Future Stock . . .
By
Ron Rovtar
Managing Editor
September 21, 2005
( Editor's note: this is the first of three articles that will discuss
the future of the stock photography industry. )
Here's a mildly subversive thought:
Maybe all the recent stock industry consolidations represent something other than the victory of a new corporate paradigm. Maybe they are just a necessary bit of marketplace housekeeping -- a tidying up the old guard before truly new approaches share the spotlight.
Could the market actually be getting ready to break loose after a decade during which overall industry revenues remained stagnant while usage of the product exploded? Could the stock photography industry be preparing for renewal, much the way a great river breaks an ice jam in the early spring?
An interesting idea, though not a widely-shared one.
As the big companies absorb smaller competitors, their executives certainly believe they are solidifying their hold on the industry. Why else would they spend their millions so freely? And why should the rest of the industry disagree with them? Big guys get big for a reason. They usually know what they are doing.
But, no matter how tempting it might be to assume otherwise, there is the possibility that something even more interesting and basic is happening. Markets, like temperamental Greek deities, dance to their own erratic logic -- sometimes humbling kings and crowning those who once looked like fools.
Unintended consequences sometimes reign supreme.
Without question, a technology-driven paradigm shift is occurring in the stock photo industry. It started a dozen years ago with the first royalty-free clip disks, grew as the internet reached into homes and offices, attained flight speed with creation of sophisticated and expensive search and e-commerce technology and took off as the web became a primary tool in nearly every office in the developed world.
Sounds like the end of the story, right? Maybe not.
Indeed a good argument can be made that we are, at best, just halfway through this shift, that we have taken off, but are nowhere near cruising altitude, and that the next ten to 15 years will see some surprising turbulence before we reach the stable air at cruising altitude.
Put simply: some things we know today may not be true tomorrow.
Let's briefly discuss the very notion of predicting market trends.
The simplest predictive model, one used by most of us in our daily lives, is summarized in a phrase known to probably every Wall Street trader. "The trend is your friend," they assert, and many have made a great deal of money following this basic advice.
Applied to the stock photo industry, this would imply that large stock distributors will continue to grow at the expense of smaller sellers; that rights-managed stock photography will continue to lose market share to royalty-free and subscription services; and that independent photographers might as well go back to school to learn another trade because in-house photo departments and large production companies soon will shoot the vast majority of stock images.
But, as the most savvy Wall Street traders know, things are rarely quite so simple, which is why many append a significant caveat to the above wisdom.
"The trend is your friend," they say "until it bends at the end."
This modified version acknowledges that trends, especially aging ones, develop counter-forces that eventually pull everything in new directions. Technology stocks became wildly overpriced during the boom years of the 1990s, but plummeted dramatically when investors came to their senses in early 2000. Polyester fabric, once known as "wash and wear," achieved incredible popularity when it freed 1970s housewives from the sisyphean task of ironing, but looked cheap in the 1980s when natural fabrics became easier to maintain and were marketed as nicer looking and more comfortable.
What does this mean for stock photography? It means we must shed some of our preconceptions as the current trend "bends" in this flurry of acquisitions. Then we must look for any new forces that could exert pressure on this strange, very small and, thus, very moveable industry.
What presents itself is the notion that technology-driven change is usually a two-phase process. New technology is very expensive, giving the very rich a distinct marketplace advantage. Then the technology gets cheaper, ushering in a second, more democratic phase in which competition blossoms.
Examples abound. Once, starting a television network required big money and political connections. Today, as cable and satellite TV companies offer hundreds of channels, any firm with two video cameras and a few employees can call itself a network.
For good laugh, flip through some of the odd channels that specialize in "sports" you never heard of. Or, for something more professional, tune in CNN, the Discovery Channel, Fox, TNT, Public Television, ESPN, ESPN2 or the Disney Channel -- all relative newcomers to a business once owned by the three "major" networks.
The same phenomenon is playing out in music and movies as the so-called "indie" (or independent) labels become increasingly popular among young adults.
The path from elite to common has been followed by copy machines, image scanners, computers, mobile telephones and high resolution digital cameras, to name just a few examples.
In stock photography, this second phase has started in what is probably a typically clumsy fashion. It may, however, pick up steam.
Small, would-be suppliers need just three things to effectively compete in the stock photography marketplace in this internet age. First, they need a web site with reasonably good search, image download and e-commerce capabilities. Such tools are slowly becoming available from programmers and also from web companies that provide such functionality as an online service.
Second, small distributors need at least one employee who can answer questions and solve problems for potential license buyers. Never underestimate the value of human interaction in any sales process. Automation is important, but consumers of all types want human assurances. Successful businesses are built on relationships more than technology.
Third, the tinder for the spark, is a hub where large numbers of small distributors show their wares under one digital "roof." Few stock photography buyers will hunt through 50 or 100 web sites for an image. However, it is relatively easy to web 50, 100, 200 or even 1,000 web sites together. They don't call the internet "the web" for nothing. Bringing things together is what it does best.
A number of companies already offer the necessary products and services at a price level within reach of individual photographers and very small distributors. Alamy straddles the old and the new with a web site that looks like a traditional stock agency, but which gives photographers and other image suppliers an unusual amount of flexibility in offering images to the marketplace.
Digital Railroad, MyLoupe, IPNStock, Stock Pipeline, StockPhotoFinder, AGPix, Photogaphers Direct and others offer alternatives routes to the marketplace. Some new approaches are marginal, some will undoubtedly fail, but some will certainly succeed.
Can such groups of photographers and suppliers compete with corporate machines like Getty Images and Corbis? Of course they can, especially if the corporations keep pushing essentially the same images out the door at an ever-increasing pace so that the best images get seen in multiple -- sometimes competing -- venues. (More on this in the second article of this series.)
The more often individual images get used, the more likely it becomes that conflicting or otherwise embarrassing co-uses will surface. We've already seen a number of horror stories circulate on the internet. Expect more. And expect second thoughts from image buyers about shopping where everyone else is shopping.
Interestingly, what sometimes gets lost in discussions of selling stock photography is a simple fact that should be the starting point of all marketing considerations. License buyers are some of the most creative people in the world.
Imaginative and aware people thrive on the new and the different. Shoveling the same work at them over and over will not please them forever. And, indeed, some of these sophisticated internet users already employ non-traditional tools like Google to find fresh photography.
And why not? As the big distributors grow, they leave much incredibly good work on the sidelines. When the second half of the paradigm shift gains traction, much of this photography will find its way to market, causing some significant changes.
We'll talk more about these changes in the second and third installments of this series, which will be published here Oct. 17 and Nov. 14.
( Next: the future of royalty-free )
Alamy is at: http://www.alamy.com
Digital Railroad is at: http://www.digitalrailroad.net
MyLoupe is at: http://www.myloupe.com
IPNStock is at: http://www.ipnstock.com
Stock Pipeline is at: http://www.stockpipeline.com
StockPhotoFinder is at: http://www.stockphotofinder.com
AGPix is at: http://www.agpix.com
Photographers Direct is at: http://www.photographersdirect.com
Getty Images is at: http://www.gettyimages.com
Corbis is at: http://www.corbis.com
