July 2002 Selling Stock

Posted on 7/1/2002 by Jim Pickerell | Printable Version | Comments (0)

488

JULY 2002 SELLING STOCK




Volume 12, Number 6



©2002 Jim Pickerell - SELLING STOCK is written and
published by Jim
Pickerell six times a year. The annual subscription rate is $120.00 to have the printed
version mailed to you. The on-line version is $100.00 per year. Subscriptions may be
obtained by writing Jim Pickerell, 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, fax 301-309-0941, e-mail: jim@chd.com. All rights
are reserved and no information contained herein may be reporduced in any
manner whatsoever without written permission of the editor. Jim Pickerell is also
co-owner of Stock Connection, a stock agency. In addition, he is co-author
with Cheryl Pickerell of Negotiating Stock Photo Prices, a guide to pricing
stock photo usages.

Thought For The Month

    WPP Group Plc, the world's number two advertising company, doesn't expect to see a
    "pronounced" ad industry recovery until 2004. This statement from WPP Chairman Philip
    Lader in late June deflated investor optimism that ad spending would revive later in
    2002.




CUSTOMER SERVICE




July 1, 2002 (Story 487) - Is the stock industry giving customers what they want?


The day is not that far off when the only images available for licensing will be those
that can be searched and delivered online.


Getty says that "virtually all their revenue" (over 90% of non-footage sales, or sales
where CD-ROM discs are delivered) come from images that can be found and delivered
online. Corbis hasn't announced a percentage, but given how focused their strategy has
always been toward online it seems logical that nearly all their sales come from images
that are online. Masterfile says that 89% of their North American revenue comes from
images found online.


Increasingly, if an image is going to sell it must be available for search and delivery
online. But, there are at least two factors that greatly limit the number and variety of
images that will be made available online.


1 - The first is the up front cost of scanning and keywording. This places a severe
limit on the number of new images any agency, even the largest, can afford to show.


If you go to Gettyimages.com and search in the creative section for the four
orientations vertical, horizontal, panoramic and square you get a total of about 450,000
images. That is just a little over 1/2 of 1% of the 70 million images Getty says were in
the files of the brands they acquired. Getty has scanned most of the older images they
intend to scan. If a file image is not online now it's unlikely to be added to the
database. They are aggressively returning all unscanned images to their photographers
and in 2000 returned over 10 million images. By now total returns probably number close
to 15 million. According to photographers a very small percentage of the new images
submitted are being added to Getty's database.


In the early 90's Corbis scanned large numbers of the images from the photographers they
chose to represent. Editorial photographers indicate they still get a good acceptance
ratio, although not as good as a few years ago. On the other hand, Advertising shooters,
particularly those with The Stock Market, say the editing is so tight that very little
of what they produce is being accepted for scanning.


Masterfile and Zefa say they are scanning some of their file images, but their emphasis
is on the recently created images their photographers supply. By the end of 2003 they
expect to have returned all their unscanned images to their photographers.


Other smaller agencies are caught in the dilemma of how to cover the costs of scanning
their file images, and how much of their analog file to scan if there is going to be a
significant reduction in requests to research the analog file.


Clearly, only a very small percentage of the images currently in stock photo files will
ever be placed online.


2 - There is also a movement to keep image databases relatively small and tightly
edited. It is generally believed this is what customers want. Customer have complained
that with large databases they must look through too many inappropriate images to find
what they need. Suppliers haven't figured out an effective way to have a large database
of digital images, and still make it easy for customers to focus their searches in such
a way that they can find what they need by only having to look through a relatively
small selection of images.


It should be remembered that in the old system all those inappropriate images were in
the files and available, but there was an in house editor pre-selecting what the
customer would see. This pre-selection is based on a very specific set of criteria
supplied by the customer. If the editor simply dumped everything from a general category
on the customer there would be loud screams - the same kind of complaints agents are
hearing from customers today when they are required to search through large databases.
In the past good editors would search through hundreds of transparencies to find the 20
or 30 that were most appropriate to the customer's needs. This happened out of sight of
the buyer, but was a very valuable customer service. Increasingly, this service is being
lost in the digital environment.


The elimination of second-stage editing also has a major impact on how images are chosen
for a primary database. If the file must be edited so tightly that no customer will ever
be disturbed by the number of images they have to look through, then it places great
restrictions on what can be added to the file.


In the past, the initial editing decision as to what should go into the file could be
much broader because second level editing existed. The first level of editing was based
on image quality, and whether there was a chance -- not a high probability or a
certainty -- that some future buyer might want to use the image.


Often it turns out that images that the editor was not very enthusiastic about, or
thought had a very remote chance of ever being used, are the ones some customers want to
buy. As the level of editing is raised to a higher and higher standard more and more of
the images customers would like to use are lost because they are not put in a place
where the customers can find them.


Predominant Strategy


In an effort to "satisfy the customer" most online operators employ an editing strategy
that selects only those images they believe have a very high probability of selling
quickly and frequently. They focus on current trends. They try to eliminate as much
redundancy as possible in every subject category (although competing agencies may offer
very similar material). Their goal is to give the customer a limited number of choices
in any search. To be successful using this strategy an editor must:


  • have an intimate understanding of what ALL buyers will want in the future,


  • believe that, "All buyers WILL LIKE exactly what I like!", or


  • be willing to lose a significant percentage of sales because they don't have what
    the customer needs.

An Alternative


I believe a looser edit that produces a much larger database with a more eclectic
offering is a better solution. This database would provide a broad depth of coverage in
all subject areas, or if it is a specialist agency database, a depth of coverage in the
specialty.


Such an edit will probably produce a high number of hits on most searches, particularly
if the images are not well keyworded, or if the customer is not skilled in using
keywords to narrow a search.


To aid the customers, I would recommend instituting two additional editing strategies.


  • I would encourage customers who don't have time to search through many
    inappropriate images, to call and let our editors produce a custom sort for them based
    on their specific criteria.


  • Secondly, I would institute a strategy of "Collections" similar to that being
    implemented by Alamy and SuperStock. This makes it possible for customers to see a small
    sample of what the agency's editors believe are the best images in large frequently
    requested categories. These "Collections" are pre-selected by the agency's editors and
    only a click away for the customer.


    The editors produce custom lightboxes of the 50 to 100 of the best images in a category.
    Ideally, whenever someone does a search using one of the selected keywords a message
    comes up saying, "Do you want to see the Editor's Choice or All Images In The Database."
    This reminds the customer that they can get a custom selection if they like, but most
    importantly the depth of coverage is available if they can't find what they need in the
    "Editor's Choice." The agency would determine the subjects for "Editor's Choice" by
    looking at the most frequently requested keywords.

In order to get a larger selection of images into the database, some sellers are
scanning large quantities of images at low resolution and doing minimal keywording. They
scan-on-demand whenever an image is actually requested.


So far, few organizations have adopted this strategy. Nearly everyone has gone toward
tighter editing and taking a huge portion of the existing imagery out of the market.


What Do The Buyers Want?


Will the prevailing and predominant strategy really benefit the buyers in the long term?
Will customers buy what an editor has decided the majority should want? Will customers
insist on establishing their own criteria for their image needs?


If the customers can't find stock images that fulfill their needs will they:


  • settle for the next best image just because it is easily available and less
    expensive, (Getty hopes that's what most customers will do.)


  • seek out other harder to find sources that offer a greater depth and variety of
    coverage,


  • return to those sources that continue to maintain analog files and provide
    research services of these files, as well as offering some selection online,


  • hire a photographer to do an assignment so they can get specifically what they
    need, or


  • do without images.

I believe many customers will seek other sources because they will need an image that
fits their specific requirements. The first place they will go is to the agencies that
still maintain analog files and provide good file research. But many of the agencies who
used to do file research have eliminated that service. Many of the agencies that are
trying to maintain these files are struggling because they don't receive enough request.


Then the only way to find images that were formerly in agency files will be to go
directly to photographers. This will be a very difficult process for most buyers because
there is no convenient way to find most of these photographers.


Some, who can afford it, will hire photographers to do assignments and produce exactly
what they need.


Unfortunately, in the not too distant future, some customers are likely to find it more
difficult to get the images they really need than it was before we had digital
databases. When they can find the right image the price may be higher, and in many cases
they won't be able to find the image in stock (even when they know it previously
existed) at any price.


Now when a customer calls Getty Images and wants to use an image that was previously in
the files but has not been digitized, Getty will often tell them that they "no longer
represent the image." Sometimes they provide the photographer's contact information so
the customer can go to the photographer directly. However, one photographer reported
recently that when a customer finally found him the only information that Getty had
provided was, "He lives somewhere in the Southwest." This was all Getty could offer even
though the photographer in question is still on contract to Getty Images.


Customers want variety. They would like to use images that are no longer available. The
fact that the image was created three, five or even more years ago is not a problem
depending on the subject matter, but some of the database operators are instituting
policies that they won't scan any image that was shot more than a year ago.


Unfortunately, much of the historical material will simply disappear. It may still
exist, but it won't be where it can be found.


In summary, I believe the industry is moving away from being able to give many customers
what they want.


Decision Time For Photographers


Tight editing presents a major problem for photographers who are trying to make a living
producing stock images. Much of their past work that was generating revenue has either
been pulled from the files or is no longer being actively marketed.


Getting these images returned and then getting them working again can be very difficult.
In most cases the images have been filed by category and everything needs to be sorted
by photographer before it can be returned. This can take months for a small file and
years for a large one. It is a very labor intensive process. Funding the sorting is
often a real strain for an agent that is trying to spend every spare dollar to build up
an online presence.


When the photographer gets his or her images back, it will be hard to find a new agent
who will actively market them. Most agencies are focused on adding recently created
work, not material that was created a few years or more ago.


Some photographers will be tempted to put their images with an agency that just has an
analog file, but doesn't have a good online offering. But, if customers are no longer
asking for file searches will anyone look at these images that are in an analog file?


I believe it is critical to get as many images as possible on a searchable web site. Try
to deal with companies that will back up their web offering with analog searches when
what the customer needs is not on the web.


But keep in mind that for the agency getting the right balance between a web offering
and analog search, and still remaining profitable, will be very tricky balancing act.


Photographers with deep files may need to think a lot harder about developing their own
searchable web sites and promoting their brand rather than relying on an agency to
handle all the marketing of their images. Several companies offer relatively inexpensive
options for setting up and hosting a searchable web site, Services like the Veer
Directory (www.veerdirectory.com) will make it easier to promote a site once it is
functioning.


VEER DIRECTORY



June 21, 2002 (Story 486) - Finally, someone is looking seriously at the
marketing problems facing rights-managed agencies. The team formerly behind EyeWire and
several other brands (more on the people later) is pioneering a frequent, direct-mail
directory that's cost-effective and efficient for even the smallest agencies, while
offering 'niche' benefits to anyone with thematic collections.


Rights-Managed image sellers with searchable web sites have a new, more affordable way
to promote their offering to image buyers. The Veer Directory of Rights-Managed Stock
Imagery is designed to assist buyers in finding professional images and drive traffic to
the seller's web site.


An updated Veer Directory will be mailed free to 30,000 graphic design and advertising
professionals in the United States and Canada six times a year. Suppliers with
specialist collections will find it a particularly cost effective way to promote their
collection to the entire market. They can advertise occasionally or in every issue as
they choose. The directory will also be useful to large general agencies who recognize
the marketing value of repeated impressions. Large agencies with specialized thematic
collections can use the directory as an affordable way to focus attention on their areas
of specialty.


The 7" x 8.5" page size is large enough for good display of images, but small enough
that the image buyer will want to keep it on their desk near their computer for easy
reference.


The bi-monthly mailing strategy provides the seller with the opportunity to easily
re-focus their message and offer special promotions to test the effectiveness of their
marketing. The cost is very affordable. Sellers can purchase a display ad or a listing
by category. Listings are priced such that small suppliers with a well defined specialty
can afford to let 30,000 buyers know their site exists. The idea behind the directory is
to provide a tool for the buyers that will enable them to find all the stock sources --
large generalists or small specialists -- that have searchable web sites.


A Veer Directory web site of rights-managed stock suppliers with a direct link to each
agency's site will launch in September 2002, coinciding with the first issue of the
Directory. This will provide every advertiser with two avenues to promote their brand.
The site at www.veerdirectory.com is already live and currently provides image suppliers
with information on advertising options.


Only those suppliers with a keyword- or category-searchable site are allowed to
advertise in the Veer Directory. This should limit the listings to only the serious
stock image suppliers and make it a more useful tool for image buyers.


The Veer Directory recognizes that:


  • Web sites must be promoted, and that while E-mail and other types of online
    promotion can be useful, frequent print marketing must also be used to reach the broad
    cross section of image buyers.


  • Catalog promotion has become ridiculously expensive in the U.S. For the return it
    generates, only the largest of agencies promoting a broad general file can justify this
    expense.


  • Frequency is important. Advertising theory says that a prospect must hear the
    message at least six times before they buy. A single print ad or direct mail piece is
    not enough.

With the new postage rates individual direct mail pieces in any kind of volume or
frequency become prohibitively expensive to distribute. Veer lets you promote your site
for a fraction of what it would cost to produce your own materials.


Surveys of image buyers have indicated that they use several different suppliers and
they want more choices. They also say they need help in identifying new and specialist
suppliers.


The directory will be promoted in the Veer Visual Elements catalog, a sister publication
with a monthly circulation of 400,000.


[ Disclosure: I was involved in the concept development of the Veer Directory. For
my efforts I will receive some compensation based on the success of the project. Thus,
the opinions expressed here are not unbiased, but I believe they are still worth
considering.]


Who Are The People Behind Veer?


A critical issue when gauging the chance for success of any new venture is the
experience of the people behind it. Veer brings the talent and expertise of much of the
original EyeWire team back together, with former EyeWire President and CEO, Brad
Zumwalt, on the board as an investor.


This team has effectively marketed products and services to the visual content industry
for over 15 years and has extensive expertise in marketing, list selection and design.
They have produced direct marketing sales catalogs and web sites for Image Club, Adobe
Studios, EyeWire and some of the Getty Images brands.


The Veer team has demonstrated that they know how to produce effective direct marketing
products and to build and manage an effective mailing list.


The goal of Veer is to build a company that offers creative professionals all the
services they need. The EyeWire model offered a variety of products and services, but
from the creative buyers point of view the one important element lacking in that model
was access to Rights-Managed photography. The Veer Directory adds this important element
to the mix and thus makes the entire Veer offering a more useful, if not indispensable,
tool for creatives. It provides photo buyers with information and access to not just one
or a few brands, but potentially every brand that might have images that would fulfill
their imaging needs.


Why Advertise More Than Once?


Some agents have said, "If this is just a directory, why does it need to be mailed so
often? Why do I need to be in it six times a year?"


Advertising theory says that a prospect must hear the message at least six times before
they buy. Customers need to be reminded that you exist. A single print ad or direct mail
piece is not enough. Web sites are always changing and new ones are appearing. To be
useful to buyers the directory must always have the most up-to-date listings and
information.


Our industry is changing rapidly and dramatically. Sellers need to be able to test the
effectiveness of their advertising and make adjustments. If an ad strategy isn't working
it is easy to make adjustments when the next directory will come out in two months.


Frequency gives sellers the opportunity to make short term special offers. They can also
show new work in each issue or feature certain sections of their file. Pre-designed ad
layouts make creating each new ad simple and hassle-free. Over time this will give
customers the comprehensive understanding of the offering they desire.


One complaint we have heard is that one spread is too limiting in the number of images
that can be shown. Buyers have also said they want to see enough images to get a flavor
of what the agency has to offer. One way to solve this dilemma without producing your
own catalog or a very elaborate direct mail piece is to provide a URL in your ad that
links the buyer to a special lightbox that shows 50 or 100 of the best images on your
site. The print ad simply draws the buyer to the web. The lightbox gives them more depth
of understanding of what is being offered. The buyer can easily move from the lightbox
to doing full searches for any subject on your site.


Some agencies may find that they want to do an occasional spread for a special
announcement and then smaller ads, or a listing on a regular basis to keep their brand
in front of the customers and still manage their costs.


Thematic Categories


The Veer Directory will feature a comprehensive listing of rights-managed image
suppliers uniquely organized by thematic categories. Users will be able to quickly and
easily locate the web sites of companies that specialize in the type of imagery they are
looking for at the moment.


This feature will be particularly useful for those buyers who choose to go to
www.veerdirectory.com, search through the categories for the general type of imagery
they need and then click on the URL of the agencies listed for direct access to the
agency's site.


What's The Source Of Their Mailing List?


Some users want to know more about how the mailing list is compiled. The Veer team
provided the following explanation as to how they build their list.


"Our strategic list selection is compiled by an in-house circulation analyst and list
expert with over 5+ years in the visual content industry and proven results in growing
the customer and prospect databases to over 500,000+ names. The list includes high-end
names from graphic design magazines, subscribers to Photography and Illustration
annuals, and other lists of buyers of stock imagery and related services. We will also
draw names from our house list and from a single agreement with a significant strategic
partner to access lists that are not currently available on the market. All the names on
our list are active buyers in the past 12 months, are segmented by advertising agency
revenue, professional title and buying history. We also identify names that appear on
multiple lists to increase the purchase probability."


PANSTOCK AND MON-TRESOR


May 13, 2002 (Story 479) - Anton Dentler has formed a new agency, PanStock, LLC
and has assumed all international representation of Mon-Tresor image products outside of
Japan effective April 1, 2002. PanStock will assume will assume all representation of
eight catalogs that were formerly handled by Mon-Tresor U.S.A. The catalogs are W1, W2,
W3, W4, W5, W6, EC (European Collection) and Y3. The new agency will also produce new
marketing products featuring Mon-Tresor stock images, including a major new panoramic
stock photography catalog now in production.

PanStock is based in Rochester, NY with David L. Brown as general manager. Brown is also
CEO of Natural Selection Stock. The PanStock office will handle collections of
commissions for future sales and contractual arrangements with sub-agents, as well as
rights clearances and marketing projects.

Dentler is the former owner of Bavaria Bildenagentur in Germany. He sold that company to
Visual Communications Group and it was later acquired by Getty Images.


BURAK JOINS TIMEPIX


May 13, 2002 (Story 479) - Jeff Burak has joined TimePix, the photo syndication
unit of Time Inc. Previously he was with The Stock Market for ten years. TSM has been a
unit of Corbis since the fall of 2000 and Burak was managing director for Corbis Stock
Market when he left.

In his new position Burak will be responsible for repositioning the TimePix brand with a
focus on the company's photojournalistic archive of the Time and Life Picture
Collection. His responsibilities encompass all operating aspects of running a photo
syndication business including selling and marketing; maintaining relationships with
clients, photographers and international agents; launching an improved website; and
revising content strategy.


Copyright © 2002 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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