GIFs Gone Wild: Licensing Uncensored · A.I. Royalty Rockstars

Aug '24 (edited) • Licensing Lingo & Stories

GIFs Gone Wild: Licensing Uncensored

Let's go back to 2013. The internet is drowning in a sea of cat videos and memes. But something's missing. Something... animated. Enter Alex Chung, a dude with a vision bigger than Kanye's ego.

💡 The Lightbulb Moment

Alex is chilling with his buddy Jace Cooke, probably arguing about whether a hot dog is a sandwich (it's not, fight me), when BAM! They realize finding the perfect GIF is harder than finding a needle in a haystack made of more needles.

Alex turns to Jace and says, "Dude, finding GIFs is harder than finding a needle in a haystack made of more needles. What if we made a search engine just for GIFs?"

Jace, being the supportive friend he is, probably said something like, "Dude, that's genius! Pass the Cheetos."

And just like that, Giphy was born and our dynamic duo stepped into the wild world of IP licensing.

But creating a GIF search engine is the easy part. Getting the rights to use and distribute all those GIFs? That's where things get stickier than a Post-it note convention.

🎭 Putting on the Licensing Hats

Alex wasn't just wearing the Talent and Connector Hat, he was bedazzling them. This guy had to create the platform AND figure out how to connect GIF creators with GIF users.

He was reaching out to content creators, TV networks, movie studios - basically anyone who'd ever made something move on a screen - to get rights to license their vids and stuff. I imagine it was like trying to herd cats... animated cats.

Jace started coding faster than a caffeinated cheetah, making sure those GIFs were loading as fast as Alex could bring them in.

Then they brought a third on board, Julie Logan. She was the one translating "legalese" into "GIF-ese", making sure Giphy wasn't just popular, but legal too.

At first, Giphy was handing out GIFs like Oprah hands out cars. Free for all! But soon they figured out real quick the value of IP.

And started cooking up licensing deals tastier than your grandma's secret recipe:

1. Monetary Royalties:

Giphy struck gold with API partnerships. Every time a big platform like Facebook or Twitter used their GIF library, cha-ching! 💰 We're talking millions in licensing fees faster than you can hit the "like" button.

2. Buyer Lead Royalties:

Here's where Giphy got sneaky-smart. They weren't just collecting cash, they were harvesting data like a farmer on steroids. Every GIF search? That's valuable info on user behavior. They were getting paid in both cash AND intel. It's like they found the secret sauce to the Big Mac of data collection!

Now, here's where it gets interesting, Rockstars. Giphy was playing both sides of the licensing game:

Licensors (The GIF Creators):

These were the content creators, movie studios, and TV networks. They owned the original content and were licensing it to Giphy. They were like the songwriters in Travis's music licensing examples, creating the hits that everyone wanted to play.

Licensees (The GIF Users):

Here's where Giphy got clever. They became licensees to the content creators, but then turned around and became licensors to the big platforms. Talk about wearing two hats at once!

And the Distributor Hat wearers? They were the messaging apps and social media platforms. Facebook, Twitter, Slack - these were the ones with the massive audiences that Giphy wanted to plug into.

Giphy struck deals faster than a contestant on a shopping spree game show. They'd say, "Hey Facebook, wanna serve up some sweet GIFs to your billions of users?" And Facebook would be all, "Does a bear GIF in the woods? Heck yeah!"

It was a win-win-win situation:

- Content creators got exposure (and sometimes cash)

- Platforms got cool content for their users

- Giphy got to be the middleman, collecting data and dollars like a squirrel on a nutty treasure hunt

🚀 The Tipping Point: When GIFs Went Supernova

2015 was the year Giphy went from "cool idea" to "holy guacamole, Batman!"

They licensed their API to messaging apps, and suddenly, Giphy was EVERYWHERE.

The numbers? Hold onto your hats, Rockstars:

- Daily searches exploded from 40 million to 100 million.

- By 2016, they were serving up 1 billion GIFs daily. If GIFs were dollars, they'd be making Jeff Bezos nervous.

- Their valuation skyrocketed to $600 million - enough to buy a small country or a really, really big boat.

🎭 Plot Twist: The GIF Hits the Fan

But it wasn't all smooth sailing in GIF-land. Oh no, we had more drama than a telenovela marathon.

Copyright issues? They had more of those than a college student has Ramin noodles. Content creators were coming out of the woodwork.

Then there was competition. Tenor swooped in like a seagull at a beach picnic, signing deals with Google and making Giphy sweat more than a snowman in a sauna.

🎬 The Grand Finale

Fast forward to 2020. Facebook (sorry, "Meta" 🙄) looks at Giphy and goes, "I'll take your entire stock!" Faster than you can double-tap an Instagram post, Giphy was sold for a cool $400 million.

Alex, Jace, and the gang had turned a simple idea into an empire.

They'd mastered the art of licensing, becoming the ultimate middlemen connecting GIF creators with the platforms that had millions of eyeballs, spreading their animated joy across the digital world like Nutella on a crepe.

So, next time you send a GIF of a cat riding a unicorn over a rainbow, remember: behind that tiny looping video is a little tale of licensing (dare I say) genius.

Now, if you'll excuse me, I need to go search for the perfect GIF to accompany this post.

Hope I find it.

To rocking’ those royalties 🎸💰🔥

Adam

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