iStock Launches Audio Service

Posted on 5/14/2008 by Julia Dudnik Stern | Printable Version | Comments (0)

Though the still sales of many traditional stock-licensing companies have stagnated or declined, it is important to note the continuing boom of still imagery. The recently disclosed iStockphoto revenues aptly demonstrate the effects of the boom, in combination with early market entry and continued business and technical innovation. If it remained a separate company, iStock would now be among the top five international producers. More importantly, it would be the only one without the handicap of a severely declining business line.

The Getty-owned microstock announced it will launch a royalty-free audio service in September. In addition to holding the record for the total number of stock-licensing transactions, this addition makes iStock the first company to offer still photography, illustration, Flash files, video and audio in one place, under one payment model.

iStock plans to offer a range of audio content, from spoken word and voice to instrumental, ambient and sound-effect audio tracks. With prices ranging from $1 to $25 per clip, the service is positioned to be complementary to Getty’s Pump Audio.

Goldman Sachs recently analyzed Getty Images risks and projected revenues. The chief risk identified was cannibalization by microstock and competition from other lower-priced rivals. Creative stills, currently more than half of Getty’s total revenue, are expected to drop to 29% by 2012. While specifics may differ, the situation is much the same at Corbis and Jupiterimages. Supporting statistics are underscored by the hurried diversification of stock-licensing leaders.

In addition to the downward trend in pricing, the content mix is changing. We are far from the prophesized death of the still image, but still-image licensing is a wholly different matter in a market increasingly shifting toward integrated multimedia content. The public’s consumption of video, audio and other rich formats is growing at rates that outpace still imagery, particularly among “digital natives” and other younger demographics.

iStock is neatly positioned to capitalize on these two key market trends.

The cannibalization of traditional still sales by microstock is no longer anecdotal and is growing alongside the skills and quality of work of semi-pro photographers. Given iStock’s prominence and brand recognition in the traditional-buyer market, companies that license higher-priced royalty-free audio can expect brutal competition.

Motion and audio content remain the domain of the professional for the moment. Younger forms of licensed content could follow the maturation path of stock photography. Late 1990s bloggers did not license images at all; now many are active photo buyers at microstock outlets and traditional agencies that offer Web-use discounts. Micro-priced video and audio may generate equally significant revenues from a non-traditional source. More certain that the well-being of a specific content niche is iStock itself; at present, there are no market forces that could stop or even slow down its rise to the top.

Copyright © 2008 Julia Dudnik Stern. 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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