BtoB or BtoC

Posted on 6/15/2011 by Jim Pickerell | Printable Version | Comments (0)

Given Internet capabilities, society is rapidly moving away from Business to Business (BtoB) transactions and more toward transaction where small Businesses sell all types of things direct to Consumer (BtoC). Some images will continue to be used in major ad campaigns and there will be other sales of stock photography at traditional prices, but the number of such requests will decline.

The vast majority of uses will be made by individuals and small businesses. In the U.S. there are 3.6 million firms with between 1 and 4 employees. There are less than 2,000 firms with more than 500 employees. There are over 21 million businesses operated by individuals with no employees. There are 52 million students that will need images for reference or school projects. All these little companies and individuals will have occasional need for images, many to promote their small, local business activities, but they will not be prepared to pay the kind of rates we have become accustomed to receiving from larger organizations.

For the most part middlemen will still be needed to design and operate the Internet hosting services that put photographers in touch with buyer. Setting up a personal web site is, at best, a first step in trying to reach the individual consumer. Photographers will still need middleman services. But, what they will need in the way of such services are quite different today than they were a decade or more ago. The way the music industry has changed with the introduction of iTunes is a good example.



Photographers who want to stay in business are going to need to explore ways to sell direct to individual consumers and be compensated based on actual individual consumer use. In the old environment that was totally impractical. The Internet, and new services being developed, are making it possible today.

Photographers who produce images on speculation and hope to earn much from them five to ten years from now need to be thinking about new business models and new ways to use imagery. They will need to be willing to price based on the value each individual consumer will receive, not price their product on 1,000 or 100,000 uses. Sellers will need to pay more attention to making a volume small sales rather than one big sale for a high price. They will also need to test new business models.



Encyclopaedia Britannica’s Image Quest is one new model. It is controlled by an old line company that expects to make a significant profit for the use of its name. That could be its fatal flaw. Nevertheless, there may be important lessons learned from this experiment. In previous stories I have outlined how the system will work. The following is a list of a few changes in the offering I would like to see, and features I hope they will add.

1 – Give contributors passwords that will allow them to access the database, but the searches and views of previews using these passwords will not be recorded as transactions. People using contributor passwords should not be able to download files.
 
2 - Give contributors the ability to search the database and see what images are available on various subjects they might be planning to shoot or supply. Contributors need to be aware of the competition.



3 – Provide under each thumbnail a count of the number of times the preview has been opened by a student. Many of the 2.3 million images in the database will never be viewed, but the same is true of all image databases. Only, a fraction of 1% of the images that are available in most databases are ever used in any printed form.

4 – Allow educators to key certain images they think students should be aware of. Indicate under each image the number of times it has been “educator recommended” (ER).

5 – Give students and contributors the ability to organize searches by the number of transactions so students can immediately see the images other users thought were the best in the category. The number of transactions for each image should also be supplied so students can gage the relative interest other students had in each of the images and contributors can determine relative interest in certain subjects. Also let users organize returns based on the newest images added to the file.

6 – Provide a way for students to find other images taken by a particular photographer.

7 – Add a small, unobtrusive, but readable copyright notice within the image at the bottom of the image file. This information would identify where someone would need to go to license rights to make other uses of the image. Since the primary purpose of this database is to be a reference work, such a notice should not be a great distraction to users.

One of the concerns with Britannica Image Quest is that students will disregard the license agreement, place images on their web sites and suddenly the images will be all over the Internet. While such a notice, by itself, will not stop students from doing this, the next person who finds the image on the student’s web site will know where to go to legally license the image. Photographers who have used this technique on their own web sites, or when delivered to customers have found this a useful way to promote themselves, and sometimes get other work.

If a small copyright notice is too obtrusive, consider some type of unique number that can be linked to a national/international database that would contain the contact information for all suppliers. The important thing is that the number should be imbedded in the image so it is likely to travel with the image wherever it is used.

8 – Provide a system that makes it easy for students to license rights for certain types of popular uses not included in the basic license. Charge a reasonable supplementary fee for such uses. For example many students will want to use certain images on their personal web sites, or as wall paper on their cell phones. Rather than requiring the student to separately contact the agency or image creator to license such rights, provide an automated system similar to the credit system used by microstock companies that will allow the student to legally license the extra use rights for an additional fee. Personal web site and cell phone uses should be one credit. The value of each credit should be in the range of $0.50 to $1.00. The minimum purchase of a package of credits should be at least $5.00 and maybe $10.00. When a particular image achieves a certain level of popularity the price might be raised. Requiring students to purchase a package of credits rather than paying for each individual use accomplishes two things: it reduces the credit card transaction costs and encourages the student to use more than one image.

Some will say that students would never use such a system, or pay anything to use images. I would call your attention to my 8-year-old granddaughter who uses an iPad app called “E Dress Shop.” With this app she needs to purchase credits with real money that allow her to purchase electronic clothes for the human-like avatars in the game. There are countless similar sites on the web.

Lots of Internet developers are designing various types of games that cost money to play, and in some cases provide some educational value. It seems likely that more and more sites and apps will be developed that charge customers small amounts of money for access to a product. Stock photos are a product. There will be greater use of images in various types of electronic activities and photographers need to figure out how to make images available and price the uses for such purposes.

Photographers must develop systems that make it possible for customers to legally acquire, at a reasonable price, the images they need rather than forcing or encouraging them to steal what they want to use.

I didn’t include Facebook in my list above as to where students might like to post some of the pictures found on Image Quest. Obviously Facebook is a place where students will want to post some of the images. I’m not sure I’m comfortable with images being posted in that way. There is no reason why photographers must accommodate every student desire. It is OK to say no to some things. If a copyright notice was embedded in the image I would be much more comfortable with Facebook postings. And, of course, whether we charge for it or not some of the images will be appropriated and posted on Facebook.

9 – Image Quest recognizes that some customers may want to use images for purposes other than those described in the Britannica’s license agreement. Britannica has provided a form which customers can use to submit requests to Britannica. The company will pass such requests on to the appropriate agency or contributor.

The current form does not have a place for an image number on it. I think it should. The images number is linked to a specific agency in the database. The message could easily and automatically be sent directly to the agency’s email address. Requests should go directly to the agency rather than through Britannica. All sending it to Britannica does is slow the response down. Britannica should not be involved in any part of the negotiating or fulfillment of supplementary requests. This is a separate line of business for the agency. Britannica could be copied on such requests. This would give the company a clear understanding of the volume of such activity on its site, but it should not have any say about compensation, or receive any percentage of fees paid.

While the payment for each Britannica transactions is low, the marketing value of the site and the opportunity to make other sales at higher rates may be an important added benefit for stock photographers. The site will also help to educate future customers that imagery has value and is not free. Students will learn that there must be some compensation if there is to be a continued flow of new work.


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 www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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