At the recent CEPIC Congress in Dublin, Ireland, CEO of UpperCut Images Miles Gerstein offered
CEPIC Daily his assessment of the future of the stock photo industry. Gerstein previously owned PunchStock, which he sold to Getty Images in 2006, and Artville, which he sold to The Image Bank in the late 1990s. His years of experience in the industry provide him with an important perspective on where the industry is likely headed.
“This hasn’t been the greatest couple of years for the stock business,” he said.
“First, there was the growing ubiquity of the Web as an advertising medium and the need for different types of pictures. Then there was the decline of print, the mainstay source of revenue for most stock agencies. Then there was the rise of microstock and the decline of rights-managed and royalty-free prices. And then, suddenly, the revenue produced by many of the distributors who make up the famous ‘long tail’ of RF distribution declined precipitously.
"The last five years or so have been a transitional period, between—for the lack of better terms—‘old media’ and ‘new media’ opportunities. New media opportunities are more difficult to define."
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“Combine this with the glut of imagery produced in the last five years and—oh, did I mention the Great Recession, which has gripped us for the last two years—and what you have is a long-time drag on revenue, sort of like the Japanese lost decade.
“What do I see for the future? More of the same. For a while at least.
“The main problem is twofold: the first is the lack of pricing power. No one has it. The race to the bottom by microstock distributors has succeeded. Images have been almost totally commoditized. I am sure traditional distributors would love to raise RM and RF prices, but it is next to impossible, and when microstock is juxtaposed with RM and RF, cannibalization happens. I am also sure that microstock distributors have experienced a form of blowback when they added traditional RF to their mix.
“Quite frankly, I do not think it is easy being a distributor. But for the image producer, the decline in revenue has been a near disaster. The only thing for an image producer to do is to not produce and enjoy the momentary profits of an ongoing revenue stream, or to find another way to produce or obtain images that mirror the new revenue situation.
"There is more money to be made and more asset value to be created by producing films, footage, stills or stories on demand for advertising agencies, corporations, design firms and other institutional entities. The production component of our industry needs to get one step closer to the client."
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“Second, I think that the last five years or so have been a transitional period, between—for the lack of better terms—‘old media’ and ‘new media’ opportunities. Conceptually, old media opportunities are easy to define: produce high-end traditional imagery for a declining market at the new right price, which is by its nature a lower price. It is simple if you can do it. New media opportunities are more difficult to define.
“Quite frankly, I think there is more money to be made and more asset value to be created by producing films, footage, stills or stories on demand for advertising agencies, corporations, design firms and other institutional entities. The production component of our industry needs to get one step closer to the client. I am not sure that stock is a viable going-forward opportunity in the long term, whether it is stills or footage, traditional stock or microstock. One thing I can tell you, however, the skills needed to produce new media projects do not reside within corporations or even advertising agencies. It is a real opportunity.”