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Successful Stock Strategies, Part 11 |
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Written by Richard Weisgrau
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Monday, 15 May 2006 |
 This was to be the last article in this series, but now one more will follow. It has taken longer to write this part than the other ten parts. That is because the article is the result of a work in progress – my planning for my future in stock photography. Recently, I have been reading new information about developments in the stock business. It has caused me to re-examine how I will proceed at the very time I was ready to proceed. What new information? Two items in particular are slowing my planning.
In a lead story at PDN Online, news of the affect of micropayments on traditional RF stock is reported. Here is an excerpt from the story: "There is no question that these lower-priced properties – subscriptions, micropayment, whatever you want to call them – are definitely going to take market share from the high end," said Alan Meckler, CEO of Jupitermedia, during a quarterly conference call with investment analysts. Jupitermedia owns Jupiterimages, the third-largest U.S. stock photo company after Getty Images and Corbis.”
Meckler, the founder of Photos.com (a subscription licensing site) goes on to be further quoted: "The number of higher-level, large media or advertising companies starting to use subscriptions from Photos.com... has grown markedly over the last year," Meckler continued. "That is obviously a bellwether of what the future brings and the fact of the creative destruction that is going to happen here." (Emphasis added)
Meckler confirms that my projections in this series about the effect microstock would have on traditional RF are actually happening now and not about to happen as I projected. With RF under pressure from microstock, the only way to keep RF profitable is to increase its competitiveness with and to try taking more market share away from RM. How to do that? Read on.
The second bit of information flows from the announcement about Masterfile and Radius Images at this very Website (http://www.stockphotographer.info/content/view/211/92/). Therein, there are two important messages
“The primary source of images for Radius will be the contributing photographers of Masterfile, augmented by custom productions directed and financed by Masterfile with photographers, talent and locations around the world.”
“Steve Pigeon, President of Masterfile says ‘You can expect the extraordinary from Radius. We aim to set a new benchmark for the royalty-free industry with wonderful images encompassing a complete range of subjects, from brilliant lifestyles to spectacular scenics.’”
What do those quotes tell me? The first one tells me that Masterfile will be outsourcing its production to “photographers, talent and locations around the world.” Since the cost of labor is much cheaper in many countries, and the photographers are competent, and the models look no different from most models used in stock photography, Masterfile can produce wholly owned RF in countries like Russia and Hungary and similar countries with emerging economies and can save a bundle in the process. Reduced cost means increased profits. The second quote tells me that the RF images will be shot to compete with the best quality RM images. The line between RF and RM is about to narrow once again. That means RM will come under increased pressure as some RF collections improves in quality even if the cost of the RF increases because RF has lot’s of room to increase in price without coming close to RM prices. Of course, some RF will drop in price to compete with microstock. What does that look like to me? I hate dire predictions because they usually turn out to be not so dire, but I do see RM coming under extreme pressure in the near future. It is conceivable to me that agencies will begin to convert their RM collections into high quality RF collections in order to stay competitive with new and improved RF collections like the one Masterfile is promising.
The last thing that comes clear is that the wholly owned RF collections are going to increase. Getty, Corbis, and Jupiter are building up their wholly owned collections. Now Masterfile is going to do it, if they haven’t already started. That’s the top four agencies in the marketplace buying up all rights to stock images. I suspect there are other agencies doing it. In the future, I suspect it might become a standardized practice of agencies. Why give a photographer a percentage of every sale when you can pay some good photographer for a day or two to get all rights to the images you need? It’s hard to find a reason that would dissuade an agency.
What remains to be seen is whether the information and conclusions above are the beginning of a trend. I believe they are, but I am surprised at the speed at which the trend is developing. Learning that the hypothesis I advanced about the various stock models in the future is actually turning into fact in the present moment has caused me to reflect on my current but unimplemented plans for selling RM images, and it has reinforced my plans to continue marketing RP images myself.
There is also one change I will be making in the way I market my RP stock. I intend to put up my own RP site to market my work separate of my regular business Website. Last week I had a meeting with the folks at Digital Railroad (www.digitalrailroad.net ). It is place I can have my own identity as a stock provider without the problem of building an image licensing website. Digital railroad will also soon offer licensing and marketing features that I will be able to opt in or out of. Those features will make the site both hosting and licensing site. Today it is a hosting site that far outclasses any I have seen.
As for my RM images, you must recall from previous parts of this series that they are those that did not survive the RP editing. I have never counted on them for much, and I have made little effort to market them. Yet I have wanted to exploit any earning potential in them. Now I have to reconsider. I am doing that. More to come......
Go to Part 12
(c) 2006 Richard Weisgrau [contact] [bio]
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Last Updated ( Friday, 19 May 2006 )
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