Facebook Buys Source3 to Strengthen Rights Management

Facebook just purchased the technology of startup Source3, which can detect intellectual property that has been shared on the Internet without permission.  No financial details were revealed, but Crunchbase reported that Source3 recently raised $4 million in venture capital funding, led by a 2015 seed round by Contour Venture Partners. Two years ago, Facebook released so-called Rights Manager technology to combat the posting of video clips by unauthorized users. YouTube uses Content ID, a similar but more advanced technology.

Recode reports that, “in April, Facebook added another option for rights holders: Leave the content up, and make money off the views that these pirates are generating for you.” The company’s push to improve rights management is, in part, because it would “ultimately like to be home to lots of professionally produced video, which is why it’s paying publishers and movie studios to make videos exclusively for the social network.”

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Source3 founders Patrick Sullivan, Ben Cockerham and Scott Sellwood sold RightsFlow, a similar rights management technology, aimed at music, to Google in 2011. Source3 “will be fully integrated into Facebook” and some of its employees will join Facebook and work out of its New York office.

TechCrunch reports that Source3 technology can “recognize brand IP in user-created content and commerce marketplaces, allowing brands to measure their presence or take action against infringers of their copyrights and trademarks.” Source3, founded in New York in 2014, was “originally … a 3D printing rights management company,” but pivoted to using its technology for digital entertainment “after 3D printing plateaued in the consumer market.”

Facebook stated plans to build “a special standalone app just for creators to share content with their fans,” and the Source3 acquisition can be seen as the company’s acknowledgement that it must offer such creators a stronger guarantee that their content will not be pirated. Source 3 technology can also be used “to recognize brands worn or used by these web celebrities, and connect them to those brands or similar ones to strike sponsored content or product placement deals.”