10 Oct 2008 Can Intervention Save the Stock Photography Industry from Microstock?

Zave Smith, Stock PhotographerZave Smith, professional stock photographer and president of the Stock Artists Alliance recently wrote an open letter to the leaders of the stock photography industry. Like many articles on the topic, the letter describes the problems of the current stock photography market. However, rather than solely describing problems, Zave actually proposes a solution: promote the most talented microstock contributors to the major collections.

Towards the end of the letter, Zave invites other industry stakeholders to tell him why his idea will not work and to share ideas that will help “put the industry on a healthier track”. Despite the late hour when I first read Zave’s letter, I posted a comment providing my thoughts on why his idea wouldn’t work. After a short email conversation, Zave agreed to remove my cumbersome late-night comment in lieu of this more structured response.

My Views

My view is that the introduction of the crowdsourcing model to the stock photography industry has distributed the power so widely that no single person, organization or alliance has enough influence to change the direction. Generally, I don’t feel Zave’s suggestions can produce results.

Despite that, I feel the discussion that Zave has initiated has value for our collective understanding of how the market is changing and particularly how we can each best position ourselves to maximize our success in the new market. So, here are my specific responses.

Promoting Microstock Photographers

When images appear on the Microstock sites that have more value, being produced by photographers with more talent these images and photographers should be immediately promoted to the major collections where they can be sold at sustainable price points.

This is already happening. Microstock photographers are aware of opportunities in the traditional market and many already spread their portfolios up and down the price spectrum of the market. Top microstockers are often approached my traditional stock agencies and many are accepting the best offers. Some elite microstockers have already moved away from producing for the microstock market altogether.

So while the very solution Zave is proposing is already occurring naturally, I see problems with doing it in a structured manner.

First, how will it remove high quality photos from the microstock market? All the photographers I know who have moved up to shooting for the traditional market have left their existing portfolios in the microstock market. What else can they do with these photos? What stock photo buyer will happily pay traditional prices for a photo that has previously sold (often thousands of times) in the microstock market?

Second, certain types of photos generate more revenue in the microstock market than they would at traditional agencies. There’s also a high level of certainty that a quality stock photo will sell in the microstock market. So while sales are more lucrative in the traditional market, there’s not the same guarantee of revenue or consistency.

Protecting the Value of Images

This idea of protecting the value of premium images also applies to the growing trend to offer major clients access to premium collection images for minimal fees. [snip] While I can understand the market need for preferred pricing and for subscription access, programs I again feel that allowing all images to be sold this way devalues all images.

I can’t speak to the traditional market subscriptions mentioned in this paragraph, but I have a different view on the idea of ‘protecting the value of images’.

  1. Digital photography made images infinitely plentiful
  2. Advances in camera technology improved the quality of everyone’s photos
  3. The Internet separated photos from the bounds of geography

These three things caused an explosion in supply to which the natural economic response is a drop in price.

Zave qualified his statement referring specifically to “premium” images, which obviously have ‘less’ exposure to downward price pressures from oversupply. This high end appears to be responding to the changes differently with some photographers raising their prices.

Beyond that caveat, the fundamental value of an image has been changed by the explosion in supply. Like anything, an image is only worth what a buyer is willing to pay. In an oversupplied market where buyers have a high level of choice, supplier competition inevitably forces prices down. The price equilibrium that is reached at each level of quality is the new value of an image. There is nothing sellers can do to organically protect value.

Zave is “urge[ing] our distributors to stop pitching Microstock to valuable commercial and publishing clients”, effectively an artificial intervention. There are two reasons why I don’t see this helping to maintain the value of images:

  1. How many big budget buyers (i.e. “valuable clients”) are unaware of microstock? If the quality and/or license is inappropriate, they will understand if they’re not pitched microstock. But otherwise, won’t they wonder why an entire market segment is missing from the pitch?
  2. From what I read there’s too much price competition among the current distributors for any one distributor to boycott pitching microstock alone. Distributors can’t even agree to do so together without raising suspicion of price collusion.

From what I see, the ‘value’ of an image has already changed, so we’re only left with protecting ‘price’. However, in a market that is now wide open you’d be working against the market forces.

Make Them Pay

I would also urge our distributors to stop pitching Microstock to valuable commercial and publishing clients. For businesses where quality images are an important part of their communication and branding, make them pay what our images are worth to them, which is far more than a buck.

Extracting the maximum amount of money from image buyers is, indeed, one way to do business. Stock photographers arguing about image pricing often portray designers who buy microstock images as evil and selfish. They often presume designers pocket the difference in price and charge their clients the same. If a professional photographer in Elbonia has production costs low enough to profit from a lower selling price, why must designers buy the locally produced photos?

Many of the inputs of my business are worth more to me than what I pay for them. I can’t work without Internet access, but if my Internet service provider started charging me in line with what the service is worth to me, I’d be switching provider very quickly. My trade publication subscriptions have enormous value to my business and are also very cheap. If they raised the price just because they knew I would pay more, I’d also be looking for alternatives. Like Royalty Free photos, many people benefit from each issue of a publication. If I commissioned research for which I was the sole benefactor, just like with a Rights Managed photo, I’d expect to pay a lot more.

Learning from the Past

I have been in the photography business for 19 years now. One of the lessons that I have learned is…

Zave has six times my quantity of experience. Twelve if you consider I’m only part time. So while I respect Zave for his experience and position in the industry and know I can learn a lot from him, I think we all have the same quantity of experience in this new market. Things are very different now. The market is now global and wide open, so many of the lessons of the past simply don’t apply. Organized promotion of microstock contributors may have worked when distribution was a barrier to entry for new agencies, but not in the current market.

The irony of me publicly opposing the views of the president of the SAA is not lost on me. My hope is that sharing our views from different ends of the market will help us each better understand the whole picture.

Come Together for Positive Change

For we are at a point in time where all of us need to come together to share our views and work together for positive change.

This is already happening too, but at the other end of the market. Microstockers are known for our strong sense of community. We collaborate and compete simultaneously, sharing ideas, providing feedback, educating each other, constantly communicating. We spontaneously unite around issues of mutual concern, rapidly rallying a crowd to provide feedback on agency changes or hunt down copyright infringements. These instant crowds disband as quickly as they form. It’s a realtime and constant conversation, taking place in forums and blogs, Twitter and Facebook, IM and SMS.

An open market is not controlled by “leaders”. It’s controlled democratically by movement of the crowd, by price and commission rates, competitive forces, and by supply and demand.   Some see this as a market ‘out of control’. Others see it as democratic, organic and egalitarian. The former group want to impose rules, suggestion solutions, form associations, anything to regain control. The latter group just look for the opportunities.

Health of the Market

A minority who invested in microstock […] early have made money but I predict as time goes on these success stories will dwindle as oversupply makes the investment less and less worthwhile.

This is true. Microstock agencies are adding over 40,000 images a week. Many traditional stock photographers are starting to contribute to the microstock market and they’re contributing high quality photos (relative to microstock) in very large quantities. With smart search algorithms the high quality photos naturally float to the top in the microstock market, raising quality levels. This rapid rise of quantity and quality is making it increasingly difficult for hobbyists and photography students to get started in stock photography through microstock.

I would argue that “unhealthy” is subjective, but that’s a big debate which I’ll leave for another post.

Survival of Traditional Stock Photographers

I see only two options for traditional stock photographers to stay profitable in the face of the changes to the industry. The first is to differentiate on quality and create images that microstockers can’t reproduce. The other is to drastically lower production values in order to compete with microstockers who can produce images much cheaper or offset costs in other ways (have a day job, use friends as models, etc).

Constructive Debate

In this topic which often elicits much ranting, Zave’s letter was calm, thoughtful and proposed logical solutions. Hopefully I’ve succeeding in responding respectfully and contributing my views in a constructive manner. I’m looking forward to more constructive debate. What are your views?

11 Comments
  • Peepo
    Posted at 14:44h, 10 October Reply

    This is really interesting and my own opinion is that I think that Zave, having seeing a slump in the traditional stock industry, is undertandably scared.

    As I see it, there is nothing to ‘fix’ or ‘unheathly’ about what is happening – Zave – this is progress – welcome to 2008!

    I believe that economics will dictate the future. As long as photographers can make money from microstock, people will always be interested in contributing, whether they earn a few or tens of thousands of dollars each month. With the success stories, more pros are interested, which drives up quality.

    If a buyer can get a similar photo for a hundredth of the price from microstock – they will do so. This affordability also creates many more buyers than there when only getty, corbis etc were around, so there is the massive volume.

    Standards in quality of microstock will inevitably rise, and my belief is the balance point comes in providing images that it would not be economical for a microstocker to produce. The returns in microstock from paying thousands of dollars up front for a single shoot may not be worthwhile.

    As long as there is the demand for such imagery, people will pay for it. If they do, someone will shoot it but there will be a balance point. No microstock photographer would like to spend $50,000 up front on a shoot, where there may be very little chance of seeing a return on that anytime soon, but selling such imagery at a higher cost outside trad microstock would be justified if the demand exists.

    If anything, I think that traditional stock agencies will become more like niche boutiques selling images that can not be found on microstock (due to cost) and will charge a premium for these images. They could cherry pick photographers from microstock/flickr etc etc to do this.

    I think that lots of ‘professional’ photographers are scared of this change, and the easiest thing is to look down at microstock, but you are really missing out on a great opportunity to be part of an exciting future. Stop fighting something inevitable progress, and join in!

    One sale of an image for $1000, or 1000 sales for $1 – it all adds up to the same!

    I respectfully recommend a great book to Zave called ‘Who Mover My Cheese’.

    • Lee Torrens
      Posted at 15:28h, 10 October Reply

      Great thoughts Peepo,

      I would add that many professional ‘traditional’ stock photographers are already in microstock, have advanced tests of microstock in place, or have already started preparing to enter microstock in a big way. That future is now.

      -Lee

  • Perrush
    Posted at 14:56h, 10 October Reply

    Let’s see what I wrote 2 years ago :

    “6.1. Introduction
    Since the start of Microstock sites there has been a lively debate wether Microstock sites are killing the stock business or not. Especially from the side of the traditional stockindustry a lot of arguments against Microstock sites has been brought forward.

    One of the arguments against Microstock sites often heard is that photography in general and the submitters in particular are the great losers of this new model. ”

    ….

    ….

    “6.5. Conclusion
    Digital photography did hurt many professional wedding- and portrait-photographers. Now Microstock sites are doing the same with the average professional stockphotographer. The only way they can stay successful is to specialize, but those who can’t distinguish themselves from the crowd will certainly have a rough time ahead. ”

    seems nothing has changed since then :o)

    for those interested in the whole article :
    http://www.perrush.be/SYF_micro_E_6.html

  • Jon Hornstein
    Posted at 15:00h, 10 October Reply

    First, thank you Zave and Lee for your calm and clear-eyed analysis of what has become a highly emotional topic for many.

    I believe that we are rapidly on our way to a world where there are 2 types of stock photographers: Those who become brand names and those who (more or less) anonymously supply images to stock agencies on a commodity basis.

    Those photographers who become brands names will need to not only create extremely high-quality, distinctive and innovative imagery, they will also need to market themselves and their work directly to photo buyers. This will require marketing savvy and at least some capital investment. But the payoff is that, if successful, they will own their brand and, most importantly, the relationship with the buyer. To be known for quality (however you want to define it), reliability and service (for example, being able to give a usage history of the image or offering partial exclusivity) enables those photographers to charge premium rates.

    The photographers who market their images through stock agencies will increasingly become suppliers of a wholesale commodity. Their imagery is used to prop up the brand of the stock agency and if the buyer was happy with the image they will go back to the stock agency but not necessarily to that photographer’s work. As Peepo points out, that doesn’t mean that photographers can’t make a living, maybe even a good living through microstock. Or even that the images are overall worse than those marketed directly by photographers. But this model guts the market for traditional stock agencies.

    I think is what spells the death of all but the most innovative and tenacious traditional stock agencies. Microstock agencies are much more efficient in gathering and distributing commodity images and individual photographers are better suited to create a meaningful brand and ensure consistent quality. Traditional stock agencies are very good at marketing, and while marketing is extremely important, in the end it’s not enough.

  • Peepo
    Posted at 15:42h, 10 October Reply

    I think that sometimes, the term ‘professional’ should be substituted for ‘older’ or ‘established’ photgrapher. I agree with Lee in that there are professional photographers in microstock. In fact, anyone in microstock earning a full time wage is a pro.

    I believe that great images will always sell. I don’t know how much future there are for generic easily copied images on microstock or trad agencies.

    The other accusation often levelled at microstock is that it’s not creative. I disagree – it’s as creative as the photographer wants to be. Maybe some photographers want to shoot the glasses on the financial reports, but equally, some go in search of something more interesting that illustrates the same concept and will still sell.

    I think the ‘pros’ or ‘artists’ will eventually realise that they can still continue to make money from photography, but they’ll be playing catch up with everyone else.

  • Cvandijk
    Posted at 18:37h, 10 October Reply

    In the whole economy you see things like this that are happening in Traditional stock and Microstock now. For example in the early days you had small shops for groceries, clothing and other stuff. At one moment someone started a supermarket with cheaper products than the ones at the small, more expensive shops. A lot of small shops felt down, but a lot of them stayed, because there are still people who think they can buy better quality things at those expensive smaller shops. A lot of those shops became niche markets, specialised in things that don’t sell at supermarkets.
    Also in fashion this happened. You can buy cheap clothes now made in China or India, or you go to a designer where you pay hundreds or even thousands of Euros/Dollars for special clothing. Also designers haver cheaper collections which they offer in other markets than their expensive designer markets.
    So that’s the same with traditional photographers coming to the microstockmarket.

    It’s just part of the rules in economy. Why would this in photography be different, specially in the digital age where photography product like camera’s and lenses are available for many more people than it used to be.
    I can understand that it scares the “older” photographers, and that they try to protect their old markets, but they won’t win that game.

  • Pablo
    Posted at 19:01h, 10 October Reply

    I think there’s one thing that a couple others touched on that’s key for Zave’s approach – exclusivity. If you have something that’s in demand that buyers can’t easily get anywhere else you then have a strong influence on price. Otherwise if it’s available everywhere buyers set the price.

    The key issue is overlap. Getty has great images but so does Istockphoto. There’s a lot of overlapping great work between micros and traditional agencies. Move that overlap of great images out of micros and make it available exclusively at a traditional agency and that agency now has greater influence on price.

    Getty is already testing the affects of a similar model with Istockphoto contributors and more recently Flickr members.

  • Ann
    Posted at 04:06h, 11 October Reply

    I have so many strong reactions to above, but I’ll keep it to this:
    Reading the above should be Step 1 for anyone considering going into stock photography.

  • Stock shooter
    Posted at 13:48h, 11 October Reply

    As someone who licenses images via both models I can speak from experience. Traditional stock agencies have never been welcoming to the newcomer. I remember contacting Masterfile, Jupiter, and Getty just two years ago and they were only interested in photographers who were experienced working with art directors, had already established a name for themselves in the editorial or advertising world, and were willing and able to pay for productions directed by the agencies (potentially costing thousands per shoot) and in the case of Jupiter, were only interested in “pay to hire” contracts.

    Meanwhile, the micros would essentially “hold the hand” of their photographers helping photographers get started, providing constructive criticism, specific critique of each image, not to mention the open and welcoming community to help photographers who had technical or creative shortcoming. The micros were receptive to all images regardless of the level of production or experience of the photographer. The micros essentially assisted in creating good stock shooters whereas the traditional stock agencies just wanted to capitalize on existing professionals.

    Micro stock is an open and free flowing of information model whereas traditional stock photography is a closed, closed lip “good ‘ol boys club” model. Micro stock clearly shows what sales, and they teach photographers how to shoot what sales not to mention essentially providing “real time” statistics on how well a photographer’s images perform.

    In spite of the success of the micro model the only agency that came close to providing this level of support and respect for their photographers was Photoshelter, which sadly closed. Sure Getty has opened the door to the average Joe photographer with their Photographers Choice (originally Lifesize) collection, but it has a prohibitive cost of $50 per image.

    So where would these “better” image be elevated too? Didn’t iStock essentially try this with iStock Pro? Failed miserably. I wont argue that Micro prices started too low, could have, should have started higher, but the blind old luddites of the old guard (traditional stock agencies) missed the boat big time and now they’re trying to play catch up, it’s way too late IMO. Ask any of the successful micros stars, it too time consuming, costly, complicated, and just not financially worth it to place images with the traditional agencies. C’mon, even Tom Grill has images on Shutter stock. Sorry Zave.

    • Lee Torrens
      Posted at 14:02h, 11 October Reply

      Hi Stock Shooter, thanks for this GREAT comment!

      Tom Grill has images on all the top microstock agencies but only around 100 images, depending on the agency. One would assume that, for someone of his caliber, this is a ‘test’ rather than an intent to make money. But your point is completely accurate – the top traditional stock photographers in the world are all making moves in the microstock market one way or another.

      -Lee

  • pdtnc
    Posted at 20:09h, 13 October Reply

    Good read there Lee.
    I’d probably have struggled to be quite so eloquent 😉

    A note on the ‘Hobbyists’, I’ll still take Photos without Microstock, Microstock just adds a bit of extra interest.
    If I wasn’t selling RF images I’d still be giving them away on places like Deviantart.com for other community based artists (no-commercial) to make use of and create. Originally starting with Photo-manipulation in Photoshop using free stock, then I started creating stock feeling that others without a camera or scanner could benefit from the stuff I scanned and shot.

    Thats my nice ethics behind starting, now its a subtle second income…

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