Looking For A Way Forward

Posted on 12/28/2010 by Jim Pickerell | Printable Version | Comments (8)

John T. Fowler posted the following on the Stockphoto listserve.
Stupidity is sometimes defined as doing the same thing over and over and hoping for a different result.

For the first eight years of this decade I did the same thing over and over and enjoyed satisfying stock sales results with a gently but steadily rising curve.

Last year I did the same thing and saw stock sales decline by 30%.

This year I did the same thing and saw stock sales decline by 50% from the average of those first eight years. (It's a good thing I don't have to rely completely on stock sales to stay alive.)

But it's obvious that, for the next decade, I've got to figure out how to become unstupid. Working on that - social networking. Other ideas gratefully welcomed.

My response:

John, thanks for sharing. Your situation is not unique. Many of the RM photographers I talk to are experiencing similar declines – or worse. It is a natural human tendency to want to continue doing what has worked well in the past. But, times change, new business models are developed and old businesses that used to be lucrative fade away.

In many businesses it is easy to spot when a new technology or technique begins to take over. Unfortunately, for stock photographers, given the typical long lead time between production and sale it often takes a long time to recognize that dramatic changes have occurred.

Microstock is taking over. The quality has improved dramatically. The volume is growing at an unbelievable pace. The number of image suppliers is growing astronomically, resulting in greatly reduced odds that the images of any seller will be chosen for use. Search on microstock sites is more efficient than on traditional sites. More customers are able to find more of what they need, more quickly at much lower prices.

The decline is sales has very little to do with the problems in the economy.  Sales are unlikely to improve significantly when the economy improves.

Let me share a little of my personal experience in producing and selling stock. Back in the early 90s I was approaching age 60, and had built a significant collection of RM stock images that at their peak were generating $170,000 a year in royalties. I expected my stock images to provide revenue for me in my retirement. I plowed every extra dollar I had into producing more and better images to build that collection.  

Then Royalty Free was invented. I didn’t like it. I didn’t participate in that market, but some of the early RF adopters have done very well over the years. After a few years of competing with RF I did have the sense to recognize that the long range value of my image collection was declining, and that I needed to invest my time and extra dollars in a totally different line of business. Today, at age 74, when I could use a little extra money for retirement, my RM stock photo collection is essentially worthless. Some will say that if I had worked harder at what had brought me success initially I could have triumphed despite the odds. I don’t think so.

The changes are also coming more rapidly. It took traditional RF almost a decade-and-a-half to take over 50% of the market that had existed for RM images at the beginning of the 90s. In less than 5 years microstock has come from virtually nothing to having a market share that today is probably greater than either the RM or traditional RF share of the market. And microstock’s share continues to grow while the market share the others are able to command continues to decline. But before you decide that microstock is the answer, recognize that the gross revenue generated by microstock is being divided among a much larger group of suppliers than ever participated in licensing images at RM or traditional RF price levels.

If stock photography is more than an avocation, it may be time to develop a totally new business strategy. What are your thoughts? What are your new strategies?

Copyright © 2010 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 301-461-7627, 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.  


  • Leslie Hughes Posted Dec 28, 2010
    Jim and John - I was in the stock biz for over 15 years and most notably as President of Corbis Images during one of its highest growth periods. When I started at Corbis, the company was tiny and had been struggling to be relevant in the market. Clients (and most Photographers and agents) believed that digital distribution was a pipe dream. We had to put researchers in clients' offices to show them the benefits of working with digital images.

    The impact of technology was great and the market caught on. It took a while but then of course adoption occurred on the client side. It made sense from a cost and productivity perspective. Demand increased but photographers were resistant to create digitally. Over time that changed. In part, because of camera technology and production software but also because the market wanted digital images and thus channels required digital images. Then you had lots of images being created and a client market that demanded more and more images. As costs came down (and they did) more and more people got into to both sides of the business. Costs continued to come down and production dramatically increased. The line between professional and amateur has become blurred. The barriers to competition have been greatly reduced. All of a sudden we had millions of images available and now billions.

    So too have the challenges changed. For clients - how to sort through images without getting buried. For artists - how to create relevant images that will stand out and how to distribute those. One key question becomes how to break through the clutter, be relevant to the buyers and grow your sales. And so we are feeling the pain of a saturated market, that is highly competitive and while it is easier to find distribution, it is not as easy to find successful distribution for one's own work. I have argued for years that success for creators depends on focus. I still argue that the images market is not a commodity market but it certainly acts like one. This is key since it means that the subjective nature of images still matters at some level. Commodities are exactly same. So supply and demand drives the price. If a supplier can reduce costs and there is a demand then if they create access, the buyers will come.

    In the images market, technology has made it easy to sort through many images to find content. Even though images are unique, there are many images available that can meet the need of a buyer. Only very few requests require a totally irreplaceable image. So, other things drive success - ease of access, selection, price, right and releases, risk and so on... For anyone to focus n content type, they better be the best at what they do and find a way to show that. For good quality and acceptable images abound.

    This means that for any photographer or image creator to succeed in building a sustainable business in the current environment, they must develop a strategy that is focused on responding to a defined market, it's needs, listening to those needs and responding. And this means adapting when that market is changing. If shooting is a side business, then you can put more and more images into a channel and hope for the best. But if you have a business that you want to protect and grow, it is imperative that you define a strategy that ensures you compete well - no, the best way possible - in the market you are targeting. Even if you are going through a channel distributor like Getty or Corbis. But even more importantly, responding to your market directly and through appropriate channels.

    Being market driven means having to adapt to changes that are affecting your target. Like moving to digital, or understanding that the marketers that most image creators have to sell to are under pressure to communicate in a mixed media world. The answer is not obvious - meaning shooting video is not necessarily the answer to responding to mixed media needs. Adapting means adapting what you do in a focused way that makes sense for your clients and what they are dealing with.

    I work with many types of content creators. The most successful are the ones who spend time to figure out not only what they do but who they are doing it for. Listening to market needs and
    adapting. Some of the most successful young businesses have succeeded because they focus on a niche and respond the best way possible.

    I still say this is not about licensing model. The way to license content depends on goals and where you fit with the content you have. Micro stock works because it responds to the need of buyers who want easy access to low cost images. Fill the pipe. This is a good and viable distribution strategy but still just a licensing and distribution strategy. If you shoot, you still have to determine who you are shooting for and how they will respond. RM is still half the market. There is a reason for that. The consumer market is growing. The mixed media market is growing. Content use is not going down. The change is that a creator can no longer just create and hope someone sees it and likes it or rely on an old market distributor to license their work. Getty and Corbis are old market. Not that they won't survive. Time will tell and determine how well they adapt. But the world is still changing and the most successful will spend a lot of time trying to understand what this means to the customers they want to work with.

    Apologies for the long message.

  • Owen Franken Posted Dec 28, 2010
    A very good message, BUT - I would suggest that the next long message be written in Paragraphs.

    My eyes are killing me having read through this.

    Owen Franken

  • Fred Voetsch Posted Dec 28, 2010
    You have to use the html paragraph tag to set a paragraph, linebreaks won't do it.
    Simply relying on "agencies" to sell your images going forward is a fools game, IMO. Those who are serious about being independent photographers must use all of the social networking tools at their disposal and then exploit those that work best for YOU.
    That may be a blog or it may be a traditional website or you may do better with Facebook and Linked-In, or likely, you'll find that all of the above lead to success.
    Hard work is the one ingredient I know will be required. ;-)

  • Jonathan Ross Posted Dec 28, 2010
    It was a very clear and I think spot on statement. How can anyone say that RM is dead when it still produces half the market share. This story is far more of what not adapting to the surroundings can do to your business than anything else.
    To continue to write about this destruction to our industry please take the time to recognize that commercial work is at it's lowest in years as well.
    This is not the destruction of any industry just a huge bump in the road for our country and I do believe a great deal of it is connected to the economy, another reason for low priced images selling well and commercial work dropping down the drain.
    This recession still has a ways to go in our economy I expect a worse year this year than last and so do the economists, we may never see what we or others used to make in many markets. Double digit unemployment cannot be swept under the rug like it is not a part of the equation, it clearly is.
    So if the market has disappeared why are there still photographers making hundreds of thousands of dollars this past year? It might be that they made a million+ annually a few years ago but to make six figure salaries without employees in this economy or in any business is far from saying the industry is doomed.
    I would like to hear people speak about what they are doing to adapt and continue to grow or hold their revenue in these tough times. Not how another person lost their job.
    I am sorry for the person that wrote you as I am for other photographers that haven't adapted but please don't make it out to be across the board with the industry without something to support the statement other than saying my business is not what it used to be. No ones business is what it used to be in this world right now so we must adapt to survive.
    One last observation, when stock was producing photographers 7 figure salaries the returns were way over inflated and this adjustment is far more realistic than anything else that can be said about the market, the sales price was way over the top of what it took to produce the end product. Couple that with the recession and technology changes and I think you will see that the industry was over priced and the recession is only adding to the price adjustment.

  • Leslie Hughes Posted Dec 28, 2010
    Sorry about no paragraphs! I wrote them but did not know about having to adjust the settings.

  • John Harris Posted Dec 31, 2010
    Where you stand is often determined by where you sit. No offense is intended by my remarks but as noted elsewhere you concentrate, perhaps understandably, on the bottom end of the largest market and conclusions may be circumscribed by that construct. The market for "American stock pictures" is huge and "stock" in that sense is now a repeatable, ubiquitous and generalisable commodity- typically and in my view, tediously positivistic- but easy to conceptualize as a classic market, pictures as in so many tins of beans as it were. We can then talk about technological determinates, supply and demand, volume/price points, investment cycles etc. but this appears to me to be rather a restricted and restricting view when a) considering any other form of photography and/or in other contexts. Photojournalism for instance- for which the generic is anathema, may explore rather than obscure the social and b) the continuance of the producer. To RM photographers here in the UK (and I suspect in much of "Old Europe") in living memory we have had recommended and even agreed minimum rates and even, and I hesitate to mention the fact, trades union membership. Negotiations also occur in other legal frameworks.

    (This is The Neoliberal's Nightmare: The Return of the Restrictive Practices 3, Break their Mom & Pop business backs! Whaaat? Social Solidarity? It's against human nature... Quick - Burn their Sovereign Debt Bonds, that'll show'em!)

    So on this side of the pond "Savvy Marketing" and the idealised aspiration to so-called "New Business Models" is beginning to be seen for what it is: cover - newspeak - for distributers who buy and retain market share by dropping prices, who pauperize the photographer on the one hand and drown the client in mediocrity on the other- all for their own benefit. It is not even a new idea. Whilst highly lucrative for those (present company excepted) smug executives propounding this "progress" and joyfully welcomed by the publisher's ephemeral balance sheet- this Great Miracle of Marketing has succeeded in engendering powerlessness, in demoralising professional photographers into feeling that they must accept less and less for their work although the costs of production (assuming one actually leaves the house) continue to escalate. Here the answer must be to recognize the reality- it is the Savvy Marketers, their Bullshit Businesses Model and it's monopolistic practices that now constitute the barrier to progress. If distributers won't agree to charge decent minimum reproduction rates stop giving them high quality work and find distributors who understand and can realise the value of great pictures. We must develop businesses distinguished and differentiated by quality of content, search, delivery and sustainable prices or we will survive neither the amateur abyss nor the oligarch's steam roller. I for one do not think that the dynamic and revolutionary transformation is we have seen are over. It isn't easy but it is not impossible, and if you don't do it I suspect others will. Happy New year.

  • Mike Houska Posted Jan 1, 2011
    I agree with Jim's assessment of what's happened to our business models. John's question about how move forward brings up the realization that there is really not a clear path anymore of where to go and what to do. For instance, say you develop a social media message. Unless you have a unique
    product, how is this going to drive a solid business model? I'd like to hear of more than a few success stories before taking on such a challenge. The social media landscape is and will be in a continued extremely fluid state. My 15 yr. old son is a good barometer of this and he and his friends now rarely use Facebook, are texting less than they did and now calling on the phone now because
    "it gets things done quicker".
    Some photogs I know have gone into weddings, senior pictures, and other mass consumer photo needs but this market is also shrinking as more people than ever fancy themselves a photographer.
    I believe one of the few (dwindling) options left are in assignment photography and especially if you can get on some sort of contract to provide on-going services to a specific company. To do this, you'll have to offer a good deal to the client to keep them out of the vast freelance pool. Since there are so many shooters now, the skills they will want are those who can actually light their various products and subjects. These positions or contracts will also require some video skills but as we know, that is not as daunting as it once was. Also, several graphic designers are becoming photogs as well so if you have some graphic design skills, those can be be combined w/your photo skills which makes for an attractive package if they can be done well. Also, since many photographers have been businessmen, take some of your business skills and put them to better use in a totally different business model and use your photo skills when they are needed. In general, it is my belief that with a few exceptions, photography skills (alone) have been marginalized to the point of much diminished returns. Good luck... Mike

  • Ellen Boughn Posted Jan 3, 2011
    The good news hidden in the decline of the rights managed business is that many photographers are finding it difficult to support their stock productions and are leaving that market model. As Jim points out, competition in the microstock world is massive; but I predict it will continually decrease in the RM world...but of course if the quality isn't there, neither will the income be either.

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