Inflation, Magazines and Photography: Great Drought of 2009

Posted on 7/23/2008 by Paul Melcher | Printable Version | Comments (0)

The inflation rate, as released by the U.S. government, has broken all records since 1991. Although the political and economical worlds keep talking about a possible recession, what we are facing is really nasty inflation.

The cause is quite clear: a sudden and unforeseen rise in the cost of oil. Because everything that we consume relies on oil at one point or another, everything is affected. There will be no products or services that can avoid raising prices, if they haven't already done so. Unfortunately, the one thing that will remain the same is everyone's salary, as companies try to offset the increasing costs wherever they can. If you were expecting a big fat raise this year, it won't happen.

A bit like a disease, inflation takes time to show its powerful effect. It creeps in and slowly infects the entire economy from the inside. When dealing with a country as big as America, the process takes even longer. Thus, the full effect of soaring oil prices will probably not be fully felt until 2009.

One time-tested reaction to inflation is the shift of consumer habits. People are already more careful about their spending and have started to eliminate non-essential items. One item is magazines, which will be forced to increase their shelve prices to offset rising distribution costs. Consequently, magazines will see declining sales, but this time, it will be at its worst. After all, most mags are available, for free, on the Internet, so why bother buying them?

On the other hand, it is doubtful that people will turn off their Internet connection to save money. In fact, not being able to go out as often as in the past might increase the number of those connected. This will accelerate magazine erosion. And because consumers will spend more time online, it will also drive advertisers to migrate there at faster rates.

Newspapers, which have been going through major layoffs for several years, will bleed even faster, not only because of inflation and rising cost of sales, but also because they have totally failed to make themselves interesting for the younger generation. Look around: You never see teenagers reading newspapers, and with good reason. There is nothing in there for them. It's an old medium that teens only see in boring adult hands (my own included).

Magazines' struggle with inflation will hit photography even closer to home. Combined with increased migration to the Internet, a price raise will make magazines that much less appealing. It is not going to be pretty: They will have to reduce staff and eliminate positions. Photo-editor responsibilities will be passed to art directors and let go. There'll be fewer extravagant photo shoots and assignments, and these will take place physically much closer to the publisher than before. Budget photographers will take over, and a lot of others will be unable to get work.

A Web site, unlike a magazine, doesn't need to be pretty to be attractive to readers; it needs to be effective. Thus, fancy photo shoots (for example, those done for covers) are not going to migrate to the Web with the same speed as other assignment work.

Also unlike magazines, Web sites have no need for photo directors; some hardly use trained photo editors. Knowledge of Photoshop and HTML is much more important than a degree in photography. Sooner than later, a whole breed of jobs and associated expenses will quickly disappear, directly affecting photographer and agency revenues.

We will probably see the first big magazine layoffs this winter, when big corporation start working on next-year budgets. Photographers and photo agencies will feel the full effect during 2009. The drought will be most felt by independent photographers, as photo agencies will continue to be pressured to reduce licensing fees, while online image-use rates will continue dropping below already pathetically low levels.

It will be interesting to see who wins and how, which strategies will work and which will fail. One thing is certain: It will not be good enough to be a good-enough photographer. It will also not be enough to have a niche. Finally, it will not be enough to do business the way it's always been done.

Paul Melcher is a 20-year image-industry veteran, the new director of the North American division of British editorial agency Rex Features and author of industry blog Thoughts of a Bohemian.

Copyright © 2008 Paul Melcher. 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


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