Microstock isn’t perfect, but economic progress rarely is.

November 29th, 2009 Comments

“Economic progress doesn’t care in the slightest how much you liked how things used to be” (link), stock photography edition.

John Harrington, Microstock Creates New Markets? – No, It Devastates Existing Ones:

Stop saying “microstock creates markets” and instead try “microstock markets are devastating existing profitable markets.”

Perhaps, but it misses the point.

Existing profitable markets died because existing pricing and licensing terms for stock photography failed to adapt to structural, long-term shifts in the supply and demand for stock photography. New technologies and cultural shifts created opportunities for stock agencies to create new pricing and licensing terms, and microstock filled that need.

Of course, reality bites: Mike Masnick, Photographer Compares Microstock Sites To Pollution And Drug Dealing:

Economic progress doesn’t care in the slightest how much you liked how things used to be.

Interestingly, microstock helped create opportunities for additional innovation: more stock agencies, different licensing and revenue models and an emerging ecosystem of companies providing a range of services to photographers aiming to sell stock images and videos (examples: Photoshelter, iSyndica, LookStat).

But it doesn’t end there.

What’s obvious: the supply and demand for images has changed, and the traditional pricing and licensing terms that used to serve “existing profitable markets” simply don’t work as well as they used to. That’s why microstock emerged, a competitive response to a need for a better solution for buying and selling stock imagery.

What’s less obvious: the supply and demand for images will continue to change, and it’s highly doubtful that microstock’s current pricing and licensing terms will always be the best competitive response in the future.

Microstock photography isn’t a perfect solution, but then again, when is economic progress ever perfect?

Remember, “traditional” stock photography is a fairly new innovation in itself, and it’s continued to change and evolve considerably over the years. Media publishers no longer employ photographers to create new images for each story; photography agencies no longer store photographs in physical forms and send out printed catalogs to photography buyers to showcase available images; rights-managed is no longer the only licensing system; and at some point in the future, agencies depending solely on existing microstock image pricing, sourcing and delivery methods will no longer be competitive in the marketplace.

That’s how innovation works.

—

More on the subject? Click here for many more notes about trends and changing business models in the photography industry.

By Taylor Davidson. Posted November 29th, 2009. Category: Innovation & Entrepreneurship, Photography Comments

SIMILAR THOUGHTS

What will the stock photography business look like in 10 years?

Creating efficient markets for images is more valuable than managing libraries of great images.

Start Here: Photography Business Models

The stock photography industry needs to be unbundled

How many photographers are “professionals”?

Dave

The main problem with Microstock Photography is that existing agencies built on the backs of amateurs who were willing to be paid a few cents on the dollar which forced more professional photographers to follow suit. Now that the existing agencies have complete control of the market and are in form control, they're dumping the amateurs they built upon, but they're still paying pennies to the pros. Unfortunately, the vast majority of microstock photographers are sheep and willing to take it.

Taylor Davidson

Existing agencies do not have complete control of the market. If they did, they would be performing much better financially. Since stock agencies pay commissions to photographers as a % of the selling price, they would surely raise prices if that would increase their profits.

The simple fact is they either can't raise prices (due to competition, etc.) or they haven't figured out how (and note that iStock et. al. are actively trying to figure out solutions to raise prices, not decrease).

The "main problem" in stock photography is really just simple economics.

sambr

Well said Taylor. Well said. So much has changed in the last decade that it is almost impossible to keep up. Distribution costs approaching zero. Production costs remaining the same, or going up. Economic collapse across the board. The traditional stock market has been hit by an almost perfect storm of change. The structural changes matched with the changing advertising platforms, all thrown on top of economic turmoil have sent shockwaves through an industry that was already suffering from a slow death at the hands of microstock. Actually, I shouldn't say microstock was killing traditional stock. Microstock was only one large part in the change. One could argue that the digital camera killed traditional stock. Or was it the internet? But then that ignores the millions of dollars that the old boys who were in stock at the turn of the millenium were able to reap.

It will be very interesting to watch how this industry changes even more over the next decade.

Taylor Davidson

New pricing and licensing models emerged because old ones no longer served the needs of buyers and sellers; to think that "microstock killed traditional stock" neglects the underlying industry changes.

Which brings us from a tired debate about microstock to an interesting debate about what a better solution for licensing images looks like. That's the opportunity...

(btw, David's comment on the original post is spot-on)