Kzenon Überforward

In the second part of this article we looked a bit at the challenges contributors face regarding the microstock industry today. Let us discuss the agency side in this third part.

What you notice first if you look at the agencies: there are many of them. Not as many as contributors of course, but nevertheless they need to look for an USP. There always was a need like this of course but with a rapidly growing market a lack of a good strategy or distinction was easy to hide; even so a large number of agencies failed. The pressure to stick out will get much worse.

One answer to that challenge was and maybe still is to be the agency with the lowest price. But on the long run the competition cannot work on the price front alone (and indeed the run to the bottom slowed down) simply because no business can survive with the price of its product reaching zero. Also with contributors becoming more professional and building their own trademarks, microstock on the (admittedly narrow) good end will be less of a commodity than it used to be. There will be (sort of) a war for talent and it cannot be won without some fair compensation.

Thus, other measures than lowering prices and cutting contributor shares will have to be found. As always, those things are – roughly – content management and relationship management.

1. One obvious example could be to go for exclusive content. That will work for a while. The danger is that with the number of pix accumulating it will always be possible to find good pictures elsewhere. The concept may still work (if not as good as before) since with just one exclusive source to download an image it is easier for customers to check how often such image has already been downloaded and possibly used – maybe by competitors. An agency that is able to sell lots of exclusive content at a good price point may also be able to attract talented contributors who look for a way to ease the burden of account managing and wish to focus on shooting and procession pictures instead. Therefore expect to see even harder attempts by agencies to wall in their contributor base.
2. Agencies will continue to look for more content and more types of content. Nevertheless, there will be a time when sheer numbers loose their magic. With 15 or 20 million pix on stock in the big players at this point another 500.000 seem less desirable that they did three years ago. Therefore, there might be more segmentation in the type of content in the future. Some agencies lead the pack here with a full set of media pieces (editorial and commercial pictures, code snippets, illustrations, sounds, videos and so on). They will be followed. Any agency that can pull the stunt to offer such a full set of media types can also show that it is capable of running the complex IT-infrastructure to do so. That I call building trust.

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In the first part of this article we looked a bit at “what you see” in the microstock industry today. But what does all this mean? There are, depending on your function and position in the market, different answers. Let us have a look at the contributor side first. For them there are numerous implications.

1. In order to “survive” Contributors will have to produce better content. “Better” here is used in a broad sense: it does not only mean the visual quality of the picture – contributors love to focus on that. It also means that the picture has to transport a concept and the description / keywords have to verbalize this in a way understood both by the search engines and ranking algorithms of the agencies and the customers looking for pictures. Contributors will have to understand not only photography but also an agency (and their IT-systems) that treats them like air, a customer they do not know and a topic (in the picture) that is not theirs. In short: they will have to become much better in solving equations with lots of unknown variables.
2. Contributors will have to produce more content and be able to process such content down the chain. They will very carefully have to decide whether they do everything themselves or whether or not it is wise to have other people process some given task, due to quality or for economic reasons. In order to decide this they will have to become aware of the processes they use, streamline them and make them outsourceable. They will, in fact, have to become a business.
3. As with every business, the ability to act quickly and put the resources needed into every action will become more important. Microstock is a game where the contributor puts the money on the table first without knowing whether they will profit from that investment. The more one produces the more resources are needed to put in action. This is a financial as well as a logistical issue. For most new contributors with an emphasis on the first issue, for most established ones on the second.
4. Contributors will have to have a much closer look on the market. Today many contributors still operate without any market research or content development based on the premise “produce and then see what happens”.

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If you are a microstock contributor, a fellow photographer or simply following the discussions in the respective web forums you might have noticed the complaints about falling RPI’s (Return per Image), growing competition, and generally the industry going downhill. The consensus seems to be that things were much better in the past.

Is there something to that? To a certain extend: yes. Is this a bad thing? Not necessarily.

You should know that indeed there was a gilded age for microstock. That was when the industry was young enough to be sniffed at by the professional photographers but mature enough to already have a strong customer base on the demand side. There was land to be claimed and relatively little competition. Even mediocre or outright trivial pictures could be sold simply because they were cheap. Conceptually good pictures, well executed, could make you a fortune.

Well, this is over. There are no sales anymore for the USB-stick with shallow depth of field or the not so incredibly well lit tomato isolated on white. The stocks of the agencies are filled with them and most of the existing pix have accumulated such an amount of ranking-juice that for the foreseeable future they will stick on the top. If somebody looks for a trivial (read: exchangeable) picture they will have an impulse to buy something from page one. That’s it for that.

On the other side there is no such thing as an end to stock photography just because there is already a lot of stuff, such as there is no end of science just because we already know a lot. There will always niches, there will be changes in the way we take pictures, in the taste of buyers, and the way models do their hair will be different in 2013. Promised. (more…)