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March 22, 2012 at 13:13 PM EDT
For Pinterest, Revenue Would Turn Copyright Questions Into Problems
Getty Images' CEO Jonathan Klein is not concerned about people playing with Getty photos, teenagers using them for school projects, and people putting them up on their personal blogs -- or, at the moment, even Pinterest . So when does Getty snap into action? The moment that a website starts running ads alongside those images. As Klein told me in the interview embedded above: "We're comfortable with people using our images to build traffic. The point in time when they have a business model, they have to have some sort of license." That is why Pinterest has a big problem on its hands at the moment. The site has certainly built immense traffic by allowing people to share and collect as many photos as they want -- many of which inevitably don't belong to them , in the legal sense.
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It’s a bit surprising to hear Jonathan Klein talk about photo sharing on the Internet. As co-founder and CEO of stock photo agency Getty Images, he is focused on protecting the photographs that belong to his company — and making sure that Getty and its affiliated photographers get paid.

But he hasn’t eliminated the ability to right-click on a Getty photo and save it to your computer. Anyone with the most basic of Photoshop skills could easily get rid of the Getty watermark within minutes. That’s because he’s not concerned about people playing with Getty photos, teenagers using them for school projects, and people putting them up on their personal blogs — or, at the moment, even Pinterest.

So when does Getty snap into action? The moment that a website starts running ads alongside those images. As Klein told me in the interview embedded above:

“We’re comfortable with people using our images to build traffic. The point in time when they have a business model, they have to have some sort of license.”

That is why Pinterest has a big problem on its hands at the moment. The site has certainly built immense traffic by allowing people to share and collect as many photos as they want — many of which inevitably don’t belong to them, in the legal sense. And as Fortune’s Jessi Hempel reported today, each week the site has to write a big check to keep its servers running to handle its ever-increasing visitor load. This, of course, means that making its own money is an increasingly big priority for Pinterest — and the company has just hired Tim Kendall, a big-name monetization executive, to that end.

But: The second that Pinterest starts making money of its own, intellectual property owners such as Getty Images will have the right to ask that Pinterest pay up — or start deleting pinboards.

It’s not a completely unprecedented problem, but it is a very expensive one. Some people say it’s why Tumblr has still not started to make real money yet. It took YouTube years to even come close to making self-sustaining revenue — and that is in the arms of a ridiculously profitable parent company, Google. When you are a popular online repository for user-generated content, policing what media belongs to whom can literally be a full-time job for entire teams of people. That does not come cheap.

And, perhaps most importantly, your users really don’t like it when you take down the content they’ve shared. Pinterest has built up a ton of goodwill with its community, but nowadays on the web even the most enthusiastic of users can be very fickle.

Now, this is certainly a problem that Pinterest is aware of. And with $37.5 million in funding from some of the Valley’s savviest investors, they are no doubt working on a smart solution. If they come up with one, it will be great news for Pinterest and scores of other innovative sharing-based web companies that would be born in its wake. But for right now, all those question marks surrounding Pinterest’s copyright situation are poised to turn into very big problems — once dollar signs enter the equation.



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