I’m fascinated by the economics of image sharing sites. They fill a fundamental need to share images across other platforms but they seem expensive to run and difficult to monetize.
Have there been successful image hosters that weren’t just spending money to capture users in order to sell out or eventually enshitten (imgur, giphy, imageshack)?
Shutterstock is selling prints so it will be interesting to see what they do with giphy.
I remember when Imgur started and they were really nice and seemed to be a low cost (I think only one employee) so they could host barebones without making the experience bad for users (ads, data mining, etc).
I think the promise of giphy was that advertisers would pay for sponsored gifs. So The Voice gets top placement for “wild crowd” gif and then gets shared X,000,000 times in a native way.
It’s a sensible thesis that appears to be invalidated for now.
I agree. It's interesting because nearly all the GIF searches I use on a regular basis are terrible, yet I wouldn't be too perturbed if I were given relevant/funny/interesting GIFs that contained product placement (say, a GIF for "cheers!" might be someone raising a glass of Coke).
I think the problem might be that advertisers can't control context. Someone might say something vile (but legal) on Twitter and get lots of meme GIFs in the replies that advertisers would be very unhappy about, and it's a more direct connection than having your sponsored tweet appear in the chain.
A gif sharing service could provide code to the big embedders (ie. twitter, facebook, whatsapp) which scans for bad words and phrases and decides if a particular gif is to be suggested for posting in that particular conversation. If the conversation isn't advertiser suitable, the user just gets to choose from mundane non-branded gifs.
That should be enough to satisfy most brand advertisers.
That reminds me of how unnaturally “Baby Yoda” spread. They show it one time and suddenly it was all over Reddit (which didn’t shock me, they’re the textbook example of consumer), Giphy, Imgur, etc. Including scenes that hadn’t been revealed yet.
I can only imagine that Disney put some big bucks into advertising to help pivot the SW IP away from the sequel trilogy before additionally pushing hard on their streaming service.
I also imagine Disney made far, far, far more money from any deals with Giphy than Giphy got from Disney. Hence why they’re being thrown around like a stuffed toy.
I think giphy more tried to play the analytics tracking angle. They made it prohibitively difficult to right click > copy .gif url from their site seemingly so they could control sharing through trackable means
Right. the reason why Facebook wanted Giphy was because they can use that to track users and develop deeper profiles to better sell ads to corporations. eg User searches for "drink", and chooses from a picture of Coca Cola or Pepsi, but chooses Pepsi. Coca Cola'll pay to advertise to current Pepsi drinkers.
Advertising within the seller doesn't help "the ecosystem". (auditing, Ad networks, clearing house, more auditing, nsa-ish, etc)
If facebook kept it and integrated on whatsapp (their only upward active user product) then they would sell ads there and that's it.
With them forced to sell to a 3rd party, now that 3rd party will have to offer reverse auctions like every other publisher. Everyone will get their sweet stream of user profiles and "the ecosystem" will be happy. It is very much not invalidated now.
Just remember the prices for AWS, CloudFlare, and GCP are for application software. Raw bandwidth are a lot cheaper when it comes to content focused CDNs and dedicated hosting.
And this is exactly where IPFS makes sense for me. As long as the community wants something to exist it can exist for free. If only you want it to exist, host it. When you no longer care, it will exist until no one hosts it anymore.
If this were the only option, I bet most people would realize how much of the web really doesn't benefit them in any meaningful way, but merely gets used because it's there, and can be removed from their lives with minimal grief
Shutterstock is selling images with license (!), that's certainly a more stable business model than "crowd-sourced image-hosting".
Giphy seems to become a advertising platform itself, with advertisers using it as part of viral campaigns (i.e. have related gifs available when launching a movie), although I doubt that created alot of revenue so far.
That said, it's striking how well-embedded giphy is across a huge amount of messaging platforms, which is likely their biggest asset today...
Shutterstock and Getty are both well positioned to sell pre-trained (on their own data, natch) generative models to customers, who can then fine-tune with their own datasets. I think the market for "pretrained models with guaranteed no IP issues" is going to be lucrative. Maybe not enough digits to excite VCs, but more than enough to make up for a decrease in demand for stock images.
> "pretrained models with guaranteed no IP issues"
The problem is that even if Shuttertock train model on the images they routinely sell it doesn't mean it's going to be free from IP issue. The subtleties are going to vary widely between jurisdiction, but it's not like Shutterstock was the author of most of the images in its bank: most if not all the pictures there have been taken by third party photographers, who (at least in some jurisdictions) keep the entirety of the copyright over their creation. So if court ends up ruling that images generated by ML models trained on copyrighted material is plagiarism, then Shutterstock will be plagiarizing their own suppliers.
Then maybe now their contract terms include a license to do so, but I'm pretty sure their old contracts did not, and even now, the said contract has to be ruled valid by a court.
In the US, where the big international players are, the legislator will probably shape the law in their favor (and against the photographers), but in many countries, where photographers are the actual business and where Shutterstock and others are just foreign service provider, the legislator can be tempted to protect the local businesses against Sutterstock.
It's going to be a mess in the next few decades (but IP has always been a mess, that's what happen when you artificially construct an exclusive “property right” out of something immaterial: intellectual property is trying to get a square peg in a round hole)
Was curious as well, so I looked up their last investor report. In 2022 they had 24% profit growth, with $32.8m on $215.3m revenue.
They invest alot in AI image generation as well, and already offer a commercial product.
For their big customers their product might be the best of both worlds: AI-generated images based on prompts, with full legal clearance on use.
I doubt a marketing department of i.e. HP wants to risk a legal dispute about some image they used because it was generated by a model which was trained on unlicensed content.
Once this scenario is legally solid though....yes, I wonder how well Shutterstock will do...
I'm sure its been done (I'm guessing many times) but my thought would be to have a free service that auto watermarks all images with the image hosts domain name and upsell a paid account that doesn't watermark images. If you get 0.01% paid and keep costs low by shopping around for CDNs I think it could be a good "lifestyle" business as long as you had some kind of auto moderation system.
WhatsApp used to charge $1/year before the Meta acquisition. If you could convince people to pay $3/GB, that'd be enough to front the content with Cloudflare and store the data in the Internet Archive forever. Still need to solve the moderation problem, but it isn't impossible.
If people are paying to host the material, isn't what they host on them?
You could even have a lawyer add something like, "You are purchasing hosting rights for yourself and therefore take all responsibility for what you host. We will work with any relevant government authorities whose jurisdiction you are under to provide them information of your activities on this service if the products you provide violate local, state, or federal laws. You agree to post nothing illegal and if you violate that you agree to own all responsibility, legal, personal, or financial, for your posted materials... blah blah blah"
And then submit everything posted to csam scanners.
> We will work with any relevant government authorities blah blah blah
the problem is that costs money. you either pay the staff to do the moderation at upload, or you pay the staff to handle all the various governments that come after you. either way it's expensive, but dealing with the government's lawyers is probably more expensive. and no, just running through a CSAM scanner isn't nearly enough.
Shutterstock sells stock photos. They have an excellent inventory and good prices and I've bought plenty from them in the past for web projects.
But.. their business just went down the plughole with the advent of text-to-image AI. Now you can get pretty much exactly the image you needed without having to spend hours trawling through pre-made photographs.
And it's extremely funny since most of these text to image models were container Shutterstock watermarked images, to the point it thinks humans see the world with a big shutterstock watermark across it with certain prompts.
Microstock was certainly a mini-rage for a while. All the photographers I knew who played with it got out pretty quickly. There was very little money in it (I played a very little and don't think I ever sold anything.) and a lot of classic stock photography of people requires model release forms.
There's always speculative value because some executive somewhere thinks they can turn it around and make it profitable. So it can keep being flipped across different owners. It can go infinitely because the cash comes from elsewhere.
it's essentially just burning through VC money to provide free image hosting. every time the funders start trying to make their money back, somebody will start a new free image host funded by a new batch of suckers.
My guess is that someone will eventually end up creating a bootstrapped lifestyle business, similar to craigslist.
Assuming they don’t encrappen it, and there’s some tangential thing they can charge a nominal fee for that rides their network effects, they’ll have a lasting business that will provide ~5-10 people with comfortable income indefinitely.
I don't remember all the details but imgur used to have some pretty strict limits. iirc you could only upload 250 images on a free account?
I was wrong. It was worse. 75 was the limit for free users. I think I never reached the limit until they upped it to 225.
> In order to get ready for upcoming features, the number of recent images a regular user can have in his/her account has been raised from 75 to 225. Keep in mind that you will still be able to upload more if you go over the limit, it’s just that the older images will be hidden from the account (not deleted!). This is great news, because now you can create even more albums and share all your images at once.
> Also, imgur pro accounts have just been made cheaper! A 1 year imgur subscription is now cheaper than any other comparable photo service, including Flickr, Photobucket and ImageShack. With imgur pro, not only is there no limit to the amount of images you can have in your account, there is absolutely no compression, and your images are not modified in any way if they are under 5MB in size.
that was only ever a restriction if you were trying to upload images to your profile and direct people to your profile to see the images you've uploaded. which isn't a thing i've ever wanted to do.
if you were just using it as a image host for sharing images on other sites, it worked perfectly fine without an account. now they've crippled that functionality because they want to make money.
Not a general pure image sharing site, but one dedicate for wallpapers (and more) for your personal device (ie your phone), but Zedge did/still provides sharing UGC (user generated content) and as well a premium service for artists.
They are in the margins of positive income at least last I checked.
If you've used Giphy, you may notice a ton of the gifs are from the CBC show "Schitts Creek". It seems like their media team did an incredible job clipping up the show and uploading a ton of high quality gifs to the platform. I'm reminded of the show almost everyday when searching for gifs. It's likely a (relatively) low effort, high reward piece of marketing.
I think some of that may just be how _well-suited_ Moira and David in particular are to that sort of use. You also see a lot of reaction gifs using Lucille from Arrested Development, who's very much the same archetype as Moira.
Yes, but the format is very professional. It always includes the text, with some words emphasized in yellow. These are done intentionally, not just someone clipping a youtube video.
I think that it’s also to do with how visually exaggerated the four main characters on the show are. That style of acting leads to some great gifs that don’t need context.
I’m trying to remember if it was giphy that if you search for Star Trek, 90% of the results are Star Trek Discovery gifs.
I guess deals with a given id holder was one way to monetize this sort of service, and totally stifle the organic weirdness and randomness at the same time.
There's a few shows I've checked out solely because I've seen so many reaction GIFs and stills from them. ("Community" comes to mind.) If your show lends itself to the format, it does seem like a great way to market it.
Not the OP, but I see a ton of Schitt's Creek "reaction gifs" on Twitter replies, which are usually embeds from Giphy. The most common ones are SC, reality TV, maybe the Office US.
I see Schitt's Creek and a few other shows, where a high percentage of the gifs have the same logo in the same spot and/or identical, fancy, pop-in captioning. They seem to be "official" gifs of some sort—I'd just assumed it was a pay-for-placement kind of thing. Also, sports gifs, where it's some player in their jersey saying something, often in front of a white background, and there are a ton of them and they all look like they were captured in the same shoot—identical framing, lighting, everything—and I find it unlikely ordinary users found some video like that and cut up every single player's segment into gifs. Those also seem like some kind of official effort.
Just search for an emotion: confused, amazed, enraged, bitter, insulted, offended.
For all I've listed, Shitt's Creek watermark is visible near the top. That said, it's not the worst one. While I experimented with such prompts, I've seen a lot more (HBO) Max watermarks, but they don't do show-specific watermarks.
The CMA's order for Meta to sell Giphy after the transaction had already closed will go down in history as one of the biggest, most mind-boggling examples of regulatory overreach
Their whole argument was based on the fact that Giphy was CONTEMPLATING expanding their advertising business to the UK so the acquisition could hurt potential, future competition. Give me a break
As far as I can tell, the watchdog and CMA started doing their job immediately when the news of the acquisition broke. Then three years of back and forth and legal appeals followed, and now Facebook has finally lost, as was expected three years ago.
The original order for the sale came in 2021, after an extended investigation from that same year, following an initial investigation started June 2020, about a month after the sale became public knowledge.
Giphy and Facebook didn't give the CMA an opportunity to block the sale before it happened, so of course antitrust action had to occur after the fact. That's not regulatory overreach, that's lack of a time machine.
My guess is that when the Tenor sale happened back in 2018 there were still enough of small companies that competed, Giphy being one of the last major ones to get taken over.
I don't know if antitrust watchdogs can still start a successful case five years later, but I would be very happy if they could undo that sale too. These tech companies are big enough already, they don't need more power.
Presumably it's more to do with 50% of the ad market being meta, and 50% being google. Basically, the ad monopolies should be broken up -- so any acquisition whatsoever over any ad-supported platform is anti-trust.
> The announcement comes… after the U.K.’s [Competition and Markets Authority] issued a final order for Meta to sell Giphy, on the grounds that the merger reduced dynamic competition.
> … Shutterstock said it expects the deal to close next month, with Meta also signing a commercial agreement to continue accessing Giphy’s content across its product suite.
So, Meta still sees value in a Giphy they don’t own.
Well, sure. They didn’t want to sell. This arrangement lets them “sell” Giphy and still get the benefits of access to its content. Kinda feels like an attempt to end-run around the order.
This still seems like such a random acquisition for the uk to have blocked. Giphy has plenty of competition and gifs seem to he waining in popularity anyway.
What are they into, tiktoks/instagrams (I'm still annoyed that I can't know if an instagram link is going to be an image, or a video, these days—it's for photos, damnit!) with captions? That's just gifs with worse UI.
Stickers is the new thing now. The world outside of old people in America have moved their discourse to private chats such as WeChat and WhatsApp and Snapchat
> “Marketplace commentary and user sentiment towards GIFs on social media shows that they have fallen out of fashion as a content form, with younger users in particular describing GIFs as ‘for boomers’ and ‘cringe’,” the company wrote in a submission to the CMA.
actually reading the article in full, it's clear GIPHY and Meta are mentioning this with a BIASED motive to present their investment as non competitive.
If giphy was doing so amazing, how does that explain the enormous write down today? Sure you can argue Meta overpaid, and there are some bounds applied by the regulator on how they could sell it, but I don't think that accounts for the entire gap.
CMA isn't a quango - its absolutely a direct government org, established by Act of Parliament. Nothing "Non-Governmental" to see here, its run by the Department for Business and Trade.
From wikipedia:
Type Non-ministerial government department
"A non-ministerial department (NMD) is a government department in its own right, but does not have its own minister. However, it is accountable to Parliament through its sponsoring ministers."
UK ministers (politicians) can absolutely influence the CMA, there is no vote on its leaders - they are simply appointed by the Business Secretary, who can pick whomever they find most favorable to their own objectives. The Business Secretary can be replaced at any time without a vote by the Prime Minister too in a reshuffle.
The only real check on the CMA would be the UK's judicial review process, if a decision was especially egregious.
But this specifics of what is and is not a quango don't matter. The original claim implied that the decision was made by a politician for political reasons and this isn't the case.
Side note, but how defensible is Shutterstock's business after the generative AI boom?
I understand that Shutterstock's customers need royalty-free, high-res images with clear copyrights. Is the lack of clear copyrights the biggest hurdle to generative AI art adoption, or is the quality of the art itself the bigger hurdle?
The people writing articles that are... appropriate for AI generated mush didn't buy stock images, and organisations like e.g. the BBC are not going to put uncanny valley images of hospitalness on the banner of their articles.
Heise, one of the most reputable and in-depth tech publishers in Germany is using them. Mostly for articles where an image doesn't add much (like generic battery image in a text about new battery tech), but still. Possibly because images increase engagement
There are a lot of cases where a pub wants a graphic or image (perhaps depending on the pub's style), just about any graphic or image. Yes, for example, people are probably more likely to click on a social media link with an image.
Funny, because I live in the world of designers and a lot of them see a very near future where generated images replace 'real' photographed stock, if some are not there already.
It is already being used in commercial work. I know this from being in the industry, but I was also served an AI generated advertisement from a real company on YouTube today so it's in the wild too. It was a human talking about the product, you could tell it was AI by the way it reset it's face to the same position every sentence, and the stilted speaking. But it was honestly quite shocking, I could see someone not knowledgeable in tech being a bit weirded out but still convinced it was just a weird actor.
It will be in a lot of advertising really quickly, advertising uses a lot of image and footage fodder for lack of a nicer way to put it. "Lady walking with smile" slap the brand assets on it, hide the AI hands, done.
Stock images were also popular in advertising, since they were considered cheaper than hiring an illustrator or photographer. AI-generated images are cheaper again, and most people can’t tell the difference.
Former Shutterstock employee (was laid off in 12/2022).
Shutterstock makes most of it’s money from two operations:
1. Editorial content - images/video of news related events. Pictures of celebrities or photos of Biden, pictures of the Met Gala, etc. They have exclusive deals that keep this pipeline alive.
2. Commercial licensing - HBO/Netflix will often bulk buy a set of a couple hundred images for promoting their new show.
Everything else is trash web development and tech. They fired their AI team and their current AI tech is just rewrapped existing engines such as DALL-E. In the last five years they’re internal teams redesigned their website/marketplace at least 3 times. From React to React to NextJS. They frequently purchase companies and lay off the teams after about a year (see ya Giphy).
Shutterstock doesn’t have to be good at tech because they can feed off of the work of other companies doing it for them. That’s why they let companies like Facebook blatantly train off their data set. That’s why they consumed PicMonkey.
To make it seem like they are an innovator they rely on yearly announcements of investment in new fads (like their current AI efforts) and lay off tons of teams to boost their stock price so they can say they save on labor costs.
They are ripe to be displaced either by a smarter competitor that can offer better compensation per image or by Getty Images.
- Quality is still pretty big. And if I have to spend hours prompt engineering, is it really a win?
- That said, there is some copyright murkiness and I probably wouldn't use generative AI in a marketing campaign as a large company. A lot of more incidental use like conference presentations, I wouldn't worry too much.
For the near-term getting into the workflow is probably the key term. I'm hopeless with drawing but, for someone skilled with Photoshop and art generally, I can absolutely see getting generative AI output and then spending some time manipulating especially with all the new Photoshop ML tools.
I think they're well positioned. The winners of the generative AI space will be players with lots of copyrighted content. Shutterstock was already top of mind, and purchasing rights to all the images in Giphy strengthens their claim.
There's two paths. Either copyright claims lock down training, and Shutterstock now licenses their training dataset to companies; or generative art trained on open images lose their novelty (think Comic Sans but for photos) and Shutterstock gains an upper hand by having an existing pipeline of novel images to train with.
That's because Facebook didn't wait for the UK regulatory body to come to a decision before completing the acquisition.
You don't have to tell the UK Competition & Markets Authority about an acquisition before it happens, but if you don't then you risk something like this happening. While an investigation is ongoing it may block some steps towards integrating companies and it gets about six months to make a decision. Facebook then spent a few years appealing and negotiating. Presumably giphy spent all of this time in some sort of limbo.
The idea (pre-aquisition, afaik Meta deprioritized that) was letting companies pay to push their gifs. Since companies can't directly buy ads in your private conversations, giphy could offer them the exciting opportunity to push people to send ads in meme-format to their friends! (I wish I was joking, but that was their framing)
Analytics tracking pixels normally ARE GIFs, specifically a 43 byte transparent 1x1 GIF.
But most “GIFs” are not GIFs but rather Mp4, mov, or webm or some other compressed file format. Actual GIFs are extremely wasteful of bandwidth and not hardware optimized. The name lives on though.
Are you asking why a GIF is used, or why the 43 bytes are needed?
I think a GIF is likely the smallest wide-supported resources format (force the browser request a URL to load a specific resource). The 43 bytes is the minimum size for a valid GIF, so the browser won't log an error loading the image and go through all load events.
Is FB’s UK business worth $347M? I would call their bluff out of spite and just cut off service with a nice page that has the phone number and email of the bureaucrat that made the decision.
Their '23 Q1 10-K shows Europe revenue of $6.8B (for the quarter). By population the UK is 67M / 746M = 9% of the region. So that suggests the UK is responsible for $6.8B40.09=$2.4B of revenue per year, likely more as Facebook has high penetration there and it's a high value advertising market.
I wonder if they could've just cut off Giphy in the UK (likely much smaller), which would theoretically keep the UK wide open for gif-sharing competition.
Yes, UK is 5th/6th biggest economy in the world, depending on who you ask. Honestly surprising to me as well, it's felt very small and inwardly focused last decade or so. There's some definite irony in me saying that as an American.
Yep makes total sense. I was shocked by how much they paid for it initially and could never justify that cost. 54 million seems more apt, but about 30 will be ok too.
Obviously companies must follow local regulations but I think it is a bit different when they regulate that one US company can’t buy another US company. This has no direct effect on UK citizens. Of course legally the UK can do whatever they want, but philosophically regulating this type of behavior feels a bit more unusual and excessively overreaching.
> I think it is a bit different when they regulate that one US company can’t buy another US company. This has no direct effect on UK citizens.
Incorrect.
What the UK decided is that this acquisition can be harmful for UK citizens, and in order to continue doing business in the UK, they must comply with regulation.
This is actually the regulatory institutions of the country acting on behalf of the citizens instead of allowing corporations to freely pursue their monopolistic tendencies.
There's no overreach here. Meta is free to tell the UK to just fuck off and ignore the regulation. But then they would have to stop doing business in the UK (and possibly later on the EU, that tends to be even stricter).
These are countries acting on their own jurisdiction, and companies deciding that doing business in that jurisdiction is more profitable than keeping the acquisition.
In general, if you're a multinational, doing a merger, you'll want approval from authorities in the US, EU, probably UK (who tend to behave quite similarly to the EU ones), maybe China if you do business there. Where you're _based_ is almost irrelevant; if you want to do business globally, that means making yourself subject to a certain amount of local regulation.
If this were not the case, it would be impossible to regulate multinationals _at all_; a multinational thwarted by its home country would simply relocate (this happens anyway at the edges; note that most of the giant gambling countries are domiciled in weird island nations, say).
> The sale was forced by the UK antitrust agency while Giphy is a US company.
That sounds... strange. Would China or Russia also have an ability to force US companies to sell parts? Has Facebook complied because they wanted to maintain good relations with UK regulators?
Whatsapp is more used than SMS and all other apps combined. Is SMS controlled by one company? Whatsapp made Meta almost a billion dollars last year. Yet they're out here sending legal threats to OSS devs and devs of 3rd party clients. Are there 3rd party clients for SMS? Yes. Then why shouldn't there be 3rd party clients for Whatsapp? Zucks failed experiments on metaverse is resulting in him trying to aggressively monetise the golden goose.
Have there been successful image hosters that weren’t just spending money to capture users in order to sell out or eventually enshitten (imgur, giphy, imageshack)?
Shutterstock is selling prints so it will be interesting to see what they do with giphy.
I remember when Imgur started and they were really nice and seemed to be a low cost (I think only one employee) so they could host barebones without making the experience bad for users (ads, data mining, etc).