Businessweek Archives

Attributor Sells Video Fingerprinting Business to Vobile


UPDATE: After this post first went up, an Attributor PR representative contacted me to clarify that the company did not sell all of its video-only business to Vobile. So while the company did not provide details, it evidently still has some customers who are using its video fingerprinting product. Still, my sources confirm that the company sees little opportunity in video, and plans to focus on its text-based business. The PR spokeswoman also says Attributor ??as a clear path to profitability in 2010,?despite talk that the sale to Vobile is a sign of financial troubles.

One maker of anti-piracy software thinks 1,000 words are worth a lot more than a picture. Or even a movie.

According to three sources, Attributor Corp. is getting out of the market for video fingerprinting technology, which is used by studios to scour the Net to see who is watching pirated clips of their movies and TV shows. While Attributor will retain rights to the underlying technology, it has sold the customer contracts it has signed for a video-based product it began selling eleven months ago. Says one of the sources: “They’re retreating from video.”

Vobile and Attributor are both small and privately-held, but are movers and shakers in a market that will become far more important if moguls such as Rupert Murdoch get their way. The News Corp chief is reportedly threatening to put all of his content behind a “paywall.” That way, News Corp hopes to charge Microsoft for including its newspaper articles in results of searches done with its Bing search engine, while keeping those articles out of all Google searches. To be able to police such an arrangement, he’ll need some kind of fingerprinting technology to know who is reading what. “There’s going to be some real showdowns in the first half of 2010,” as companies that were kicking the tires of content management systems actually begin to deploy them, says Attributor CEO Jim Pitkow. He would not comment on on the Vobile deal.

While they sell similar technology, these start-ups have very different views of the market. Vobile believes the big money is in protecting content that’s worth big money—namely, highly-profitable movies and TV shows, which not only bring in millions of dollars of sales but also cost millions to create. For now, the primary focus of Vobile’s customers—a list that includes Disney, Fox and Chinese broadcaster CCTV—is on preventing piracy. The Chinese government, for example, chose Vobile to help CCTV make sure its official broadcast of the 2008 Olympics wasn’t pirated.

The way Vobile sees it, the place not to look for profitable growth is from text-based media companies—most of which haven’t been profitable since their newspapers and magazines (including BW) began giving away much of their content online a decade ago in search of advertising dollars.

But that’s precisely where Attributor has and will continue to focus. It has long been providing technology to the Associated Press, Reuters and others. Rather than stopping piracy, Attributor is focused on helping media companies get paid for their stuff—regardless of where it appears. Rather than insist that sites stop distributing their articles, media companies could insist on getting a cut on any ad revenues. In April, Attributor announced the Fair Syndication Consortium, which included companies interested in exploring the idea further. Pitkow says more than 80% of US newspapers are members of the consortium, as are 1,500 blogs, lyric sites and other publishers. “They’re all saying ‘wow, this is a new way for me to make money on my content,’” he says.

Speaking of making money, news of this sale—which wasn’t publicly announced—doesn’t inspire confidence in Attributor’s financial health. The company has raised plenty of money, but recently had a shake-up when CEO Jim Brock was bumped up to the role of chairman. Now Pitkow, one of the company’s founders, is running the company. He says the company is doing just fine, and has 40 customers. And he says video fingerprinting is not the opportunity the company thought it would be when it began calling on studios this past January. He figures the entire market for such technology is less than $15 million, in part because big content companies such as Comcast and Time Warner have opted to try and monetize content on sites such as TV Everywhere rather than let it flow freely around the Web.

On the other hand, he admits that he’s “under tremendous pressure to rationalize [the video] business.” As a member of the text-media business he’s now focusing on, I can relate. This happens to be the day when dozens of my immensely talented colleagues are leaving BW, as a result of layoffs related to our acquisition by Bloomberg (which officially occurs tomorrow). In the long run, I hope Pitkow is right that technology can power profitable new models for media companies.


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus