Regarding the lawsuit the company says: “We are left with no alternative but to suspend access to our video search and clipping Beta site for the immediate future. The networks have provided a big blow to the blogger community’s right to exercise the first amendment and comment on newsworthy events.”
Redlasso has consistently argued that its Beta site is legal because “clip usage by bloggers is an exercise of first amendment rights to provide social commentary on newsworthy events Other uses… are prohibited contractually by Redlasso.” The company is reportedly very motivated to reach some sort of agreement with the broadcasters because otherwise it may have a hard time raising more funding. According to paidcontent.org, prior to this lawsuit, “the company was looking to raise another round, although at this point, it seems unlikely that any VC fund would come near it.”
Two of Redlasso’s other services, a tracking and clipping service for businesses and the Radio to Web service that allows radio stations to clip and upload its content online, are still up and running. Its business model is based on revenue sharing with content owners, providers and bloggers.
The startup, established last Nov, has raised USD6.5m from investors including Anthem Capital, Osage Ventures, the Guggenheim Opportunity Fund and Pat Croce, former president of the Philadelphia 76ers basketball team. In April the company had 24m unique visitors, 10m video plays and 105m player impressions. Sites that use Redlasso include Huffington Post, Politico.com and AOLFanhouse. Startups such as Voxant also offer similar services but have not been sued. In response to the news of Redlasso’s cease and desist order in May, Voxant CEO Marcien Jenckes says: “Voxant has always believed that copyrights matter. We recognize that Web publishers, advertisers and content providers have everything to win from respecting licensing agreements.”