305 FUTURE SHOCK
May 2, 2000
Where do we go from here? In the past seven months the stock photo industry has
experienced a tremendous consolidation. As we entered the fall of 1999 there were
six big rights protected agencies:
Tony Stone Images (Getty)
The Image Bank
Telegraph Colour Library
The Stock Market
Now we have Two -- Getty and Corbis.
Consider some statistics. Corbis and Getty combined currently control close to 45%
of the worldwide sales of stock photos. Combined, they control close to 75% of the
Royalty Free sales.
The TSM acquisition makes it clear that Corbis does not intend to cede the market
for stock photos to Getty, any more than Microsoft ceded the internet browser
market to Netscape. They intend to aggressively compete with Getty. Get ready for
a battle for dominance. Even though Getty may be four times larger, it is not a
foregone conclusion they will end up on top. Again, remember Netscape.
One of the big problems is that both of these giants are trying to be all things to
all people. As a result some big gaps are developing in their servicing of
specific market areas. These gaps are targets of opportunity for other industry
players. The giants are focused on "all digital" operations. When Corbis
announced its acquisition of The Stock Market Tony Rojas said, (Corbis has a)
"...strategy to expand its commercial business in an all-digital model."
There is no question that there is a rapidly growing demand for digital search and
delivery. Photographers need to position themselves to participate in this growth.
But there are weaknesses in an all digital solution -- (hard to believe with all
the hype we hear today) -- and for many there will be opportunities to prosper in
those gaps. Television did not eliminate radio. In the future there will still be
value in images the giants refuse to digitize.
I will begin this article with a list a things photographers should begin doing
immediately. Next I will discuss some general "issues to consider" as
photographers and agents decide how to proceed. Finally I will examine some
winning strategies for photographers and small agents.
Immediate Steps For Photographers
Photographers with the above named agencies should, at a minimum, do the following.
These things are also good advice for photographers with other agencies.
- Track carefully, the number of your images that make it into the on-line
database and determine how quickly they get up.
- Insist that managers of the on-line systems structure the system so you can
search on your name to determine which of your images are actually on-line.
- Track sales of non-scanned general file images. If sales are low -- which
will be the case for many photographers -- it may be because the images are never
shown to potential buyers.
If your images are dying in the file try to place them some where else so they have
a chance of being seen. Many of the images that the big agencies refuse to promote
will continue to earn income if you put them in other on-line databases, or with
agencies that continue to do file research.
- Images accepted into the general files of a Getty or Corbis agency are
unlikely to sell well. This hurts you in two ways. You receive no income from
your prime agency and you are prohibited from attempting to market these images in
other ways where they might earn royalties.
There are two possible exceptions. The Stock Market may continue to operate in
the traditional manner and continue to do file searches when clients can't find the
images they are looking for on-line. The early word is that it will be business as
usual at TSM, but this will be a dramatic reversal of Corbis' past philosophy.
Photographers will need to watch the results closely.
The TIB and VCG overseas operations may continue to sell well from the general file
until they get fully integrated into the Getty system. But as that integration is
completed expect sales to fall off.
- With these agencies, attempt to negotiate non-exclusive or image exclusive
agreements. If they will put your images in a position where clients can see them,
then these agencies are certainly the place to be. But if they are going to bury
your images, you've got to try to find some other way to earn income from that
- Fight to get images returned that the agency refuses to place on-line. You
must be persistent. There are definite indications that photographers are having
trouble getting their images returned. There is no incentive for the agencies to
search their files and return images.
It is fairly easy for the agencies to return un-selected images at the time of
initial submission. Once the image has been integrated into the general file, it
is a major research project to retrieve a particular photographer's images. The
major agencies don't want to spend the money to do this. Moreover, it is to the
agency's advantage to make sure these images are not marketed by someone else
because then there is no way the images can be competing against images the agency
has chosen to market.
As files of the various brands are consolidated much of the work will end up in a
"black hole." Researchers who knew a particular file will be replaced. Even if
there is some incentive to look in the file for a certain subject the chances of
finding it are lessened.
- Pay attention to how images are placed in the digital database and determine
if there is any way you can influence that placement. With some search engines all
new images go to the bottom of the pack in any search. Thus, if there are 450
images already in a category and you add 10 new images to that category they become
the 451st through the 460th to be seen. The chances of these images ever selling,
no matter how good they are, is slim.
Reverse date order so the newest images come up first is better. Some search
engines like Stock Workbook's allow for regular adjustment of the sequencing based
on what the agency feels are likely to be the images in greatest demand. New
images can be put at the top, or certain older images that are best sellers can be
put up there.
The important thing to recognize is that it makes a difference how your images are
sequenced in the search, not just that they are in an on-line database.
- Explore other options. If the agency tends to use fewer photographers, or
post fewer new images per photographer, many photographers will eventually see
their sales fall off. Now is the time to begin exploring other options.
Issues To Consider
Regardless of whether you are just beginning to sell stock photos, or whether you
have been in the business for years and are trying to decide how aggressively you
should produce new stock images in the future, there are several issues that you
should consider carefully.
Too Many Photographers
Getty has too many photographers. Published reports in the investment community
say they have about 4,000, but my estimate is that they are marketing the work of
well over 5,000 individuals. In the future not more than a few hundred will get a
significant number of images added to the Getty databases in any given year. Getty
would like to have the pick of the best work that the 5,000 produce. They want the
ideas -- the vision -- of a broad cross section of photographers.
On the other hand read Ian Buchanan's interview with Andrew Saunders that first
appeared in the British Journal of Photography (See story 295 at the Selling Stock
on-line site). It makes clear that Stone, at least, intends to work with a small
group of photographers who will be heavily art directed. The philosophy at Stone
reflects Getty's approach to "rights protected" imagery. TIB, FPG and VCG
photographers should expect this philosophy to migrate to their collections in the
Most photographers will find that they get no more than a handful of images added
to the file each year. Most will find they can not support continued stock
production with so few accepted images.
Is The Market Growing?
Is the market for still photos growing? The big guys say yes. But, sales at Getty
rose very little in 1999, if you discount their growth by acquisition. VCG sales
were down 6% to 7% in 1999 compared to 1998. They were particularly down in the
U.S. and the UK. Individual photographers with many agencies are seeing a falloff
in their royalty payments. So who's right -- is it growing or not?
Consider these numbers. Gross sales of Royalty Free images in North America in
1999 were probably between $120 and $140 million. Getty says that 85% of their RF
sales are in North America. I believe gross sales of stock images worldwide were
about $1.25 billion in 1999. Approximately 45% of that, or $560 million, was in
North America. The average price of an RF image, which may have resulted in
multiple uses, was $75.00. The average price of a Rights Protected image for a
single use was probably around $350, and at best $400.
Lets assume that $440 million was generated from RP sales at an average $400 each
for 1,100,000 uses. And $120 million was generated from RF sales at $75 each
producing, at a minimum, 1,600,000 uses. Thus, conservatively 59%, of all uses in
the U.S. were RF. It may be worse. On the positive side for the Rights Protected
producer, there are signs that RF uses, as a percentage of total uses, may be
beginning to plateau in the U.S.
RF is the segment of the market that is growing in the number of images used but
that will not necessarily result in a growth in revenue for the industry, and
particularly for the photographers doing the work. RF is taking sales away from
Rights Protected. There are certainly some add-on RF sales -- new customers that
would not have bought Rights Protected under any conditions. But the growth in RF
use must be very significant to offset, in terms of dollar volume, the lost in
Rights Protected sales.
In the last year of so there are indications that this sales growth is beginning to
plateau in the U.S. Just because a product is easier to find and cheaper, doesn't
mean that user will necessarily use a lot more of it. So far, RF has had
relatively little impact outside of North America. But it is my belief that it
will begin to capture an increased share of the uses in both Europe and Asia in the
next two to three years, just as it has in the U.S.
Re-capturing RF Uses
Some sellers think they can convert some of those RF users back to using Rights
Protected images. As I see it, the only way this could happen is if Rights
Protected sellers, not only promote as aggressively as RF (which many are), but
also lower their prices to match RF.
I believe the price cutting route will lead to disaster for any Rights Protected
seller who attempts it. They will not be able to cover their costs of marketing
and production and generate a profit. Rights Protected plays may be able to win a
few percentage points of sales back from the major RF providers, but at the
significantly lower prices it will not be enough to improve their bottom line.
Others advocate spending whatever it takes to put as many images as possible
on-line and to promote the hell out of the site. This is "new economy" thinking.
Sellers insist that such actions will produce an income stream, and it probably
will. But costs could easily far exceed the income stream. The object is to turn
a profit, not just see if you can generate a few more sales.
I believe the Rights Protected players need to accept that a significant portion of
all uses (maybe 60% of what was available a few years ago), are no longer available
to RP. They have gone to the lower cost option. The RP sellers should focus on
that 40% of the market that is left. For many reasons the 40% of buyers are not
satisfied with the Royalty Free offerings and are willing to pay significantly
higher prices than RF for the images they want. Find out what it takes to satisfy
this segment of the market and focus on their needs.
For those who say, "I can't give up any portion of the market; I've got to go after
it all," I suggest you think of Nordstorm. They have not tried to match K-Mart and
Walmart prices in order to attract the buyers that use these major retailers.
Instead they have offered a different quality of goods and service, and have a very
successful business model. Both business models co-exist. In the stock
photography business we need to think about co-existence. To be successful your
products do not have to be priced at a level that all buyers can afford. You can
build a viable business by servicing a particular segment of the market, rather
than worrying about the entire market.
Yes e-commerce sales are growing, but that does not mean that overall growth will
follow. Most e-commerce sales come with a corresponding reduction in analog sales.
In addition, it is unclear that e-commerce sales are actually less expensive in
the short term than traditional sales. A huge amount of money is being spent on
print promotion to generate e-commerce sales. In addition, a huge amount of money
must be spent scanning and keywording images that will never sell. (More on this
There is a huge initial expense in putting images on-line compared with traditional
storage methods. If those images must be updated regularly, after only a year or
so, then that "initial" expense will continue and the long range cost savings that
is hoped for won't necessarily be there.
In fact, it looks like the big on-line operators are not going to add as much new
material to their files on an annual basis as the analog operators have been adding
in the last few years. In addition the "all digital" operators will try to sell
the images, for as long as possible, that they have gone to great expense to scan
and keyword. They will be very reluctant to purge them from the database as they
This opens an opportunity for those who can develop a strategy that successfully
combines the research
and delivery of both digital and analog files.
Much of the e-commerce growth is Royalty Free. The RF people insist that because
promotion and marketing expenses are higher for RF than for traditional analog
delivery photographers must accept a lower percentage of sales. (Of course, these
sales are also for lower dollars.)
What about the consumer market?
In a recent memo to Corbis photographers, Peter Howe said, "Last year the income
derived from Corbis Productions, the consumer arm of Corbis, increase by nearly
350%... This is now a million-dollar business rapidly heading toward being a
Consider, if Corbis Production sales were $300,000 in 1998, and they increased by
350% in 1999, the 1999 totals would be $1,050.000. Even if Corbis' sales in 1999
were $2 million (multi-million by my definition) that would have put 1998 sales at
less than $600,000.
This is not a huge potential market for photographers, even under the new Corbis
contracts (more favorable to photographers in this area) where the photographer
receives 20% of Corbis's net fees. Also, consider the dollars Corbis must spend in
advertising and promotion to generate this $1 million, or so, in sales.
Getty has boasted of significant 1999 sales growth in their Consumer Channel, which
includes Art.com and American Royal Arts. This sector achieved sales of $6.1
million for 1999. However, according to Getty, due to continued investment in
Art.com, principally to generate sales, there was a $5.8 million EBITDA loss in the
When will consumers sales be greater than the expenses to generate them? It seems
unlikely that consumer use of stock photos is going to make up for loses in
business-to-business uses anytime in the foreseeable future.
One problem that Getty and Corbis face is that they must continually acquire more
companies to generate growth -- and to be competitive with each others. Lower
level managers then struggle with integrating the various elements. Often a smooth
integration is impossible to implement before the next acquisition and another
In this acquire environment, Corbis -- even though smaller -- is at a distinct
advantage. Getty must answer to stock holders. They must show continued growth in
sales on a quarter by quarter basis, and at some point the stock market may require
them to show real profits. Last year Getty's profits were $-1.93 per share.
Increasingly, investors want to see a number in the plus column.
Gates, on the other hand, has the resources to accept loses, or very slow growth,
for a very long time while he waits for the market to catch up.
The Getty/Corbis strategy of scanning everything in high resolution and having it
available for immediate e-commerce delivery offers some important competitive
openings for smaller agencies and individual photographers.
- Clients want a broader selection than these agencies are willing to offer
in high resolution scans. The clients will seek out alternatives.
- Client will look for specialist collections.
- Clients want true research. They have needs that go beyond what will be
available on-line. They want to deal with sellers who will go to the trouble to
dig through their files in an effort to fulfill the clients needs, when the
situation requires such research. They are smart enough to know when they are
being blown off by Getty and Corbis.
- Many of the best paying clients don't need immediate digital delivery. They
will want to search on-line, but smaller agencies can offer this option at much
lower cost than Getty or Corbis, by simply putting thumbnails and previews on-line.
When a high resolution scan is needed the small agency scans on demand.
Keep in mind that in only a fraction of the cases are high resolution scans ever
needed. According to Getty's own statistics only about 1/60th of their images are
scanned. Are the other images being made available to clients?
Let's look at some comparative numbers for scanning. Of the $45 per image Getty is
spending to put images on-line probably $25 is the cost of the drum scan. You can
get a Photo CD scan for $1.50 which is perfectly satisfactory for preview use,
digital use and maybe 75% of the print uses. It will not, however, be good enough
for ALL uses as the more costly drum scan would be.
It may be possible to cut that drum scan price somewhat, but scanning and
keywording is never going to approach the price of putting a transparency in a
plastic sheet and sticking it in a file drawer.
We also have to look at the number of images that must be scanned compared to the
number that ever sell. For many agencies it is not uncommon to sell less than 1%
of the images in the file and the costs of those that don't sell have to be
amortized over the ones that do.
Getty says they have 70 million images, but they also say they have 1.2 million
scanned and 80% of their sales come from 200,000 images 1/350th of the total in
file. If they have six scanned images for every one that sells their true cost of
scanning is $150 per image that sells. An agency that puts up six Photo CD scans
for every one that sells would have a scanning cost of $9.00 per saleable image.
But the real advantage for small agencies that scan on demand is that they can
offer many more images for the same money. They can offer 100 images for the
client to review for every 6 images Getty offers. The trick is not to try to be
all things to all buyers, but to carve out a niche and offer a service that will
satisfy the needs of some, but maybe not every buyer.
It is clear that there are a significant number of buyers who will want to see a
broader selection of images than Getty and Corbis are prepared to offer. Getty has
1.2 million images scanned and expects to eventually scan 3 million. Corbis has
about 2 million scanned.
One would think a database of 3 million images would surely be sufficient for most
buyers. Talk to buyers and ask them how many times the consolidators didn't have,
or were unable to find, what they needed? Also keep in mind that over 50% of the
dollars buyers are spending is still going to someone other than Getty or Corbis.
Given the up front $45 cost, the consolidators are reluctant to replace, or make
redundant, anything already in their system. Consequently, many top U.S. shooters,
on contract with the consolidators, are having most, if not all, of their new
submissions rejected. This is particularly true for those who produce travel,
scenic and wildlife images. Photographers who specialize in shooting for textbooks
are finding that Stone hasn't accepted a new image in almost two years. Meanwhile
these same images, rejected by Stone, are going into the files of specialist
libraries -- and are selling. Some photographers report that gross royalties from
the specialist libraries are going up while royalties from Stone are going down.
Why Would An Agency Not Do File Searches?
The goal of the major agencies is to develop operations that are totally digital.
They want to put a selection of images on-line, give the buyer the responsibility
of doing the research, and force them to make a choice from the images available
on-line. In theory, this can greatly reduce the agency's people costs and result
in a much higher profit margin from sales.
This theory may not be correct. As pointed out above, the costs of making images
available in this way are very high compared with the non-people costs of a
traditional operation. A great deal will depend on the number of times the chosen
images sell. At best the current data available can only offer a proof that the
theory works for some of the highest demand subject matter, not the broad cross
section of subjects that buyers want to use. So far there is no evidence that
people costs will actually be reduced. What seems to be happening is that any
reduction in traditional researchers is offset by added costs for higher paid
technicians with computer skills. Finally, there is a big question as to whether
in the long run buyers will settle for a picture that only fulfills half their
needs, rather than continuing to seek what they really want.
Getty and Corbis may tell photographers that they do file searches, but there are
too many stories from clients who request images they know were in the files of the
agency, or it predecessor, which can no longer be found. The lack of interest in
accepting images for the general file is another strong indicator that they will
not do file searches in the future. They get rid of older images based solely on
the date they were taken, and then are unwilling to replace them with similar new
If the scanned and keyworded images are the only ones shown, buyers are not
benefiting from the entire 135 million image collection Getty and Corbis have to
offer, but maybe from only 2% of it.
Editors choose images for different reasons. Most of those reasons are valid for
the particular market the editor is reaching. One danger big agencies face is that
their editors get too smart. They think their definitive research tells them
exactly what clients will want in the future, and that they can narrow their
selection accordingly. The more the big agencies focus the more openings there
will be for smaller agencies and individual suppliers to fill.
One lesson that many of my generation learned was that we could take a set of
images and send them to the editor at Agency A who would make a selection. Those
rejected by Agency A would go to Agency B, and those rejected by Agency B would go
to Agency C. Each editor would pick different images from the same take. Agency
A's sales never fell off because B or C were offering different solutions from the
same set of images. B and C were add on income and often the income from B or C
would be higher on a particular shoot because it so happened that the client who
needed that particular image went to C rather than A. The lesson is to let as many
good editors as possible look at the images produced, and go with the instincts of
each of them.
As Getty and Corbis limit selection in an effort to reduce costs, one of the
complaints we hear from art buyers is, "They want to sell the edgy stuff they have
produced, not what I need." This opens opportunities for everyone else. The
important thing is to find a way to give the buyer a good selection of what he or
she wants to look at, not to try to sell the buyer that your editor is omnipotent
and knows more than the buyer.
"Holes" that develop in the big agency files may not be in the highest demand
subject areas, but they will often be in subjects that can generate a significant
income if the images are where they can be seen by potential customers.
Smaller agencies have an opportunity to review the imagery being rejected by the
leaders and get some of these great images in play. The smaller agencies can also
win by supplying file research and personal service. These agencies will need
on-line catalogs, the capability to accept and market digitally produced images,
and the capability to scan 35mm film on demand and deliver the file digitally.
Being able to deliver files digitally, doesn't mean that you have to be prepared to
offer a total e-commerce solution. It is not necessary that every image in your
file be scanned and stored at high resolution before it can be offered for sale.
Many sellers will be able to operate successfully by negotiating via phone or
e-mail and delivering the final digital file 30 minutes to an hour after the
negotiations are completed, rather than instantaneously with the push of a button.
In rare cases even sending film will still be acceptable.
It is important to recognize that there are alternatives to total e-commerce.
Every site does not have to be e-commerce enabled in order to generate sales.
There are a number of ways sellers can offer a valuable service and broader
selection without adopting the total e-commerce route Getty and Corbis have chosen.
These methods of operation can be instituted for much less up-front costs than
Getty and Corbis are spending.
Winning Strategies for Photographers
Is The Stock Market the answer?
If The Stock Market is allowed to continue to operate as it has in the past, it may
be the best opportunity among the big agencies for photographers. Like many other
major agencies TSM has been cutting back on the size of its file, and returning
images. But, based on photographer reports, TSM's seems to be retaining a broader
cross section of material and their cuts in the file don't seem to be as deep as
those of some of the Getty agencies.
Early indications are that TSM will be allowed to operate autonomously within the
Corbis family. As we look at Corbis' existing operations it is hard to imagine
that will happen, but maybe Corbis has learned from past mistakes. It will be a
few months to a year before anyone can make a definitive prediction as to how it
will play out.
TSM photographers are betting told they will be allowed to extend their 50%
contracts for another three years. That offer, which for most photographers is not
in writing, needs to be tempered with what Corbis is offering other suppliers. The
new Corbis contract which is causing quite a stir in the industry (Story 296
on-line). The Sygma version has been rejected by photographers in France and it is
hard to tell what the eventual outcome will be.
Photographers with good advertising oriented work who have contacted Corbis (not
TSM) in the last month are being offered 40% and told there is no flexibility on
this point. At the same time photographers who have been with Corbis for a year or
more, and produce editorial work (generally of lower demand in terms of sales),
have been given new 45% contracts.
I have heard no rational explanation for why Corbis is offering photographers, who
produce the kind of work they say they want, a poorer deal than they are giving
photographers who have been with them for a while. It seems they believe these
photographers have no other option, and thus will be forced to accept whatever deal
Corbis offers. In this era when photographers are sharing information with each
other in much more depth than they ever have before, I think this strategy will
backfire for Corbis. If they discourage the first photographers who walk in the
door, and make them think they are being treated as second class citizens, they
will have a great deal of difficulty getting others interested.
I have no information as to what new photographers contacting The Stock Market will
be offered, but it is doubtful that it will be the same 50% that current TSM
There are strong indications that, in addition to TSM, Corbis intends to acquire
other advertising oriented agencies in the near future.
Setting Up Your Own Site
Many photographers think the solution to their distribution problem is to set up
their own site. They point out that the technology needed to manage a small site
is relatively simple and that they can show several hundred images for relatively
If the photographer has a real niche, maybe that will work. But, if he or she is
showing people, lifestyle, business, travel or scenic images it is unlikely they
will get many serious buyers to look at their site. The problem has to do with
promotion of the site in order to remind potential buyers that it exists. Even
when buyers look at the site, they will be unlikely to return if they don't find an
image that works for their current project on an early visit.
Thus what is needed is a critical mass or images, so the buyer has a good chance of
finding something that will work, and an advertising campaign that constantly
reminds your target buyers of the existence of the site.
I believe photographers will need to band together for the purposes of promotion,
as well as to reach a critical mass of imagery. Getty says they have over 350,000
registered users. PictureQuest has upwards of 75,000. How is an individual or a
small agency with a file that covers a broad cross section of subject matter going
to remind this number of buyers of their existence?
Cooperative sites benefit the buyer because they offer a broad cross section of
subject matter. With a single search the buyer can see the work of many
photographers on a particular subject. In addition, they spread the costs of
promoting the site among many photographers greatly reducing the promotional costs
for all individuals.
Some new sites that have recently gone on-line, or been announced are: Direct
Stock, StockMedia, Speedpix and StockPhotoIndex. I am not prepared to specifically
recommend any of these at this point, but they are worth watching and exploring.
Photographers have a better chance of earning income using sources like these with
heavy promotional budgets, than in trying to sell directly.
Outsourcing Some Of Your Work
In addition, individual photographers may find a real advantage in having someone
available (an agent) whose job it is to handle requests, do research that some
customers will need, scan on demand, negotiate, nail down the rights and handle
It is tempting for a photographer who makes relatively few stock sales to try to
handle the negotiations and retain 100% of the fee. For photographers earning most
of their income from assignments or other activities, the downside to this approach
is that stock requests invariably come when the photographer's staff is heavily
involved in an assignment project and has little time to break away to deal with
the stock request. The agent whose full time job is being available to handle such
requests, is more likely to be able to deal with client needs in a timely manner
One photographer reports that he used to do nothing but take pictures and ship them
off to his agency. Little office work was required. Now, in order to sell
pictures he has to learn much more about technology. He has to scan images and
e-mail them to clients. He has to consider setting up his own site and keywording
images. If he does that he will have to make sure the site stays up and working.
He will have to market the site. Maybe outsourcing some of these tasks is a good
An agency can help you get the images scanned and keyworded. They can help you
decide which ones are the most important to promote initially. One photographer
spent a huge amount of time scanning 30,000 of his images, only then to realize
that he was going to have to spend even more time keywording them before the images
could be effectively marketed on-line.
An agent with statistical experience on various sites can help you determine the
most effective on-line venues to use to market your particular subject matter.
Agents also get better deals from site operators because they provide a volume of
images and reduce the workload of the site operator in getting new material.
If you hope to sell outside the U.S. it may be useful to have an arrangement with a
foreign agent who can handle requests in the local language, provide technical
support and promote the site in the local area. You are much more likely to get
hits when there is active promotion of the site to qualified buyers than just
waiting for someone to find your site through a search engine. In some countries
buyers will look to English speaking researchers to find images for them rather
than doing the research themselves. Such researchers usually work for agencies.
The foreign agent understands the local pricing structures and can handle
negotiations, as well as monitor usage and take care of collections. In many cases
foreign buyers will not be able to pay by credit card, and many individual
photographers will find it difficult to accept credit card payments anyway.
Winning Strategies For Small Agencies
Tony Rojas says Corbis is focused on a "...strategy to expand its commercial
business in an all-digital model." Richard Steedman says the TSM goal is "...
bringing the world's finest photography to our clients through digital and
traditional means..." Getty has given lots of indications that they are also
headed toward "all-digital."
In the end which will succeed -- "all digital" or "digital and traditional?" Maybe
Steedman will change the focus at Corbis. There is no evidence that anyone at
Getty has a desire, or the will, to move away from the "all digital" model.
This defines the opportunity for smaller agencies and individual photographers. As
big agency editing strategies narrow in focus, opportunities for smaller
independent agencies and specialist libraries open up. More and more buyers will
have trouble finding what they want, given their editing philosophies of the
giants. Many of the photographers formerly represented by the giants will be
seeking new representation with agents who offer, both photographers and buyers,
more personal attention and service.
Agents that can strike a balance between an all-digital file and research of a more
traditional analog file will be able to offer clients a very valuable and much
needed option. Finding the proper balance that is economically viable may be
Buyers who want choice will find it necessary to go to the specialists. In total,
these small libraries have many more editors, each with their own distinctive point
of view, and with a knowledge of their particular subject area. They provide a
more varied and eclectic file than the consolidators ever will. The philosophy of
limited choice, produced in high volume, may work in off-the-rack clothes or auto
manufacturing, but in the creative business of photography variety and unique
vision are much more important.
Smaller agencies have an advantage because most buyers want more than one or two
sources of images. They want options and will support the options that provide
reasonable, friendly service.
Agents will be able to license rights to images not physically in their possession.
They will do this by building networks of subsidiary relationships. Once the deal
has been negotiated the agent will be able to have a high resolution file delivered
on-line from the primary source.
In the new "globalization" a different type of sub-agent alliance may be useful.
In such an alliance two companies agree to work together in a very intimate way.
The functions of the sub-agent may be to market to local buyers, provide research
of several on-line databases, negotiate, monitor uses, collect and pay the creator.
It will be extremely important that they know the local customs and speak the
language. In some cases they may have to provide technological assistance to new
It may not be necessary for these sub-agents to physically handle high resolution
files. The producer can upload the high resolution file to a storage site where it
can be accessed by the buyer after the sale is negotiated. In theory, the
sub-agent does not have to play any part in the management of the image storage
On the other hand, we are hearing from some forward thinking sub-agents that they
will still need to have a piece of film in-house which they can scan on demand.
This may be an intermediate step the industry will have to live with for a while,
rather than just delivering digital files from the home office.
These services can be of great value to the American photographer trying to do
business in a foreign country. In some cases the photographer may deal directly
with the foreign agent. In others there may be an advantage if several
photographers deal through one prime agent who builds a network of sub-agents for
Specialist libraries will be forced to hold the line on prices and maybe even raise
prices for the images they sell. Compared with the sales they could make five
years ago, they can count on losing a certain percentage to RF. If they make fewer
sales they must earn more per use in order to cover their costs, and provide their
photographers with a reasonable return on investment.
The changes have just begun. There are opportunities. But many of the old rules
and old ideas about how the business should operate will no longer apply. Sorting
out which new proposals are pie-in-the-sky dreams and which will be the next
killer-ap will be difficult. Image producers must give more attention to how their
work is marketed and test every assumption. No one, least of all this writer, can
claim they have the answers. The best we can do is examine options.