founders say solves a serious problem with online content distribution. “Offline, content is licensed for a finite period of time to a predictable audience. These parameters enable content-owners and publishers to come up with reasonably good pricing arrangements,” writes GumGum’s founders, Ophir Tanz and Ari Mir, on the company blog. “On the Internet, however, content lives forever and usage is unknown. And herein lies the problem: How do you fairly price a license when circulation is unknowable?” The pair say that GumGum provides the solution via per usage licensing agreements.

GumGum’s answer to the problem of how to license content online is to use the CPM advertising model in reverse. When publishers license content for online publication via the system, rather than get access to the original source, publishers are given an embed code. GumGum uses a flash applet to display the image and track pageviews, and then bills the publishers on the CPM model (usually a few cents per thousand views). Publishers also tell the service where the licensed content will be displayed, so that it can only be embedded on a single web site.

The model also supports advertising-based licensing agreements, where publishers get access to photos for free in exchange for the display of overlay advertising (it appears, via VideoEgg). The photo below was licensed using the advertising model.

As you can see, right clicking on the photo displays the copyright information as well as a link to license the photo, which Tanz and Mir say makes every licensed photo a viral vehicle for promotion of that content.

“When an industry attempts to apply a decades-old business model to the Internet, without accounting for the very real ways in which the Internet is different, the results are generally disastrous,” says the company on their blog. Though in reality, the GumGum model is basically the old hard copy licensing model with a real-time spin (i.e., rather than charging in advance based on the number of estimated readers a newspaper has, the number of readers is calculated exactly as those readers view the content).

GumGum is most comparable to PicApp (previous coverage), who licenses content strictly via an advertising model. GumGum has deals in place with several entertainment-focused photo agencies including X17 Inc., Pacific Coast News, Celebrity Home Photos, and Star Max Inc. Their advisory board includes a couple of impressive names, David Sacks, formerly of PayPal and current CEO of Geni, and Michael Jones, CEO of Userplane and VP AOL.

GumGum’s platform currently supports licensing for photos, but the company plans to expand to video, audio, and textual content in the future as part of their plan to “be to content what iTunes has been for music.”

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