Image Collections Create Cyclical Problems

Posted on 1/8/2008 by Jim Pickerell | Printable Version | Comments (0)

Sometimes things that make perfect business sense have unintended consequences.

With revenue growth stagnant, if not slightly declining, several portals and picture libraries are looking for ways to cut costs and make their sites more attractive to buyers. On the cost side, they are reducing staff, which usually means expecting suppliers to do more to determine customer need and prepare images for marketing.

Buyers have been complaining that "too many inappropriate images come up in any given search," and ask portals to help customers find the "right image" quicker. Thus Getty, Corbis and others have launched major editing initiatives to streamline their offering by getting rid of images that haven't sold. They also seem to be limiting the acceptance of new images.

On another front, at the beginning of each year, the major portals tend to give each Image Partner an annual quota for the number of images it will accept. So far, that hasn't happened for 2008, though most believe the number will be lower than 2007. Thus, despite the fact that suppliers believe the only way to grow revenue is to make more images of a higher overall quality, suppliers are faced with having significantly fewer images on the major portals and less chance of adding new ones.

Shooters and Image Partners, which were encouraged to produce new images in 2007, are now being told the images won't be accepted or uploaded because there are too many images in the databases already.

Also in 2007, several major portals placed a big emphasis on wholly owning images. Several of the world's leading photographers re-structured their businesses based on expectations of doing a certain number of wholly owned shoots for the leading distributors. That worked for a year. Now, it appears, there will be a significant decline in such shoots.

It is not at all clear what these companies will do to bring in new content. Accepting more images from production companies and picture libraries would be the cheapest solution. But it would be even less expensive to take in little or no new work and focus on selling what they already have in their bloated collections.

Supplier Reactions

 

While all the above decisions make perfect business sense from the portal's point of view, they could easily have a long-term negative impact for the industry. The process of producing marketable images can require many months of pre-planning, hiring and training staff and post-production efforts. Rapid changes in distributor strategy make supplier planning difficult.

We're hearing from several image producers and picture libraries that they had a 15% to 30% decline in gross revenue for 2007 compared to 2006. Small, privately held companies have difficulty dealing with such drops. Some are laying off staff. Most believe the only way to grow revenue is to produce new images, but this only works if the producer has effective access to the market.

Many producers are sitting on huge quantities of images that they spent hundreds of thousands of dollars producing last year. In many cases, the producers were encouraged to produce these images, at their own expense, by the same portals that are now refusing to market them.

The only market for stock photos experiencing growth is microstock. Several producers who originally shot images in hopes of putting them on Getty or Corbis are now quietly making the images available through multiple micropayment sites in hopes of recovering some of their investment.

It seems likely that the quality of the micropayment product, already improving rapidly, will experience a significant boost from the infusion of professionally shot images with high production values. None of these professional image producers think they will earn the income from microstock that RM or traditional RF through the major portals would pay. But they need to recover some of their costs of production.

As the variety and quality of images improves, and there is more pressure on commercial customers to cut costs, it seems likely the micropayment sites will become an even more attractive option for commercial customers. Thus, in an effort to give customers what they asked for could easily result in a decline in revenue for the major portals and make their principle competitor - microstock - stronger.

Finding The Right Balance

 

Given that every project has different needs and requirements, as well as a different definition of the "right image," the image problem is cyclical. Customers complain there are too many images. Image sellers streamline their offerings. Then customers complain they can't find what they want, or exhausted all available options. Then image sellers add more variety of subject matter and vision, making their collections larger. At that point, the cycle repeats itself.


Copyright © 2008 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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