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.
- 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.
- 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.
- Another promising approach, maybe the key point, is to make the content more accessible for the customer. That is, to have the best segmentation, the best ranking algo, the best pattern recognition and the best control over the description data / vocabulary possible. Agencies walk this path already. The top agencies already do have ranking algos that are keyword sensitive – which is a leap forward – and allow a full set of criteria on how to rank and display search results. However, only very few agencies do have a really good disambiguation of keywords or halfway reliable translation tools. Also, there have to better ways to distinguish between main and auxiliary keywords. There is a lot more that could be written about this very important point and this topic is surely worth a closer look in some future post in this blog.
- Talking about segmentation and differentiation: Some agencies begin to understand that there are indeed different values in different kinds of content. Some types of premium pictures simply should not be sold at traditional microstock price points yet they can perfectly be sold royalty free. Thus premium collections will be a thing we will see more in the future.
- Active content development as opposed to simply “wait and see what flies in” will play a bigger role. Local content will have to be attracted. And one should not only think “China, Korea, Brazil” but also “Oktoberfest”. I am also convinced that in the medium run “content development” will also mean “content monitoring” or less euphemistically, the weeding out of embarrassing existing content stemming from the good ol’ days. And there is a lot of it.
- Agencies will also further try to conquer new territory. There is an unbelievable lot or markets out there that have barely been touched and that wait for an kick starting event.
- Agencies somehow do not seem to like seeing their contributors as businesses. Nevertheless in the long run they probably cannot avoid treating them as such if they want to compete for talent. Therefore, they will have to give their contributors much better back-ends. A first step in the right direction would be to have a two-segment back-end, one for content editing and one for financial transactions. In this case the contributor could have their picture editing outsourced while still maintaining control over their financials. It is a shame that is not possible today with most agencies. Additionally, the tools most agencies offer to contributors in order to analyze their sales are a laughing stock.
- There are numerous other things to do and consider. Alas, at the end of the day agencies will also have to wisely spend marketing Dollars, Euros, Yuans and Pesos. This may sound like a banality but it is true nevertheless: be cool and tell all the others about it in a way they can believe it.