As part of the ongoing discussion in the stock-image industry about the ethics and implications of selling the same content at different prices, James Alexander, formerly of Adobe Stock Photos, has posted some thoughts on his personal blog. This issue was first raised by Microstock Diaries, and Selling Stock has also addressed it in the past.
Alexander created and built Adobe’s stock-image offering. When Adobe decided to exit that business, he moved to Jupiterimages in early 2008, so he brings top-level experience to the discussion.
He says: “The foundation for implementing successful price discrimination strategies for stock distributors is customer segmentation in conjunction with erecting effective barriers to keep these segments separated (known as rate fences).” This is true. The rights-managed model has always segmented customers by having different prices for advertising, editorial, book publishing or the use of the image on a product. Yet Alexander goes one step further: “I strongly believe that customer segmentation should lead to the definition and building of new market segments beyond the creative professional.”
The current problem for traditional image sellers is that they are focused exclusively on dealing with “creative professionals”. As a group, the images these professionals buy represent a very small percentage of total images purchased. In addition, the number of images “creative professionals” use has been flat for several years and is declining in the current economy.
Meanwhile, there is a huge new group of customers out there, located and identified by the microstock sellers. The needs of this segment of buyers are growing at an astounding rate. Granted, most can not afford to pay much for the images they want to use, but usage volumes make this a very attractive market. The challenge, of course, is being able to sell the same image for a low price in one market segment, while continuing to maintain a much higher price point in another.
Alexander argues that the way to accomplish this goal is “through Web-targeting specific markets with features, functionality and messaging tailored to the unique needs of the intended audience.” There is no problem with creating such Web sites; having one site tailored specifically to customers from religious organizations, another to students, and still another to PowerPoint users has its advantages—even if the exact same images are available on all three. Such an approach might make marketing to each group easier.
However, I do not really see the need for it. I think it is possible for one site to establish one price for student use in the classroom or at home, another for religious organizations, and a third for commercial use in brochures, and to have further variables for the latter—for example, based on circulation. With such an overall strategy, it is unlikely that any users would feel they were being discriminated against any more than people under 65 are upset that seniors get discounts when they go to the movies or to some restaurants.
The key is to find a way to address the whole market without giving a select few customers tremendous discounts, as is the case when microstock sellers deal with creative professionals.