New Media Sales

Posted on 3/4/1997 by Jim Pickerell | Printable Version | Comments (0)

63

New Media Sales



March 4, 1997




For several years there has been a great deal of discussion about the potentials
of the "New Media" market for still photographers. Some have argued
that it will be the salvation of stock photographers. Many photographers
and stock agencies have tried to test the market. Often the experts are
enthusiastic and convince the uninitiated that they have the answers, even
though it is mostly guess work.



There has been a lack of real numbers relating to actual sales because most
of the sales have been controlled by very few organizations. These organizations
have been reluctant to disclose numbers for competitive reasons.



Thus, the information we were given tended to relate to "feelings"
of where the market was headed. In this realm "fantastic growth"
for one person can be viewed as "modest improvement," or "loss"
by someone else depending on their investment and perspective. Going from
two sales to four may represent 100% growth, but the bottom line may not
be all that exciting. What is really needed is a baseline that can help
sellers gage future improvement.



In 1996 the market had come to the point where photographers and many stock
agencies were receiving payments. My goal in this issue is to try to get
a ballpark figure for overall sales and examine the new media potential.



The biggest sellers to this market, other than the clip photo producers,
are PNI and Corbis. In addition, West Stock is probably doing a brisk business
with their MUSE site on the web.



In separate stories, I have examined KPX, PNI and Corbis. In order to understand
the analysis below you need to review the information each of these stories.
Once you have finished reading any of these stories you will be able to
jump back to this location to continue reading the analysis.



The End of KPX


Sales Activity at PNI


Sales Activity at Corbis



New Media Analysis



To recap, we estimated new media sales at PNI had grown to an annual rate
of between $600,000 and $850,000 which is between 20% and 28% of their total
annual sales of stock photography.



We estimated the Corbis gross annual receipts for still photography, not
including Fine Art and Historical work is about $1,250,000. We know that
a lot of that was for uses at traditional rates which are much higher than
the new media rates meaning that one traditional sale would equal several
new media sales.



Thus, if we are generous with Corbis and allow 40% of the gross, (which
may represent as much as 80% of the transactions) was for new media we come
up with a ballpark figure of $500,000.



Put these results from the two biggest sellers to the new media market together
and we see that gross sales at the end of 1996 were at an annual rate of
$1.1 to $1.35 million. Photographers get 30% to 45% of these figures depending
on who made the sales.



A couple things should be noted. Since sales seem to have been steadily
rising in 1996, and since these figures were based on what photographers
and agencies were receiving around the end of the year, the actual 1996
gross may have been less.



Also readers will recall that in the November issue I estimated clip photography
sales at $125 million per year. Certainly the new media people are using
a lot of clip photography. If an image is available on a clip disc it is
unlikely that the new media users will pay $40 to $120 to use a Corbis or
PNI image.



Who Are New Media Users



As we move ahead it is going to be important to distinguish between certain
types of new media users, and not lump them all in one group.



There are traditional encyclopedia and textbook publisher who are publishing
CD-ROM discs of basically the same content they have in their books. Thus,
they need basically the same images the book publishers have always needed.
In theory the photographers and agencies should be earning additional fees
from these images now that there is additional usage.



I have a sense that much of the new media usage so far has been in these
areas, but I do not have access to enough detailed figures to back this
up. The PNI agencies should be requesting such an analysis from PNI.



Then there are the CD-ROM products like the Volcanos disc that Corbis has
produced. This truly uses a lot more images on the subject than are ever
likely to be used in a book. The problem is that these specialized discs
are simply not selling in quantities that will justify their production.
It would be great for photographers if this market took off, but it is beginning
to look like it won't happen. Again, it would be very useful to have some
idea of the percentage of new media sales thus far that have come from this
"specialized disc" market.



Then there is desktop publishing by small users who have never been stock
photo buyers in the past. Is this a big segment at this time? Are these
buyers businesses? Associations? Non-Profits? What? Despite all the promotion
do these organizations really know that Corbis and Publishers Depot exist?



Consumer Market



Then there is the consumer market. This is both Net and CD-ROM based. Given
Corbis' experience it looks like they think the future will be on the net,
not CD-ROM. I am inclined to agree, with one big caveat. I can't figure
how they are going to charge schools or school children for net use. How
long will they produce products like the Jefferson site (I recognize that
this is only an initial test.) if they can't make money doing it?



It is also important to keep in mind that developing information products
for digital distribution is not cheaper than traditional information delivery.
With digital we don't need paper, printing presses, printers or postal and
other traditional delivery systems.



But, we do need more computer hardware and a huge number of computer programmers.
The hours these programmers spend to produce a single product are much greater
than the printer running a printing press. It seems that in order to create
interest each site has to be designed and programmed separately. There is
no consistency. The whole process is unlikely to save money, it will only
transfer jobs.



Where does the photographer fit into all this? Images will be needed in
the information environment whether it is digital or print. But as we look
at what has been done so far, in terms of digital information delivery,
I think it is unlikely that a lot more images will be needed. It is possible
that the market will need fewer images because the redundancy that was needed
in the past won't be necessary.





Feedback


Dear Jim,

I found your comments on Corbis interesting, but I question drawing to any
conclusion yet. Most photographers wait a year of two to see any income
when they put images in a fully functional stock agency. I do not believe Corbis
is really open for business yet. I also have the impression that they have
done only limited marketing. I think we need to wait a year or so to know
the real story.

On the other hand, PNI is open, but I am concerned that the gross income
you reported is not adequate for them to cover operating costs. PNI cannot
operate in the red indefinitely, even if they have a good idea. Once again, I
feel it is too soon to draw any conclusions.

I believe that we are in an era like the one that many small towns in the
U.S. experienced. Most towns had pleasant, friendly, downtown areas with
thriving business centers that had thrived 50 to 100 years. Then new malls
opened on the outside of town, drawing customers away from the downtown
areas. Soon, many downtown stores had to close or move to the malls.

Businesses had to change or die and they had little time to make the change
and survive. The malls were not at fault. The new style of stock agency,
and its photographers, must change or suffer major losses soon.

Sincerely,

Craig Aurness


WESTLIGHT


PNI Story


Corbis Story


Copyright © 1997 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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