16 Apr 2008 LuckyOliver Shutting Down
LuckyOliver have announced that they’ll be closing down on May 15. Before this date all unused credits must be used and contributors above the threshold must request payout. Contributors below the threshold can have their balance converted to credits.
LuckyOliver chief Bryan Zmijewski provided details in a blog post and a site-wide alert. He explained that LuckyOliver investors chose to close the business rather than invest the extra capital required for further growth.
The Lesson for the Market
LuckyOliver’s strategy was near faultless. They focussed on the fundamentals and long-term growth, they did everything as simply as possible, and they communicated with the market acting upon feedback when it was appropriate. They also innovated, creating the Sideshow which introduced the midstock pricing and concept to the stock photography market.
This closure proves that not even an ideal strategy is enough to successfully sustain a microstock agency. Financial resources are required at every stage of the development process, not just when creating the technology. This is the lesson for new and aspiring microstock agencies.
Personally
I met Bryan last year and we spoke at length about the market, LuckyOliver and the future of stock photography. There really is truth to the rumor that when he talks strategy it makes your brain hurt. He was exceedingly generous with information and tips for me as a new microstock market blogger, and he took the time to understand where I was going.
I’m disappointed that LuckyOliver is closing primarily because I was looking forward to seeing what else Bryan was going to bring to the market with LuckyOliver. I can’t wait to find out what’s next for him.
Thankyou, Bryan, for your generosity and communication over the past year. …and for the LuckyOliver t-shirt which I now consider a collector’s item.
Photonomikon
Posted at 12:02h, 16 AprilI have to say this is a big disappointment. I had stopped uploading for a few months now due to the almost inexistent sales but now I won’t even get the $10 that they owe me. Convert to credits and buy images? What’s the point? I wouldn’t have any use for them anyway.
Lorraine Swanson
Posted at 15:36h, 16 AprilI feel a little personal failure over this. Many of us feel so connected with LuckyOliver exactly because Bryan was so wonderful with his PR. We all were treated with respect, and we were encouraged to be included in their carnival. We believed in his dream and loved his innovation. I guess I’m disappointed because I thought LuckyOliver stood a good chance of shaping the future of this business. I don’t think we’ve seen the last of Bryan Zmijewski. I wonder what is next.
Stephen Strathdee
Posted at 16:16h, 16 April>LuckyOliver’s strategy was near faultless.
>This closure proves that not even an ideal strategy is enough to successfully
>sustain a microstock agency.
I think your personal feelings are getting the better of you, and you need to take a step back before writing your analysis. Clearly, this closure shows that their strategy was quite flawed and very far from ideal. Had it been flaultless and ideal, they would have thrived, and not failed after less than two years. Perhaps if anything is to be learnt it is this: failure to adequately address the needs of the marketplace will inevitably lead to failure.
Lee Torrens
Posted at 16:48h, 16 AprilOf course you’re spot on, as usual, Stephen.
To elaborate, I think the flaw in their strategy was to focus too much on the future and not enough on the present. Their strategy was (in my opinion) faultless in the long-term perspective, but to the detriment of their cashflow and immediate profitability. Having higher turnover would likely have encouraged the further funding rounds that didn’t come.
-Lee
Jeff Clow
Posted at 21:41h, 16 AprilI think their biggest flaw was not having enough marketing muscle to bring actual buyers to their site.
Sold images at the site were too few and way too far apart for most of us who contributed there….
A shame to see them go – but not really suprising considering their slow sales rate for most contributors.
pdtnc
Posted at 17:57h, 17 Aprilbit of a shame, nice folks over there at LO, interesting interface…. I had hoped things would pick up. 😐
Matt Antonino
Posted at 19:56h, 17 AprilI think the “fatal flaw” in the strategy was catering to the individual, not the corporate. Who buys IStock & SS images and subs? I’m *guessing* the vast majority of money comes from designers working in firms or corporate subscription accounts, NOT someone finding IStock one day and logging in to buy an image for their website. LO was great for one by one downloads but wasn’t catering to a professional crowd….imho. And I’m sad to see them go.
mstocker
Posted at 09:26h, 18 AprilJust found out about LO’s closing from another contributor who also found out via e-mail from a regular visitor to the site.
Why in the hell couldn’t Bryan have sent out a mass e-mail to all contributors?!
It’s not like it’s that hard to do.
He puts up this act of being a class act, and then basically says “hey, for those of you who regularly visit the site we’re closing. The rest of you, well you didn’t pay attention, so screw you.”
I’m sure there may be some out there who won’t visit the site until after May 15 and be completely floored when there is just nothing there.
Anyways, I try to login in my account and I keep getting timed out by the server! Wonderful!
Cory
Posted at 17:40h, 18 AprilThis site had a great look and feel, but I definitely felt contributors remorse once I uploaded images. Nothing was selling and I was wondering if I’d ever get enough for a payout. I guess the answer is no, I won’t.
Now, I’m wondering if I should remove all my images, so people don’t use up credits on them. I’d hate to not get paid for sales.
Verbal
Posted at 17:45h, 18 AprilYes, Cory, you should remove your images. Someone mentioned on the Odditorium that if LO goes bankrupt the creditors may seize all the assets INCLUDING OUR PICTURES. Then they can dispose of them as they wish. Naturally, you the little guy would never see any of the money and worry about how your pics would be disposed of in bankruptcy court. My ports gone. I deleted each pic one by one.
Lee Torrens
Posted at 21:33h, 18 AprilHi Verbal,
As you say your photos are “your photos”, which means they’re not the assets of LuckyOliver nor any other entity and therefore can’t be used for any purpose other than that in the contributor agreement. I wouldn’t panic.
-Lee
Vilkens
Posted at 11:22h, 23 AprilYou know, one thing that really surprises me is that there doesn’t seem to be this huge frenzy of buying towards the end of LO’s demise. People there have to pay at least $20 to get tokens, right? Well, if that’s the case, wouldn’t they want to use them up? How come we don’t see a buying frenzy? Perhaps because there WERE NO BUYERS to begin with? Eh?
Lee Torrens
Posted at 12:05h, 23 AprilI’ve experienced higher than usual sales since the announcement and I know others have too.
-Lee
Dan
Posted at 04:07h, 01 MayLee, I disagree that LO’s plan was faultless. I don’t even see where they introduced a midstock model, ever. Right up until the final month, their ads still pushed $1 per image prices to buyers.
The 30% commission was pretty low, and hardly friendly to contributors who took a chance with them. Most of my sales were for 30 cents and 60 cents, which confirms most images were sold at $1 or $2. Midstock pricing? That’s near industry lows.
The search engine for some bizarre reason took into account the amount of message board activity contributors were involved in. This was always a sore point for me, as it distracted buyers from the only thing that matters to them – image quality. In fact, I never once heard any contributor say anything good about their search engine.
Lee Torrens
Posted at 13:14h, 01 MayHey Dan,
You make some valid points, and why I qualified it as ‘near’ faultless. 😉 In the bigger picture their strategy focussed on long term growth and getting the technology right first, which is where many other agencies fall down.
Low commissions seem to more friendly to contributors than high ones, as iStockphoto with the lowest commission in the market have the highest sales because they have money to promote. Agencies with 70% commissions are often cash strapped and have no room to move with referral programs or deal making. The only agency achieving high sales with a high commission is StockXpert, and that’s because they’re backed by the Jupiter media empire.
LuckyOliver introduced the term ‘midstock’ with their sideshow facility, and the big contributors I speak to tell me that it worked with high sales volume in the $10 – $30 range.
Obviously your basic point is correct – there were some details that they could have improved. I’m sure higher sales would have made the next funding round more attainable.
-Lee
Dolly Chiang
Posted at 04:51h, 06 AprilI must admit i felt really disappointed about the site closure. I missed LO, the layout, the great look and the nice colour to it. It’s just too bad 🙁
Daniel
Posted at 01:55h, 26 JulyHi Lee!
your blog is incredible!. The info is really usefull.
Are you from Argentina or Uruguay? You are taking mate on this pic!!
Daniel from Uruguay
Lee Torrens
Posted at 11:02h, 26 JulyHi Daniel, thanks for your compliments. I’m Australian, but at the moment I’m living in Argentina. Yes, that’s mate in the pic.
-Lee