Where Does the Trade Press Think the Stock Industry Is Headed?

At its annual meeting earlier this month, PACA invited four representatives of the stock photo trade press to discuss current industry trends and share their opinions of what stock photo agents might expect in the near future. The title of the panel was “Where Does The Press Think We’re Headed?”

I was one of the speakers, along with Daryl Lang of PDN, Chris Ferrone of About The Image and Ron Rovtar of Stock Asylum.

The discussion was wide ranging and the audience participated, not only with questions, but also with many insightful comments. In this article, I will try to outline several of the issues discussed. As might be expected, in many cases there was no clear agreement on the issues.

Flat Demand For RM & RF

A major trend that tends to drive all the rest is what will happen with demand for imagery. I expressed the belief that demand for RM and RF still imagery will be flat at best and could very well decline. Not everyone agreed. Many hope there will be a turnaround or a resurgence.

I base my belief on the fact that nearly all RM and RF images are used in some type of print publication. Print publications are on the decline. Much of the information and advertising that used to appear in print is now being distributed much more effectively online. While still images can and are being used online, it seems likely that much of the still image usage online will eventually be replaced by video. In addition, a large percentage of the images that are being used online are not RM & RF, but priced at micropayment levels.

Dramatic Increase In Images

There was general agreement that the number of images available for licensing has been increasing dramatically and much faster than demand, particularly in the traditional areas of the market. The end result is a lower average return per image. Agencies may be able to stabilize their revenue by adding many more images to their collections, but this presents a search problem for customers because there are too many images on any given subject to review.

It is also a major problem for photographers who must produce more and more images just to stay even.

Emphasis On Quality

Many believed the answer to today’s abundance of imagery is to develop collections with a higher level of quality. Ron Rovtar and Randy Taylor argued for developing high quality brands in order to license the images at premium prices. However, there are several factors that work against this concept and were mentioned in the discussion.

First, high quality implies tight editing. Tightly edited collections tend to be overwhelmed by the volumes of imagery of somewhat lesser quality that is available at lower prices.

It also turns out that the images editors accept into a “high quality” brand are often not the ones picture buyers are willing to pay the most money to use. When it comes to high quality imagery, one of the industry’s most successful editors was Tony Stone. But at its peak, Tony Stone Images generated no more than 5 percent of the gross sales of the industry.

We also have the example of Photographer’s Choice. When it was introduced, Getty had a very high quality brand that was tightly edited. With the introduction of Photographer’s Choice, contributors were allowed to select whatever images they wanted to put in, and they could even add images that had been rejected by the Getty editors. It turned out that for some time, at least, these rejected images earned more than twice as much as the ones the Getty editors had decided to keep. What photographers and experienced editors think are the best, most creative, highest quality images with the greatest production value are not necessarily what customers need or are willing to buy.

Ron believes competition will drive an ever-increasing emphasis on quality. Buyers will come to understand that the quality of the images they use in their promotions are the main differentiator between them and their competition. It is my opinion that if all the features and price of any two products are exactly the same and the only differentiator is the quality of the images used to promote them, that’s a pretty poor reason for a customer to use in basing a decision on which product to buy.

Frankly, I think this raises the value of a creative photograph to a much higher standard than it probably deserves in the mind of the average customer.

Photographer/Distributor Relationship

Another increasingly important trend will be the decline in the photographer/distributor relationship. Ron said, “I can’t remember when it has been lower.” He added: “In a short period of time, very few distributors will be able to continue to exist without a detailed photographer recruitment and retention program.”

I pointed out that looking ahead, there will be many fewer photographers whose aim it is to earn a living producing stock images. A larger and larger share of the images used will be produced for purposes other than earning money from them as stock. Agents will find that a higher percentage of the photos they receive will be outtakes from other projects rather than being shot specifically for stock.

The vast majority of professional photographers will be forced to focus on productions that pay an up front fee, and secondarily may provide some outtakes that can be marketed as stock later. To a great extent, professional stock photography will go back to what most of it was in the ’70s and ’80s — outtakes from assignments.

Daryl Lang predicted, “There is going to be a very much reduced base of providers, providing imagery for the entire industry.”

Wholly Owned

In order to deal with photographer dissatisfaction and eliminate the payment of royalties, many of the leading agents have moved toward wholly owning as much of their collection as possible. It looks like this trend will increase, although Ron argued that there might be trouble ahead for those want to wholly own.

Said Ron: “It will be difficult to find photographers at day rates to create the imagery agents need and at a rate they can afford. As the need for ever higher quality begins to manifest itself the pool of acceptable photographers will begin to shrink because few will be able to produce the needed imagery at a cost that enables them to make a profit.”

Facing The Micropayment Challenge

Many of the people currently offering images for sale are not all that concerned about how much they can earn from those images, or whether earnings are greater than cost of production. It is estimated that 20 to 30 percent of the micropayment stock producers are buyers of images. In many cases, their goal is not to earn money from the licensing of their images, but to support a business model that enables them to find cheap images for their design projects. The Internet and the micropayment sites have enabled this very efficient barter system.

Some of the traditional sellers believe that the amateurs producing the best images for the micropayment sites will eventually realize that they can make more money through the traditional market and will move their best images to the higher level. Getty is now encouraging that with iStock photographers. Other traditional sellers just cross their fingers and hope micropayment won’t take share from their businesses.

Daryl has been reading a lot of the blogs on the micropayment sites and he suggested that the quality will continually improve because “a lot of smart people are helping each other learn.” He continued, “Amateurs want to learn about photography. They like the challenge of learning new things.”

Daryl suggested that traditional sellers might want to actively participate on these blogs and assume the role of educators, not just license distributors.

Video Footage

The panel believed that footage will increasingly replace stills as a percentage of total image use on the Internet. Chris said it best when he commented, “While attending yesterday’s panel about Stock Footage I got the sensation of hearing the first rumbles of a freight train, still in the distance, but unquestionably headed our way and at a very high rate of speed.”

[tags]Daryl Lang, PDN, Ron Rovtar, Stock Asylum, Chris Ferrone, About the Image,Jim Pickerell[/tags]

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