Shannon Fagan On Opportunities In China

Posted on 7/22/2011 by Jim Pickerell | Printable Version | Comments (2)

Shannon Fagan, a very successful former New York stock photographer, has set up shop in China as a consultant and content aggregater. He has spent a cumulative equivalent of 2 years in Shanghai and Beijing since 2006 working with, and doing business development for, China's commercial photo agency sector. He permanently moved to Beijing in December last year. He has interacted with nearly all the key players, support components, and service providers, and developed an “insider’s” knowledge of the opportunities and pitfalls of China’s stock photo industry. In addition he recently hosted a panel on Asian Market Opportunities at CEPIC’s New Media Day. The following interview provides some insights into the Chinese market.

JP - Has the Chinese stock photo industry been experiencing major growth since Getty entered the Chinese market in a Joint Venture in 2005.

SF – Between 2005 and 2008 the industry experienced a rapid bubble due to a massive run-up of excitement for editorial and commercial imagery devoted to the 2008 Beijing Summer Olympics. The Shanghai World Expo followed, as did the Asian Games. All of these were significant psychological factors to the development of the photo licensing industry in China and agencies here rightfully cashed in. Lifestyle shoot programs to supplement the incoming supply of sports, animal, and landscape imagery were developed by many domestic and international agencies. However, in the last couple years, many, if not all, of those programs have waned.

The back-story as to why is quite intriguing. The global economy played a role. International agencies were not financially nor strategically poised to send paid shoot teams abroad. Additionally, self-funded foreign photographers have found it extremely difficult to get access to competent and experienced production and art direction support in China.
Instead of expanding their stock photo production capabilities, some Chinese stock photo companies have diversified their investments into other unrelated, but more profitable ventures than stock photography. For Chinese investors there are perhaps more significant and guaranteed returns by investing in real estate than the imagery production business. This issue is reinforced by the reality that, on the whole, private equity money in China is excited about startups for internet traffic prowess, but not business plans relating to licensing intellectual property online.

Another reason for a dearth in supply is that local photographers don’t want to shoot stock. They want a quicker and more predictable return on the money and time they invest.

To summarize, the stock photo market in China is experiencing double-digit growth, but the supply components are stagnant.

JP – Who are the major sellers of stock photography in China and how would you rank them?

SF - Visual China/China Foto Press is the Master Delegate (former Joint Venture) for Getty Images in China, followed by Quanjing/Panorama Images, followed by IC Worldwide/ImagineChina, followed by an assortment of agencies like (an affiliate for Fotolia), Ugood, and Kachabank.  Many of these mix celebrity imagery sales with event assignments.

However, Alexa rankings list as generating by far the most searches for stock photo/illustration in China. It is ranked 129th while the sites like and hover into the 1/2000th – 1/3000th range. For a comparison of popularity, the country’s largest cell phone provider, ChinaMobile, a State Owned Enterprise cited as China’s top brand by AdAge, ranks 415th. While opinions may vary (“yes” and “no” can mean the same thing in China, which is something culturally understood only if you live here) it is reported that the vast majority of the content on Nipic is “borrowed” from other sites, possibly stolen, and thus illegally being showcased against ad revenue sales. However, there is content that can be legally licensed as well. Nipic is an interesting phenomena in China. In my conversations with various Chinese agency owners and staff, no one seems to know who actually runs, nor has anyone met’s owners or anyone working at this site.

JP – Are there any agencies worth contacting that are not in Beijing or Shanghai?

SF - CEPIC attendees were introduced to a startup in Hangzhou called Hangzhou You Hua Images & Technology Co., Ltd. It is spearheaded by several former staff of a large Chinese agency. It has become common for staff trained at major agencies to trade places and occasionally embark on their own missions outside the major companies.

JP  – How is the rest of the country serviced?

SF - Two words. Cell phones. Live over-the-phone sales account for the overwhelming majority of imagery licensing in China. Images that aren’t sold over the phone are accessed through “open source” websites showcasing content as driver to ad revenue sales. These sites come and go about as fast the “new” most popular BBS forums and hottest social media sites in China. Certainly, some e-commerce does exist, but you won’t hear agencies talking much about it.

Chinese buyers love to bargain and it’s not just a cultural requirement. They must do it to preserve the business model. Pricing is negotiable as are the required government mandated fa piao (??) receipts and manners in which clients are procured and paid.  China is a cash-only and bank transfer marketplace. Sure, you’ll find credit cards here, but only in the hands of traveling foreigners checking in at the Ritz Carlton Beijing.

JP – How much is the Chinese market expected to grow?

SF - According to Ad Age, China is on target to become the second largest advertising marketplace in the world. It is forecast to grow 16% this year, four times faster than the global average. China will be the country with the largest tourist market in the next seven years and in the coming decade we will see it surpass the U.S. consumer luxury goods market.

– Are stock image suppliers rushing to get into this growing market?

SF - One would think that would be the case, but many suppliers seem hesitant and offer the following reasons for a wait-and-see attitude:
    a. Many agencies say sales in their home markets are far too robust to bother with the comparatively lackluster sales in the world’s fastest growing ad market.  

    b. Agencies believe the Chinese will steal every image they can get their hands on.

    While there is a problem with IP, trademarks, and copyright, there is no factual evidence to suggest that still image copyright theft is any worse in China than abroad. Since globally people are stealing everything online everywhere, I’d suggest that the intellectual property theft argument as a reason to “not sell in China” is pretty much out the window.

    c. Some non-Chinese agencies have trouble getting accurate sales reports and payments. For this reason they question whether it is worth the trouble to try to deal with the Chinese market. A few of these are so fed up that they have suggested to me that they may pull out of the market.
JP – It sounds like the Chinese market is one to avoid.

SF - Over table conversation I’ve listened to a handful of stories from agencies toying with the idea of opening an office in sexy, emerging China.

For Westerners, I can’t think of a more volatile reprise to the 2008 nose dive of the traditional market than to witness foreign agency after foreign agency being brought to their collective knees in an attempt to open an office in China without expensive and time consuming planning and support. Selling in China is an aggressive and at times nasty power play of intellectually shrewd business behavior with a command hierarchy handled completely in Chinese. One survives this by getting to know the market on-the-ground.

In the other direction, Chinese agencies suggest just the opposite and look to Paris, London, and New York as dream cities to hang their hat. Western agencies have an overabundance of content to supply images to Asia, but Chinese agencies have a real problem in finding Chinese produced content they can sell abroad.

JP – Are the Chinese agencies interested in direct submissions from Western photographers, or is it really necessary to work through a Western agency that can provide the Chinese agency with a larger volume of work?

SF - Chinese agencies may indicate outwardly that they are interested in accepting submissions from direct contributors outside of China. Inwardly however, the agencies are not structured to adequately manage these submissions. It is rare for staff to speak any language other than Chinese. Written contracts are not in English. The 7 to 15 hour time difference between China and the Western world makes communication difficult. Without return emails and calls, many contributors may feel left in the dark, and rightfully so. Payments are slow and exceedingly high maintenance. Direct contributors would need to learn that there is a great borrowing scheme taking place. Image usage might be technically granted at the time of payment, but in China, all the standard rules are for the breaking. Getting paid is an entirely different set of levers that can only be pulled by the most savvy of Chinese sales staff.

JP – I have heard that when it comes to people photographs there is a “Great Wall” between what is of interest to the Chinese market and what is of interest to the rest of the world. The Chinese are only interested in pictures of people who look like them. Thus, there is virtually no demand for pictures of Western looking people. There is even a problem with using pictures of Japanese, Filipinos or Southeast Asians because the Chinese people can tell the difference. Is that true?

SF - The top selling image at Quanjing/Panorama images in 2010 was a family shot of all Korean models, supplied by a Korean agency. China likes Korean looking models because the emerging economy here longs for the lighter skin tones associated with Korean cosmetics and body types.

Chinese agencies tend to sell people images from other Asian countries because they have repeatedly failed to acquire from Chinese photographers the kind of images their customers really want.

Ask Chinese ad agencies buyers what they want and you get an entirely different set of criteria than what Chinese stock agencies have to offer. Ask the stock agencies why they don’t train their photographers to produce what the customers are asking for and they say it is not their job. Chinese photographers have little contact with those who purchase stock images so they don’t know what or how to shoot.

Part of the reason for this is that the Chinese stock photo market is much younger than its Western counterpart. If the commercial side of the business is to grow someone must first identify what customers want and then find ways to communicate that information to Chinese image creators.

Chinese photo customers often bring foreign talent to China in the hopes they will deliver innovation and creativity. However, project definitions and the support these photographers are given often tend to hamstring their efforts. It is not just a matter of being able to speak the language or having an interpreter. The culture, laws and business practices in China are so different that it becomes virtually impossible for foreign photographers to operate effectively in China without help from someone who not only has an intimate understanding of the photography business in China, but also the various idiosyncrasies of the Chinese advertising and publishing businesses.  

JP – Is there a demand for microstock or much use of microstock?

SF - There is little to no marketing for microstock. What rapidly developing middle-class in any country doesn’t desire the same quality product at a better price and easier transaction?

– Does the relative limited use of computers and the difficulty of transferring money using credit cards and paypal accounts make it difficult for the Chinese to use microstock?

SF - There is no limited use of computers in China. With 480 Million people sitting online, China has adequately prepared itself for e-commerce. What limits microstock is not a desire to find imagery online. Look at the numbers from  What limits microstock is that China loves a good bargain and kick-back between the seller and the buyer (both). The theoretical evolution of a digital fa piao  receipt is needed to help change all of this. Currently, the labor costs relative to sales price and delivery of paper fa piao  make microstock sales difficult. But then, just as I mentioned above, our industry is risk averse to enter the Chinese marketplace, so for the time being expect the status quo.

JP – Would the Chinese accept a system of payment where they purchase credits in advance of any usage and then, as they use images the appropriate credits are deducted from their account? Particularly, if the actual usage fees were significantly lower than those they were asked to pay when they are invoiced after the fact?

SF - This is being done on websites in China currently.

JP – Ellery Chua said, “There is a very strong Chinese base stock photo industry - we are talking about Getty in joint venture ownership situation here. Their own stock photo libraries have the capital to set up extensive studios - think old air craft hanger complex that take 30 to 40 mins to walk through, 1000 plus mono block heads and these are either Bron color or Prophoto not the cheapies made in China heads. I used to work for a niche stock photo library with an Asian content speciality and we were astonished by the volume in RF and RM coming out from China.” Are there stock photo operations like this in China?

SF - Despite the report above, there currently isn’t one. There are large fashion studios and furniture studios. There are multiple studios devoted to car shoots. There is no large Yuri/Hollingsworth/Feingersh/Pelaez style daylight stock studio in China. There is however Chen Man. She shoots for the cover of Chinese Vogue. Every aspiring photography graduate wants to be her, but like other markets, 99% of the photo graduates in China end up without a job. They generally change their minds and quickly move back home after school. If they are lucky, their parents find them a job. The last one I spoke with is now selling real estate in Chengdu.

Copyright © 2011 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, 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:  


  • Lane Oatey Posted Jul 23, 2011
    Fantastic interview Jim and Shannon, and a very good read. China is a challenging market right now for a lot of reasons, and Shannon nailed a few of them. I expect it will take time, but hopefully we will see the overall situation continue to progress and mature on a few of the issues mentioned above.

    One additional thing that I think should be noted by photographers interested in coming out to China, that I missed in the above conversation, is the ongoing inflation and the continued rise in cost of shooting and production. Good talent out of Shanghai and Beijing can now cost as much as one might pay in the US, or even more. Day rates for professional production assistance have also gone up dramatically.

    One of the most experienced China-based stock shooters I know stopped most of his shooting over two years ago for these reasons. Both Panorama and Eastphoto (another early Chinese lifestyle producer) have essentially stopped shooting their own wholly-owned content, with Panorama shutting down production in early 2008.

    That said, at Blue Jean we've continued to produce, and the overall stock photo market in China has come a long way in the last five years. As China changes and market conditions improve over time, I think more and more Western photographers will be tempted to 'head East'.

    And when they do, they'll find the food is really awesome.

    Lane Oatey
    Blue Jean Images

  • Gildo nicolo Spadoni Posted Jul 24, 2011

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