365 START YOUR OWN AGENCY
December 18, 2000
Many stock photographer have been dismayed and disheartened by recent changes in their
relationships with their large stock photo agency. Much of this has been the result of
acquisition and consolidation -- and the fallout continues. As a result many are so soured on
agencies in general that they have come to the conclusion that the only way to sell stock in
the future is through direct relationships with the clients.
While this may work for some, a better route for many photographers may be to join together in
small groups and start their own agency. These groups must agree on marketing and pricing
strategies as there are a variety of strategies to choose from. In a small agency
participants get the personal service they are seeking. Also, they are in a better position
to influence pricing policies and the percentage payout to the photographers.
Starting an agency that licenses images through the Internet is about to get a lot easier
because it will be possible to outsource two of the four main functions of an agency. Broadly
these four necessary functions are:
1 - Providing sales services that include: research, pricing, negotiating and
2 - Providing information and support to the photographers they represent;
3 - Providing technological services; and
4 - Providing marketing services.
A number of Technology Service Providers (TSP) are coming on the scene and plan to offer a
menu of services for either a fixed monthly cost, or a reasonable percentage of sales. These
organization will enable the small agent to fully outsource all their technology needs. The
TSP's also supply a certain level of marketing that varies from organization to organization
depending on how they are structured.
Basically, such organizations allow small specialized agencies to band together in joint
marketing efforts and reach a broader group of buyers at a more cost effective rate than would
be possible if they were marketing independently.
In many ways this is exactly the same strategy that a Getty Images or a Corbis is offering
individual photographers. They bring the work of many, many photographers into one pool, and
all photographers share, in one way or another, in the cost of reaching out to the world's
pool of buyers. Within this general structure there are many ways this "sharing" can be
divided up. The strategies used by Getty and Corbis are not the only possible options for
selling on-line. The various available options need to be weighed carefully, depending on the
goals and needs of the seller. The important points I want to make here are:
1 - images will not sell without marketing;
2 - new marketing options are coming on stream;
3 - by acting in small groups, individuals with like interests may be able to more cost
effectively market their production, than would be possible if they were marketing
4 - individuals will be able to exercise more control over their work and how it is handled
in the environment of a small, personal agency; and
5 - new TSP's offer the image producers the potential of testing a variety of marketing
strategies. In some cases they will even offer the opportunity to participate in print
Why is an agent needed rather than selling direct?
In the stock photo industry there will continue to be a need for personal service to the
customer and negotiated sales. In the technology world this is referred to as "High Touch"
vs. "High Tech." Most professional users don't want or expect fully automatic pricing,
particularly for the high end uses, because there are so many custom variations of use.
Sellers who insist on making everything fully automatic tend to leave huge amounts of money on
the table that customers would have been happy to pay, if asked. (See "Why Photographers
Need Stock Agents" 178 )
In order to effect such negotiations, the customers will want to be able to discuss the
project during normal business hours, whenever their need arises. Having someone available to
provide this service is one of the key reasons why an agent is needed. Agents will also have
more experience in pricing and negotiating because that is a key part of their job and they do
it more frequently than any individual.
Many photographers need to give a lot more thought to the way they would like usages of their
images priced. Some want to hold to high prices which more accurately reflect the effort and
costs that went into producing each image. Others are willing to accept some discounting in
order to increase the volume of sales believing that increased volume will result in a higher
overall return. Still others are focused on volume and are willing to do whatever it takes to
reach more buyers.
All of these strategies are legitimate and it is possible that any one of them might produce
more gross revenue than the others.
When the photographer has a specific preference he or she should make it known to the agent.
Most agents adhere to one of the above philosophies. The photographer needs to understand the
agents philosophy and whether it fits with the photographer's preference.
It is possible -- but rare -- for an agent to handle sales for different photographers using
different strategies. The agent might be more willing to negotiate the price for an image
produced by one photographer than for another, based on general instructions supplied by the
photographer. This is more likely to happen when the agent represents only a few
photographers and has a close personal understanding or each photographer's desires. The
longer the chain of command within the agency, the less likely that a particular
photographer's preferences will be observed.
Another important factor to consider is the control over sensitive issue uses. The
photographer needs to have confidence that the agent is protecting his and the model's
interests in negotiations. (See "Protecting Model's Rights"
Some photographers with certain types of specialist material -- agriculture, food or aviation
for example -- may do much better if they have someone who is an expert in the field
controlling the pricing for them. They may also want to tailor some of their marketing to
known buyers of their particular type of work rather than relying on the more general
marketing of the overall site.
Technology and Marketing
It will now be possible for an agent to concentrate on the above factors and outsource the
technology and much of the marketing aspects of the selling process. The cost of these
services per item sold should be much lower than if the agent had to set up a totally
independent technology and marketing operation. Thus, the agent has lower overhead and should
be able to successfully operate with a lower volume of sales.
The agent can concentrate on the customer service aspects of the job as well as helping their
photographers make educated decisions about the various distribution options. This includes
decisions as to which images it will be cost effective to post on-line, what TSP's to use and
what marketing strategies to embrace. It may also include assistance in captioning and
keywording images to make them easier for customers to locate.
In some cases a TSP may provide the negotiating services of an agent. This is not necessarily
bad, but the photographer needs to consider whether the TSP's strategy for pricing uses is in
total sync with their own, as well as the experience or track record the sales people have in
pricing photo uses. Would the photographer be happier having their own personal agent control
Also, the TSP is focused on their marketing and selling strategy. If the photographer is not
absolutely convinced that one selling strategy is best then he or she should test several
different TSP's with differing strategies. Doing this through an agent who can see that
scanning and keywording only needs to be done once may provide more flexibility.
The advantages of dealing with multiple TSP's needs to be weighed carefully against the
additional costs, in terms of percentage of sales, that the agent will be receiving for the
services they provide.
One place where an agent, or sub-agent, becomes absolutely necessary -- if we accept the
premise that there will be negotiation -- is in sales outside your home territory. The
marketing, pricing structures, industry practices and problems with collection are different
enough in every country that a local agent becomes an absolute necessity. It will be possible
to make some fully automatic sales without an agent, but the chances of reaching anywhere near
one's full potential in sales without an agent is slim. (See "Selling Worldwide On The
Internet" 330 )
TSP's To Consider
To illustrate some of our points we will look at various aspects of five different TSP's.
All of the above organizations except Alamy.com (and they seem to be considering it) have a
system for each agency to have their own custom site that shows the images the agency has on
the main system. If you bring a customer to your custom site they only see the images you
represent, and no others.
Workbookstock.com is the only one of these companies that has a serious track record of
selling on-line. But, as of March they are re-designing their offering and marketing strategy
and it is difficult to say how that will affect total performance. Everyone hopes that it
will result in dramatically increased sales. One clear advantages for workbookstock.com is
that they have several years of experience with the technology. Their basic on-line search
system has been tested while the other players are either building or working through the
initial stages of putting together a system.
The ideal TSP is one that just provides technological services. All other selling and
marketing services are left to the supplier to organize.
Finding A Representative
Many have looked at this idea in the past couple years and rejected it as too difficult and
complicated to set up. But, it may be time to take another look.
Finding someone with experience to represent a small group may not be that hard in today's
environment. Many very experienced sales people have either resigned or been fired from Getty
and Corbis in the last year as these companies attempt to consolidate their acquisitions.
Many of these people would be perfect to represent the interests of a small group of
photographers. With the advent of the TSP's the costs of getting into the business of
representing is no longer the capital intensive endeavor that it might have been a year or so