The 800 lbs gorilla, Getty Images, roars again.

Getty makes a very small fraction of photographers a lot of money. In fact, a handful (i.e. <10) even make over $500,000/year from stock image sales. They can do this because they consolidated collections and provided a one-stop shop to the image buyer. They took massive commissions, but also spent money on advertising the service, so now they can rightfully claim that they do more image sales business than their next two competitors combined (Corbis and Jupiter Images).

But times are tough, and the fact is that the three largest stock agencies represent less than 1% of professional photographers worldwide. The rise of sites like Alamy and iStockPhoto (owned by Getty) suggest that there is a larger market for images both on the supply and the demand side. In an effort to cash in on this, they have introduced Getty Open.

Of course "Getty Open" is a moniker akin to the "Democratic People's Republic of Korea." Well friend, there ain't nothing democratic about North Korea, but a little marketing will hopefully go a long way.

Getty Open is an effort to allow anyone who wants to sell an image to do so. The catch is that you'll have to pay Getty $50 per image to submit, and then give up 70% of the sale with a two-year exclusive. Their value proposition is that if the image does sell, you'll make up that money. And of course, there is some psychology going on. If I have to pay to play, then I will self-select more critically. And for some people, spending money makes them feel like they are exerting control.

But think about this. If you're a good photographer, you don't have to pay to submit to Getty. They just take your images because they know it will sell. So Open is more about monetizing the fact that more people want to be "with Getty" than they really want. Sure, they will find a few diamonds in the rough, but for the most part, this gives them a revenue stream by preying on those who don't know better. This is like putting a non-refundable deposit to get on the waiting list for a hot new condo development, and not being able to put a deposit on any other property.

There is incredible upside for Getty without much risk. Piss off photographers, but who cares. As long as they can keep their image buyers happy, who cares about photographers? After all, whining photographers don't drive the business, revenue does.

Getty didn't get to be #1 by being stupid. I would even argue that they removed inefficiencies in the market that created a larger market for stock imagery.

But don't be seduced by this one. Close the door on Open.

http://www.nytimes.com/2006/11/07/business/media/08papercnd.html

"Dean Baquet, the editor of The Los Angeles Times who defied orders from his corporate bosses to cut jobs, was forced out of his own job today, shocking his newsroom just as it was gearing up to cover election returns."

I'm not going to pretend to know all the politics of the newsroom, nor the subtleties of the newspaper business. It's been well-documented that newspaper print subscriptions are down significantly around the country (the LA Times was down 8% in the previous 6 months), as are ad placements within those newspapers. However, the curious part of this tale is that aggregate readership when the web is factored in is larger than ever, and that the LA Times operating profit margin is 20% higher than the average Fortune 500 company.

Prudent business management is proactive and not reactive, so perhaps management knows something we don't. Or perhaps management is just wrong, and misguided by a short-term numbers game rather than concerning itself about the longer term growth of the web and an obligation to provide quality news coverage. Any business has solvency as one of its pillars, but it's not the only pillar.

I'm not in denial about the decline of print, but if aggregate readership through the web is higher than print ever was, I would argue that more money and thought leadership should be put into monetization of the web. Perhaps it is ultimately the editors? fault for not finding the magic combination for web success. I'm certainly shocked that magazines and/or with declining print circulations but growing web presences seek to hire veterans of print rather than installing more forward-thinking denizens. But I digress.

If a video sharing site with rejects from America's Home Videos can attain a viewership of tens of millions and then be sold for $1.65B, then a newspaper should be able to find a modicum of financial success with quality content that doesn't result in layoffs.

Over-simplification? Let me know what you think.

A big thanks to all 800 of you who showed up for our first ever PhotoShelter party after the first day of the PhotoPlus Expo. We really didn't know what to expect, but the number of RSVPs we received were huge, and then there was that line to get in that went around the block. Maybe it was the Alphabet City vibe, DJ Clay Drinko, or maybe it was the good charm of Eddie Adams watching over his beloved Bathhouse. Or maybe it was those go-go girls.

We had a great time, and hope to see you again next year! Mark your calendars! Less than a year till the next party!

PhotoShelter has grown tremendously in the past year, but one lingering issue for us has been a better way of handling Rights-Managed inquiries for photographers. If you've ever used the system that the big guys have, then you'll know how easy it is to go through a pricing "calculator" and generate a price for a specific usage, enter your billing information and download an image.

The lack of human intervention to process the sale means that there is less "friction," and thus the sale is more likely to occur.

But these automated pricing calculators with integrated sales and delivery systems have been the domain of large stock houses because the cost to develop and maintain them is high. This has two effects: 1) If photographers and agencies try to sell on their own, they have to always intervene before a sale can be made, and 2) if photographers go with a stock house, they never set the price for their own image. They have to accept the price and terms of the stock house.

When we talked to photographers about how they priced their images, we heard one thing over and over again: fotoQuote. Hearing this reaffirmed what we knew already. Namely, fotoquote's pricing survey information was the industry standard. I've used it myself several times this year when magazines and book publishers have contacted me for stock sales. But because fotoQuote was a standalone program, it was still discontiguous from the sales process.

When we integrate fotoQuote and PhotoShelter, we'll be able to provide the individual photographer with a way to price and deliver Rights-Managed imagery automatically (We'll also have a negotiate feature). I really believe that this is the final link that will allow photographers to really run their businesses like the multi-hundred million dollar stock agencies. Like our other licensing types, there will be no additional charge to use this service outside of our normal fee structure.

We normally don't pre-announce features, but such is the way that the PR Machine works around trade shows like PhotoPlus Expo. And we certainly thought that this announcement was noteworthy. You'll be able to use PhotoShelter with fotoQuote in January 2007.

We've been thinking for a while about the psychology of using a service like PhotoShelter. Most people don't have the luxury of time where they can dedicate a few hours to considering how PhotoShelter can help them with archiving, distribution and sales. Even with a grace period of a week or a month, reality often makes these artificial time frames difficult.

So we're happy to release the availability of a free account. This means that you can try out most of the features of PhotoShelter without obligation indefinitely. If you find that it's working for you, then upgrade to a paying account. If it's only providing transient utility to you, then pay nothing and use it occasionally for your lower volume jobs. (You can find out more about what the free account includes here).

The other happy part of this equation is that we no longer require you to enter your credit card information on sign-up. We figure if you like the service, then you can enter your billing information later.