"We are a broken industry that only has three choices: adapt, change or die," says Jack Hollingsworth. Though the veteran photographer continues to see immediate opportunity in traditional stock, Hollingsworth believes long-term success in this business requires a fundamental change in the business model.

Hollingsworth has remained his own top producer, working with a skeleton staff and spending three quarters of his time behind the lens for past 15 years. Hollingsworth's production company recorded record profits in 2005 and 2006. In contrast, 2007 and 2008 set records at the opposite end of the revenue spectrum.

Still, he remains optimistic despite changing industry conditions and the broader recessionary climate. While Hollingsworth credits most of the insular industry changes to microstock, he says its proliferation was a wake-up call that shook a conservative channel dominated by a few big players. Microstock is also responsible for much of the industry's technological innovation and a new degree of transparency.

There are still opportunities in the traditional space, including rights-managed, editorial and specialist photography. Hollingsworth suggests diversifying both portfolios and types of work. In the past couple of years, he has shot assignments and wholly-owned content under work-for-hire agreements, in addition to his own stock productions.

However, Hollingsworth is certain that such traditional opportunities will continue to decline. The future of stock, he says, is tapping into a vast yet unfamiliar new-buyer market. "Microstock introduced stock 2.0, and we haven't even begun to see the ramifications," he said.

The most important lesson, per Hollingsworth, is the enormous combined growth of Web 2.0 and the open-source movement, which has created a new business culture: a collaborative environment with direct customer contact. Despite the tremendous new market pioneered by microstock, Hollingsworth says that selling to it remains a mystery to most traditional pros.

He expects the creative-stock production market to continue shifting towards the amateur, semi-pro and weekend warrior. While he does not see the difference between selling 1,000 photos at $1 or fewer at higher prices, he says it isn't smart to continue competing on price or entirely subjective image quality. This means shifting focus from production to information. It means selling off a couple of stock brands, such as Red Chopsticks, which now has a new owner. It also means making a bigger investment in the Web.

"Most stock agencies are still in push mode, offering content to customers. We are going to experiment with direct conversation and product creation, using the Internet as a platform." One new ideas is Hollingsworth's soon-to-launch micro-priced collection that will deliver daily images to an opt-in list.

Among the biggest challenges is lack of market information. Unlike a list of some 60,000 buyers, circulated within the stock-licensing industry for years, the new buyer pool is a complete unknown; emerging information suggests that there are no uniting demographic characteristics.

"We know nothing about how to form direct relationships outside the traditional channel," adds Hollingsworth, who is convinced that such relationships are the future. He will explore this subject at a seminar during the upcoming Picture Archive Council of America international conference in New York.