A KodakOne Moment

[Added further comments at 6PM GMT, Jan 14] 

“KodakOne,” a startup focused on putting image-copyright law on the—yep—blockchain, has reportedly defied detractors by actually building a viable product.

According to an exclusive interview with the startup's CEO, published Tuesday by crypto site Breaker, KodakOne has “generated more than $1 million in licensing claims” via a beta of its project. The startup is a licensee of the once venerable international photography titan, Eastman Kodak.

This would appear to be great news for KodakOne, professional photographers and the greater blockchain world. The company was greeted with skepticism when it launched a year ago. Some pundits viewed it as yet another cynical bid to raise money by adding the word “blockchain” to one of the best-known brand names in the world.

Still, some critics continue to cast a jaundiced eye on KodakOne’s claims. They question whether the $1 million revenue reported this week is real. Decrypt investigated and remains...confused.

“Licensing claims”

“KodakOne saying it's ‘generated more than $1 million in licensing claims’ can't be taken at face value,” insists author and blockchain skeptic David Gerard, who, for the past year, has been digging into KodakOne’s story. “[CEO] Cameron Chell talks about that $1 million like it's actual money—but there's no evidence of this.” Indeed, he says, the only evidence is this claim in Breaker's story.

“That doesn't say they have $1m, it doesn't say they sent out bills for $1m ... it doesn't seem to assert that this exists at all,” says Gerard.  

We’ve spent the past 24 hours+ in a back and forth with KodakOne’s polite but not especially illuminating external PR agency. The spokeswoman said that the KodakOne folks were at CES, where they were unveiling KodakOne’s new platform, which uses “artificial Intelligence powered web crawler and image-recognition technology to offer photographers and rights-holders dependable and trustworthy online image-usage tracking,” per a recent press release.

Though CES is winding down in Las Vegas, they didn’t have time to fully answer our simple question, the PR lady said. The question: Was the $1 million real revenue? Or was it some kind of estimate based on what KodakOne hoped to recover some day on behalf of its clients, based on images used without permission?

First, she referred us to the press release that repeated the claims made to Breaker. The release did include a little extra—that the $1 million “generated” was from 1,667 individual copyright claims, amounting, per a back-of-the-envelope calculation, to a few hundred dollars per case. (“A few hundred dollars per ‘case’—this is enough that people might pay it because it would cost less than an actual lawyer to defend them against a bad claim,” Gerard scoffed. “This is how copyright trolling works!”)

The press release also says KODAKOne is working with several agencies, including lifestyle site Blaublut Edition and gastro-photo site Food Centrale, both of which we have reached out to and have yet to hear back from. Perhaps they, too, are at CES.

We still had no clue whether the funds generated were real or hypothetical, so we emailed the PR lady again, who directed us to a quote from Breaker's interview. We clarified that we were addressing Breaker's piece, so it wouldn’t do to rely on a quote directly lifted from it, would it? We wanted clarity—was the money real? Or was it some kind of ad hoc estimate of revenues it hoped to receive if it 1.) bearded the transgressors and 2.) actually got them to cough up the questionable shekels?

After more soul-crushing miscommunication, we finally got a quote from Chell himself at 1:43pm, EST. And it was ”just for [us]”!

“Since October,” Chell explained, “Ryde—the creator of KODAKOne—has done $400,000 in revenue, and the [post licensing portal] currently has over an additional $1M in live qualified cases from our beta, which are progressing in an automated manner."

"Additional $1 million"? Hang on. KODAKOne told Breaker that it had only raised $1 million, and would take a 40 percent cut—$400,000—from that sum. So where does the additional million come from? Did KODAKOne actually raise $2 million, and not tell us? Why wouldn't they? What's going on? 

We've reached out for further comment, but really, who the hell knows.  

Gerard’s grudge

So why the KodakOne witch hunt? Gerard, who has been watching KodakOne since January 2018, has long had it in for the company, which has attracted unwanted attention for disputes with its contractors, and for an aborted ICO.

For a start, Gerard says KodakOne is mainly relying on an unsavory business model. Though Breaker says that the “technology behind KODAKOne appears to be sophisticated,” Gerard rolls his eyes. KodakOne’s conceit—to reward photographers, in “Kodakcoins,” when images posted on its platform are reused without proper permission—is essentially “copyright trolling,” he says, a practice he defines as “when you do a web search for uses of an image, and send out a legal threat, with an offer to settle cheaply to avoid the threat.”

This can pan out badly. Gerard pointed us to Prenda Law, a firm purportedly specializing in copyright law, which was dissolved after a 2013 ruling characterized it as a "porno-trolling collective,” a “conspiracy,” and a “racketeering enterprise.” According to reports at the time, Prenda Law’s strategy was to send threats of litigation to users it had accused of illegally downloading copyright-protected porn videos. KODAKOne’s case, of course, isn’t nearly the same—filching a picture for your website isn’t the same as being caught with your pants down filching a porno. 

In any event: Ryde GmbH, (the name of KodakOne’s predecessor) tried a similar tack, yet generated zero “meaningful net income since its formation,” according to a leaked Confidential Offering Memorandum purportedly prepared by KodakOne, which Gerard obtained and posted on his website.

Before we kick it to death, it’s worth noting KodakCoin’s “use case” certainly has potential and if it's what the company claims, is to the good. Photographers are regularly stiffed on royalties owed to them under copyright law. Malthus John, a hobby photographer who ran a photo community on Google +, says people “'stealing' (claiming as theirs) or using photos without permission is a huge problem online,” and is “super hard to moderate/control.”

And besides, maybe KodakOne will actually receive $1 million from its blockchain-based, AI-reliant, visual-scanning beta platform soon. To which we say, good show! The PR person invited us to review KODAKOne’s books ourselves, in LA, which we might take them up on. Maybe we’ll bring Gerard.

CORRECTION: An earlier version of this story erroneously reported that Breaker had written, then removed, an unflattering piece about KodakOne. Our apologies to our colleagues there.