A Difficult Decision and Refocus

We have typically used the blog to inspire and congratulate. Today is atypical.

When we started to envision The PhotoShelter Collection in early 2007, we went out and conducted research to understand the needs of photo buyers. We consistently heard from a myriad of sources that they were disappointed with stock photography because it lacked diversity and realness. We talked to a number of photographers that wanted to get into the stock photography game, but didn’t know where to start. They were good photographers, but not full-time stock photographers, and therefore they were largely ineligible to play with the traditional agencies.

We believed that we could create a more democratic system – a marketplace for stock photography where virtually any one could participate. And a few months later, The PhotoShelter Collection was born. Upload your images, keyword & price, attach the appropriate releases, and voila! You were now a stock photographer.

Despite the naysayers, the photography was actually quite good. A number of stock executives and consultants corroborated this fact, and we felt good about being able to provide imagery that had largely been unseen and unlicensed before. The pricing was fair, and photographers received the majority of the sale.

We knew that sales would be challenging, but we honestly underestimated the complexity of sales. Licensing photography isn’t like selling a widget on eBay. It’s intellectual property fraught with clearance issues. Here are a few key learnings:

1.    Stock photography is a slow growing market dominated by a single player
There was a single moment for a company to capitalize in stock photography, and Getty took it. The use of stock imagery isn’t growing fast enough to create a displacement opportunity, and Getty is far too aggressive (and smart) to allow secondary players to displace them in any fashion.

2.    Research Requests move too quickly for individuals to react in a timely fashion
We believed that using the crowd to fulfill research requests would give us an enormous advantage over the competition, but the nature of the industry is such that many research requests are due within a day, making it nearly impossible for non-fulltime stock photographers to react. Research requests are therefore relegated to what they’ve always been – namely the locating of existing images within an extant library that are ready for immediate licensing.

3.    Buyers desire more diversity, but convenience (aka subscription deals) triumphs this desire
The largest consumers of stock photography are often locked into subscription deals, which makes it very difficult for them to consider alternate sources. Subscription deals are very bad for photographers, but great for business.

4.    A crowd-source model for stock will likely never work
Licensing a photo is not a simple proposition. It is not like selling a widget. There are huge intellectual property issues, technical issues, and meta data issues that are difficult for even full-time pros to grasp. Companies that represent collections of stock photography have to build entire divisions of staff to deal with rights clearances and lawsuit that arise from improper clearance.

Despite these odds, we did make incredible in-roads to agencies and publications alike. But when we viewed our growth over the past few months, we became all too aware that our trajectory wasn’t putting us on the right path. And despite repeated attempts to alter our trajectory, we were unable to substantially change it. Even though we are in the midst of our best month ever of sales, we believe that the growth trend isn’t step enough to sustain the stock photography business in the long term.

So we are exiting the stock photography marketplace, and getting back to our roots with the Personal Archive, which still gives individual photographers the tools to market and license their images themselves. That business is doing quite nicely, and we look forward to continuing to support photographers and photography.

The pundits will surely say “I told you so.” And maybe we will end up being just a tiny footnote in the history of photography, but on the other hand, we were also the largest aggregation of photographers participating in stock photography ever (And no, I do not count those places where a photo sell for $1. I remain defiantly stubborn on the microstock front as ever). We never assumed that this would be easy. Quite to the contrary. And yet, it was a goal worth fighting for. Tonight, I’m going to bed knowing that we tried something that had never been tried – a way to provide photographers with something they hadn’t had in a long time: a fair deal and respect.

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Allen Murabayashi is the Chairman and co-founder of PhotoShelter.

There are 28 comments for this article
  1. a photographer at 12:52 pm

    This very unfortunate news. Well Photoshelter, thanks for the chance to learn more about how to shoot stock and what to do with it after. Its definitely been a learning experience for me as well.

  2. daniel.cormier.myopenid.com at 2:53 pm

    I’m not sure what to say about all this. I feel like you guys have done a lot with regards to teaching photographers (or at least this photographer) about stock photography and the industry around it. I’m pretty disappointed that you’re bowing out. I don’t know if it matters, but I think that as long at PSC isn’t losing money you should keep it going. Though for all I know it’s been losing money all along. Like you said, stock photography is a slow-growing market. Maybe a year just wasn’t long enough.

  3. Terry Smith Images at 3:05 pm

    What is with all of these “Awww, that’s too bad.” comments? For those of us who are professionals this NOT a game. Receiving email announcements like this out of the blue is NOT fun, especially when you’re devoted hundreds of hours of your time to the, now failed, enterprise. The rest of the stock industry is doing just fine. Despite the CEO’s insistence, the collection failed due to the people running it, not because of the industry. I’ve posted the rest of my comments on the PhotoShelter Collection failure on The Shutterzone blog.

  4. Fabian Gonzales at 3:06 pm

    I’m sad to see it end this way – but can’t help but feel you quite the game too early. On another note, you should sell the technical infrastructure behind PSC to Alamy. They are in sore need of a working stemmer, controlled vocabulary, bulk keywording system and other contributor tools.

  5. Matt Lutton at 3:15 pm

    Allen, A real tough day. I hope we’ll hear more about the decision and future soon, but today I’m wishing the best for you and all the great psc peoplve I’ve gotten to know personally and work with. Thanks for the hard work, no matter what reason we’ve come to this point today.

  6. Oliver Nielsen at 3:24 pm

    Well, Allen. That’s how you treat all those photographers who donated their time to your project? give up after only one year? What didn’t you know before you started? You knew what you were fighting against. You’re like a wimp who enters an MMA match, only to give up when you your first few hits. Why bother in the first place? One million in marketing. Wauw. Change a whole industry. In one year? Were you naive??? I’m glad I never submitted more than around 10 images. I simply felt the keywording process extrmely slow to go through. If I was one of those unlucky souls who put in the effort to submit hundreds or even thousands of images, I’d be extremely pissed. Two other mistakes: 1. The rebranding with the new logo was a mistake and waste of time and already accumulated brand energy. 2. You need to stop calling it the Personal Archive. It seems unprofessional to a client, being shown a photographers “personal” archive. It should be called Professional Archive instead.

  7. Martin Beebee at 3:36 pm

    This is devastating news. I was really excited with the direction and attitude of PSC, and the community of photographers that had joined the effort. Thanks so much for all your work and enthusiasm. I’m sorry to see it end after less than a year, though, and wish you could have stuck it out a bit longer. Seems like a lot of effort and money has been spent already. No company is profitable in the first couple years. Why not stick it out longer?

  8. TenOx at 3:59 pm

    It was a blast. It was also considerable work resulting in very little if any return. It was sort of a typical “New York Story”. There’s a million stories in the naked city…. Time to burn some bridges, and build a few more. Really, I wish this site, business model and concept had worked out. I was close to banking on it, but then I’m a true fiscal conservative, and it takes me epochs to fully commit, and it involves a demonstrated return on investment. Good luck in the future Allen and rest of the PSC team. My best advice is to focus on the classic, while letting the trends run their courses. /ts

  9. John Griffin at 4:46 pm

    Even as a competitor, I am truly sorry to see you close your doors and wish you the best of luck in the future. I was rooting for you against Getty and liked some of your jabs 😉 Your overall attitude, innovative approach, candor, openness of information with the surveys and fairness to the photographer were really, really commendable and something we looked up to at Cutcaster. I commend your efforts and wish you the best going forward. John

  10. Michelle at 4:52 pm

    I was symphathetic to Photoshelter but also have to agree with the critical comments. 1 year is not enough to give a proof of concept and the reasoning given by Allen is not very convincing. It would be helpful to know the full story. Did the investors got nervous and pulled the emergency break? Or was the team really that naive 12 month ago?

  11. Grover Sanschagrin at 4:57 pm

    (I originally posted this in the PSC forum, reposting it here now.) Yes, this is worthy of an angry reaction – and I’m actually happy to see the anger because it means that you felt something for the product. I do think we were on the right track, and our sales were actually quite good — but not good *enough*. We raised a $4.2 million Series A round of venture funding about 2 years ago. This money was used to build the PhotoShelter Collection. Our growth plans included the need for a Series B round after about a year and a half of operation in order to take us into the next phase, but in order to raise a Series B, certain metrics needed to be hit – chief among them, sales figures. Are we guilty of being irresponsibly short-sighted? You might think so, but I don’t. We knew that we’d need additional funding to keep growing the product, and we also knew that additional funding was not guaranteed. So we work as hard as we can, do as much as we can, remain as optimistic as possible, and hope for the best. What else can you do? Raising venture capital is not easy – especially in a risky economy, and even more-so in an industry that is in decline (such as the commercial stock photo biz.) Investment strategies and interests change with the times, and that’s a harsh reality beyond anyone’s control. In the end, it was our responsibility to make things work, and I’m certainly not denying that, or trying to blame anyone else. But I know that we did everything possible, and our sales staff did an impressive job, and we made the most of our marketing dollars, and in our hearts we truly did believe that we could succeed and do our part to improve the industry. The Personal Archive is our bread-and-butter. Thousands of photographers depend on it as their archive. By closing down the PSC, we’re not only protecting the PA, but finally able to greatly improve and expand it. Although this is unfortunate news, and we all realize that a lot of people put a lot of time into uploading, captioning, keywording, and showing support for what the PSC stood for. But I am also proud of our team for being able to make this difficult business decision.

  12. wrenay at 5:11 pm

    Kudos to you for all of your hard work, willingness to take a risk, and forge new ground. I appreciate your candid post and wish you future success with your new business direction.

  13. Charles Mauzy at 7:18 pm

    Before you cast stones on the PS team and react in anger to the suddenness of this news I encourage you to pause and recognize the real effort and equity they have invested to do something great for all of us. Acknowledge what they attempted to do to help drive badly needed change in an industry desperately in need of change. The existing models are choking the life out of our creative community and there are precious few not only standing up for the community but also working hard to create new technology and new solutions to really evolve it. While it is easy to be critical of their execution and resulting progress in hindsight, from the perspective of someone very much inside this industry, they did a lot. This is a loss to our industry and my sympathies are with those at PS who have lost their jobs and those in the PSC who have lost their faith. The battle to reinvent the business and technology of photography is far from over. Unfortunately for all of us the venture capital market in general has very little understanding of our industry and even less patience. Many VC’s are a lot like those PSC contributors posting comments three months into the PS Collection’s life complaining that they had not made any sales and were ready to drop out. Little understanding of the dynamics of building a stock photo sales channel combined with ingrained risk-adverse conditioning put a gun to the head of a business only in its infancy. The PSC’s demise was truly premature – and clearly not wholly in the hands of the PS team. That said, now having made the hard choices, there is every reason to believe that PS will succeed – refocused and driving hard – with your support.

  14. jubs at 7:33 pm

    ”happy to see the anger because it means that you felt something for the product” or could it be anger at being used on a ‘project’ and now feeling the pinch of business men going for money over principle.. PSA – you must be joking.. you want us to pay you to upload, store and sell through you with a monthly subscription.. and then you want commission on top of that? i can see why you’re banking on that.. and why you have quit this to chase the profits there. astonishingly glib statement.. email.. closing the forum and discontinuing a community to save face.. using 9/11 to announce due to it’s ‘full news day’ status.. the nice words and PR rubbish has fallen away and thousands of snappers who dedicated evenings, weekends and any time they could to your project can now see PS for what it is. a few savvy and wealthy people experimenting with other peoples time.. then quitting because there was no quick buck to be had.

  15. Therese at 7:34 pm

    I’m sorry to hear that you are closing. I respected your company and its efforts. Conglomerates and monopolies rule the day and this is a sad commentary on where this economy and therefore society and culture have been heading. No one, it seems, can stop this so-called growth, which is so damaging to creative work and thought and its financial viability. The relaxation of regulation and the increased emphasis on the control of “intellectual property” and copyrights etc. that the leviathans like Getty are able to practice exists because only they have the money to do so. It’s all very dismaying. Anyway, I hope there is a future for a company like yours, perhaps reconceived, to operate again. I only used PhotoShelter for personal materials and never sold anything through you, but I did appreciate your approach to your business. Good luck with your future endeavors.

  16. Casey Prout at 9:47 pm

    As a member of the Collection and also a person who was able to attend a few photoshelter events and watch the rest online. This is sad, though I can understand the how and why. Though let me ask as a person who met allot of you guys in person in NYC for shoot the day, dont stop educating. One of the most amazing and strongest aspect of my experience with you guys was education/community events. You were able to bring amazing and modern information to us at amazing rates. And through your hosted events, or participating at other industry events brought together both the fresh photographers and industry leaders together. Please try and at least keep this part of your organization in some other way going. Also with you guys being based in NYC, what a sad day to announce such bad news. Does 9/11 need to be any more depressing?

  17. Oliver Nielsen at 8:37 am

    With the veture capital and unproven business model, and all, this is really a DotCom bubble kind of operation. No web 2.0 about PhotoShelter. Then they would have minimized the dependency on venture capital, increased the community power, changed the business model, and tried to live on, on different grounds. Closing down the PSC servers, full of images trusty users uploaded is NOT a fine solution, worthy of admiration. And Jubs writing above is right. They chose 9/11 in order to release this news on a day full of other news, especially alo leading up to FotoKina soon, with new cameras coming out etc.

  18. Mike at 3:14 pm

    “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in it’s success, then to take the lead in the introduction of a new order of things. For the reformer has enemies in all those who profit by the older order, and only lukewarm defenders in all those would profit by the new order, this lukewarmness arising partly from fear of their adversaries…and partly from the incredulity of mankind, who do not truly believe in anything new until they have had an actual experience with it.” -Niccolo Machiavaelli

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