Many professional photographers who license their images for stock are increasingly nervous as the list of “microstock” companies continues to grow, and as large companies like Getty are buying them up.
Today, the New York Times published a story about Corbis’ entry into the microstock business with their new site, SnapVillage. Getty purchased iStockPhoto last year.
Surely, when large companies whose revenues have been largely based around the licensing of Rights-Managed images (like Getty and Corbis) lovingly embrace the microstock concept, it is the beginning of the end for professional photographers. Or is it?
I don’t think professional photographers should spend too much time worrying about microstock. These microstock companies are subject to the same processes as any other new business. We’ve all seen the phases of a new business concept.
Phase 1, Proof of concept: Someone has to be first out of the gate with a new idea. It turns an idea into someone real, that people can see and touch. If it gets a lot of attention, it helps to prove that the concept is a good one, and it fills a void in the marketplace.
Phase 2, Competitors emerge: This is where the concept is validated and improved. Competition is good for an industry because it makes all products better.
Phase 3, Customer Land-grab: As the competitors duke it out, they compete for market share in whatever way they can. In some cases, this means offering super low prices. The idea is to get as many customers as possible, and then adjust your business model later on, when competitors begin to drop off. Of course, this can be dangerous, and if poorly done, can come back and hurt the company if their prices are so low that they can’t pay the bills until competitors drop off.
Phase 4, Consolidation of Competitors: As the competition heats up, and marketshare starts to define itself, the quest for even greater marketshare continues. Competitors can merge, effectively combining their customer base, or be acquired by a larger company that considers this new concept to be a threat.
Phase 5, Increasing revenue/profits: Business are supposed to make money, not lose it. You cannot sell products at a loss forever and still expect to be in business. For a while you can justify the loss as a “marketing expense” but at some point a company needs to show revenue growth, year over year. Selling images at $2 and $5 each isn’t going to produce the kind of revenue growth that makes investors happy. Pressure comes from within. Increase revenues!
Now that Getty and Corbis have both officially entered the microstock business, we’re getting a glimpse of the kind of purpose that microstock is going to play in the professional photography business. But one thing always remains true: You get what you pay for.
Getty has been inviting select high-value iStockPhoto contributors to submit images to Getty instead – giving these photographers access to what was, until now, a previously unavailable distribution system.
These microstock products are starting to show signs of what they are truly useful for – an entrance ramp into the industry for both photographers and photo buyers.
The notion is simple: The microstock concept is good at attracting contributions from amateur photographers, for the same reason that a professional baseball has farm teams. Some photographers will get “called up to the majors,” but most won’t.
The best content will always cost more. So if a consumer enters the marketplace looking for cheap images, and then finds that, for a little bit more money they can get a better image, and for even more money they can get an even better image, companies like Getty and Corbis can expand their customer base.
The trick here for Getty and Corbis is to make sure that people interested in buying images for $5 can see the value of an image priced at $50, and $500. Professional photographers may want to consider this as an expansion of the picture buyer marketplace instead of a threat to the whole professional photo world.
So does this mean that PhotoShelter is considering entering the microstock business? Absolutely not.