We have recently announced a policy change that disallows our photographer contributors from cross listing an image on PhotoShelter and another site where the retail price of the image is less than $50 (which translates to microstock sites). As expected, reaction to the decision was varied and vocal.
But rather than get into the emotional responses, let’s talk about the observations that led to our decision.
First, we are not in denial about microstock. Microstock is here to stay just like royalty-free licensing. We think that microstock fulfills a niche for people that 1) want low cost licensing, and 2) do not care about exclusivity. iStockPhoto’s projected revenues for 2008 make it clear that microstock is one of the few growing areas of image licensing, irrespective of our opinions of how it is affecting the industry.
When we started PhotoShelter, our goal was to create a product that enabled and empowered the individual photographer. The creation of the PhotoShelter Collection last fall was no different. We wanted to give photographers a better deal, and allow virtually anyone to participate. But helping photographers wasn’t the key business driver. Rather, it was to address the buyer sentiment that there isn’t enough diversity in the marketplace, and that the stock photo collections had stagnated.
We want to give photographers the control to pick and choose their outlets, but not so surprisingly, we began to see situations where an image was about to be sold for several hundred dollars through the PhotoShelter Collection, and then the deal was scuttled because the client found the same image on a microstock site for $1.
Microstock supporters make no apologies, and it’s clear that the good microstock shooters make thousands of dollars by selling thousands of images. They use the argument that once PhotoShelter creates a commensurate revenue stream they will happily switch over. And they are upset that we are stigmatizing their work.
I’m not sure how asking them to price consistently equates with stigmatization, but I digress.
Our policy is consistent with our belief in the value of imagery. And disallowing one distributor from selling the same product at a highly discounted rate, is the same logic that companies like Apple use to prevent the same computer from being sold at wildly varying prices. It preserves the value of their product by avoiding cannibalization on price.
The market will bear prices that range from $1 to several thousands dollars. We are choosing to play in the price range that we think is sustainable for photographers and for our business.
So yes, if you’re a microstock shooter, you will have to choose whether to list an image in one place or another. But you have the choice, and perhaps you will put a few images on PhotoShelter and make a few sales – and that simple act will show you that images run the gamut of quality and value. And as the industry settles through this tumultuous time, I think we’ll see the $1 stores co-existing with the Pradas, and everything in between.