26 Jul 2007 How to Create a Microstock Agency – Part 1
Update January 2011 – this blog post is now quite dated. If you’re interested in the business of microstock agencies take a look at my industry report which covers all aspects of the industry from the agency perspective.
Microstock is still a young market. Awareness is still low in the general population, and many new agencies appear on the scene constantly. Only a handful have been successful. Most disappear or crawl along without making much impact. Their experiences, combined with those of the successful agencies, can provide us with insight into what works and what doesn’t.
This series of posts on ‘How to Create a Microstock Agency’ will explore these lessons from the market. We’ll see if we can come to any solid conclusions on what strategies provide more likely success from the agency perspective.
Why Start a New Microstock Agency
Why would you want to create a new microstock agency now? The market is well populated with smart and creative companies each with an established customer base. Together they cover most strategic combinations leaving few gaps in the market.
Still, many people still see opportunity in the market. Current web technology makes creating a microstock agency system within reach of most programmers. Beyond that, the process can seem simple from the outside. Just crowdsource some contributors to build your portfolio and then market it to buyers.
However, there’s one big hurdle that’s not so simple.
The Microstock Catch-22
A catch-22 is a logical paradox where you can’t win regardless of your choice. A common example is not being able to get your first job because you don’t have any experience, but you can’t get experience until you get a job.
Microstock has its own catch-22. A new microstock agency cannot generate revenue until it has a portfolio of photos to attract buyers, yet it can’t attract contributors to build the portfolio until they can produce buyers to provide contributors with earnings.
In most business models, the point where your business reaches a self-sustaining turnover is known as critical mass. Overcoming the catch-22 and reaching critical mass appears to be one of the major factors which determines the success of new agencies. Until they do, agencies must employ creative strategies to build their portfolio.
The established agencies proudly display their portfolio size on their websites so buyers know they have ample choice. Agencies who haven’t yet reached critical mass usually keep their figures to themselves as buyers are put off by comparatively small portfolios.
Reaching critical mass may be the biggest hurdle, but it’s not the only one. Here’s a list of some requirements for creating a competitive microstock agency.
- Funding. An agency requires resources. Development, design, hosting, marketing, reviewing and administration aren’t free, and until you reach critical mass you’re going to be funding these yourself.
- Expertise. If you have the skills to do everything yourself you’re an exceptional individual. However, while you may survive running solo, you will require specialist skills and more man-hours if your agency is to grow.
- Facilities. Photos take up a lot of disk space and microstock websites get a lot of traffic. You may survive at a commercial web host, but you’ll quickly outgrow them if your agency grows.
This is a short list, but they are not insignificant hurdles. By looking at the successful microstock agencies you can see the resources they’ve used to achieve success. None are under-funded, lacking in expertise or facilities.
Creating a microstock agency is easy. Creating a successful one is not.
In part 2 of this ‘how to start a new microstock agency series’ we take a look at the creative strategies employed by the existing microstock agencies to overcome these hurdles, successful or otherwise.