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Demand Founder Raises $20 Million at a $100 Million Valuation for Legal TV-Clipping Startup Whipclip

The inspiration for the service? The epic rant by the Seattle Seahawks' Richard Sherman.

Longtime Los Angeles entrepreneur Richard Rosenblatt is launching a startup called Whipclip in private beta today, striking a series of deals with big media companies and attracting a roster of entertainment and venture investors to back a mobile app that allows consumers to clip popular moments from television.

In an interview, Rosenblatt — who co-founded Demand Media and stepped down as its CEO a year ago after the content company ran directly into the buzzsaw of a Google algorithm change — said that he was aiming to create a legal and simpler way to share short snippets of memorable TV video.

More importantly, he has raised a pile of money, including from Raine Ventures, IVP, William Morris Endeavor, Ziffren Brittenham LLP, Greycroft and individual investors such as Peter Guber, Steve Bornstein, Gordon Crawford, Thom Weisel, Scooter Braun and Ron Zuckerman.

While Rosenblatt declined to give precise figures about his funding, several sources said Whipclip had raised $20 million at a $100 million valuation. The money will be used to add to its staff of 25, located in both Santa Monica and Tel Aviv in Israel.

The startup is aiming at the still-high amount of time consumers watch television — up to five hours a day compared to a much smaller amount of time for online viewing, despite a huge interest in sharing TV clips across sites such as Facebook, Twitter and Instagram.

Twitter, for one, has been aggressive about encouraging people to tweet about television, pushing the idea that more online discussion of shows boosts ratings. Still, in large part, networks create only a small number of legal clips every day, leaving them vulnerable to people using not-so-kosher means of creating them.

Although initially not a consumer play, Whipclip’s main focus now is recruiting these content owners to provide their TV shows for WhipClip’s consumer application in return offering video streaming, editing, distribution and analytics tools. Once shared — via Twitter, Facebook, Pinterest and Tumblr, email and SMS — the clips direct traffic back to the content providers’ sites.

Of course, the success or failure of services like Whipclip depends on how much popular content it can convince media companies to share. For its beta launch, it has signed up a smattering of shows from ABC, CBS and A&E Networks, which is still clearly not enough to go really viral.

 Richard Rosenblatt is feeling clippy.
Richard Rosenblatt is feeling clippy.
Sharon Suh

In other words, if you can only share moments from “Duck Dynasty,” it’s probably not going to cut it. Rosenblatt acknowledged that, but noted that the consumer interest in TV clips remains a ripe area for disruption.

He said he got the inspiration for Whipclip after watching the now famous moment in mid-January, after Seattle Seahawks football player Richard Sherman went on a postgame rant about another player. Rosenblatt wanted to get a clip of the diatribe to his kids, but found it nearly impossible to do so except via sending links to stolen clips on YouTube.

“I did what everyone does and emailed, ‘Check this out it’s at https://www.youtube.com/watch?v=7mlnm3rfnww, but it’s long so fast forward to 11 seconds and you don’t need to watch past 35 seconds,'” said Rosenblatt, who had been consulting for Raine since he left Demand.

He had previously been introduced to Ori Birnbaum, who had co-founded RayV, the video streaming platform startup that Yahoo bought earlier this year. There, Birnbaum was developing clipping technology to serve media companies, which Whipclip now owns despite the sale to Yahoo.

Others such as SnappyTV offer media companies clipping tools, but Rosenblatt suggested that they take it further, urging Birnbaum to “flip his B2B tool into a consumer tool and add a detailed set of rules so the media companies will feel secure about letting users share their content.”

Having tried the app, it works pretty well, allowing you to find and clip various bits of TV easily. Not making you feel like a criminal while doing it has its benefits, too.

“You can’t hide behind fair use,” said IVP General Partner Todd Chaffee, pointing to other companies that have tried to offer a similar second-screen service without the cooperation from content owners. “But there is a real need for a video Instagram.”

He also added that he hoped it was a sign that tech and Hollywood could cooperate better going forward. “It is an insider club pulling this together, so that is a good sign,” said Chaffee.

Of course, more clips is probably not a bad thing for TV makers. “The ability for anyone to legally share his or her favorite TV moments in near real-time could have major promotional benefits for the entire industry,” said Dan Suratt, EVP, Digital Media and Brand & Content Licensing, A&E Networks.

We’ll see! Whipclip is launching in private beta today — consumers can go to its site here to sign up to get on the list to get the app when it is released to the public.

Rosenblatt, who has seen both ups and downs in the digital space (after all, besides Demand, he was the one who sold Myspace to News Corp. at a giant premium), noted that he did not expect to stay on the sidelines for too long.

“It was just one of those moments,” he said about his Whipclip inspiration. “It just seemed a relatively simple consumer need.”

This article originally appeared on Recode.net.

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