GumGum raising $1.2 million for content licensing and distribution

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GumGum is raising $1.2 million in a first round so that it can expand its business of licensing and distributing online content. The Santa Monica, Calif. company has developed a platform to monetize media, starting with photos, that are often pirated online.

Users upload their photos to GumGum. Then users who want to purchase the content can do so at the GumGum site, and the company handles the payment, tracks every time the content is viewed, and protects the content with its proprietary authentication technology, distribution wrapper, and watermarks. Publishers who use the content can pay on a per-use basis, or when it’s viewed, or they can subsidize the usage via ads.

The company uses Flash objects to track impressions and bill them. GumGum, founded by Ophir Tanz and Ari Mir, says that works much better than licensing a photo on a flat fee, which is the industry norm.

You can see GumGum’s wrapper on Internet photos with the tagline, “Photo licensing by GumGum.” GumGum keeps a small percentage of the amount that publishers pay the content owners. Providers of stock photography, such as Fotosearch, Moodboard, and Getty Images, compete with GumGum. So does Redwood City, Calif.-based startup Attributor, which also tracks intellectual property.

Investors in the current round include First Round Capital of West Conshohocken, Penn.

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