Recognizing Branded IP In Online Marketplaces: A New Offering From Source3
The world is full of creative uses of branded IP. We set out to recognize, organize, and analyze them.
There is a vast and fast expanding market in products created not by established brands or their licensees, but by individual sellers and makers. The exploding handmade/craft market is the most obvious genre of these products but the concepts extend to anything where creative makers are commercializing products via open marketplace platforms: from craft, handmade, custom-printed apparel and merch, to 3D printing, 3D animation, gaming, apps, and virtual and augmented reality content. Whether it’s a Deadpool onesie on Etsy or a 3D model of the Monopoly board, these products reflect both the world around us and the interests of consumers. Branded content is popular, exciting, engaging. That’s what amazing companies like Disney and Hasbro do, and that creative achievement shouldn’t be understated. It resonates with us; makers make and consumers consume accordingly.
YouTube proved that the products of creative individuals can have both niche and mass appeal, and in the aggregate become a colossal cultural force with third party IP playing a key role. Whether it was a song, a video clip, a video game, or something else, third party IP frequently was a major value add. The balance of sides was rocky. Open platforms like YouTube and modern creation technology meant that IP owners could not have absolute control over UGC creation. They could sue YouTube (and they did), they could send DMCA takedowns for individual videos (and they did), and with the launch of Google’s ContentID™ technology they could exercise options to track (leave it up but give me analytics; show no ads), monetize (put ads on the video and split the revenue with me), or block (take it down) at a granular video level.
But they couldn’t stop the flood of new UGC content. And it’s proved to be overwhelmingly positive: many superstar musicians actually earn more money on fan versions of their music than on official label released music videos. Beyond that, the UGC ecosystem fosters brand building and interest in the underlying IP. And the content owners hold the ultimate power to block any video they don’t like. It’s a beautiful system, and it was no small thing to put in place.
Many of our team at Source3 are ex-YouTube, on the rights management side. Myself and other co-founders came to YouTube as the founding team of their 2011 acquisition of RightsFlow, a company in the music licensing space. We were brought in specifically to solve data and operational problems around music publishing, an essential link in ContentID’s operations.
With the founding of Source3 then, it was only natural as we looked at the promise of the universe of Maker or User-Generated Products as analogous to UGC video and began to think in similar terms.
Today we announced the launch of our IP Recognition platform, designed to identify third party IP in marketplace products and enact downstream operations based on customized business decisions.
Before we get to the ‘how’ of this product, let me summarize the ‘why’: We believe the universe of creative maker products utilizing 3rd party IP is both a tremendous opportunity for monetization as well as brand insight, trend-spotting, and analytics. Our goal with this platform is to bring brands, marketplaces, and makers together, and each element should help each stakeholder better reach end consumers.
How We Do It
Our IP Recognition technology allows us to scan any product listing on a marketplace, where an uploader is offering a physical or digital item for public sale and determine:
- If the product contains any third party IP
- What that IP is, down to a remarkably granular level, thanks to our unique IP database (more on this later)
- Who owns the IP (and who owns the IP owner when applicable)
- If there are any business rules around this utilization of the IP (in the context of a license)
To accomplish this, we built a highly optimized network of automated matching, both on descriptive text and product images, and human review. Each content set is different and the goal of this product is to serve as many different varieties of products as possible, from a fairly straightforward product marketplace to a crowd-sourced video game development platform to a virtual reality environment. In each case we have an initialization period of setting content scanning parameters and tweaking match algorithms, leading up to an operational period where we process very high volumes of content quickly. The human feedback loop is essential both for training new use cases as well as exception handling and quality control.
Global IP Database
And while the technical ‘how’ of recognition is important, there is an equally important component without which all the recognition ability in the world would be useless. That is the underlying dataset telling us ‘what’ we are looking for. Source3 has invested substantial time and resources compiling a database on high-value IP, profiling in great detail the $260B global licensing industry, from entertainment characters to corporate brands to sports teams to fashion to celebrities and on and on. We think of this as “the universe of stuff that people might conceivably incorporate in a UGC product of any type.” We set a high bar for ourselves. We decided we needed to know not just the top ~5% of content that makes up the majority of uses but also to have deep enough coverage to understand the canon of popular culture content. We believe the creation of this database is unique, as it covers not just the top level concepts of a franchise, but gets very granular in organization. Yes, Spider-Man is popular, so we understand there should be an entry for Spider-Man. But beyond that, Spider-Man could be represented any one of a zillion ways he has been drawn through the years, in the comics, or animated in the movies. Or it might just be an image of his mask. Or the pattern on his costume. Or his webs. Or a famous quote (“with great power…”). And in order to effectively recognize that something related to Spider-Man appears in a marketplace product, we have to have organized and processed all of these concepts, mapping to a top-level Spider-Man franchise. For a nifty visual representation of this, see our illustration around Star Wars. Based on our research we believe this data set covers 90%+ of the IP used in the $260B licensing industry. And it grows and evolves daily as new content is created.
Engagement, Innovation, Monetization
We believe there is a wide range of uses for this technology and dataset. The ecosystem of UGC products is teeming with creativity and consumer excitement. It is explosively growing. The confluence of creative makers, amazing IP, and a well-optioned and well-informed consumer is a win-win-win. However in order to operate at scale an infrastructure is needed to connect IP to products and organize business rules. We believe there is substantial growth in this area over the coming years, especially as AR and VR applications grow. And beyond that, the brand intelligence that comes from understanding how consumers want to interact with properties (and understanding it on a very granular level) can help build and fuel engagement, innovation, and monetization strategies at a tremendous scale.