DIMdump

Industry Comment #24--Goodbye

As most of my readers already know, on October 31, 2006, Photolibrary of Australia purchased my former company, Index Stock.  I am moving on and will look for "other opportunities."

Now that I have left the stock photo industry, I feel I will be unable to continue contributing to this blog.  I derived most of the inspiration for my posts from the input of our artists and employees.  Without this daily contact, I doubt that I could continue to offer advice that is relevant or insights that are useful.

Still, I thought I'd contribute one final post that summarized some of what I learned in my fifteen years at the head of a middle-sized stock agency.  The list is short, but it may at least provide some historical perspective, for those who stumble across it, in the future.  The list is not in order of importance, I am afraid.

1.  Commercial art is still art.  Customers may think they are using an image because the color matched the client's logo.  They may claim they hate all stock photos.  But, whatever they say, customers enjoy looking at good images and tend to choose those that evoke emotions, stir memories, and make their pulse quicken.  They appreciate art--and after fifteen years of looking at images, so do I!

2.  It is possible for a nice person to be a great artist.  There are a few nasty people in the stock photo industry.  Some of them are good artists, and the nastier they are, they better opinion they have of themselves.  The swagger, pride, and bombast of these unpleasant people can obscure the joy of working with the legions of equally creative people, who are much more fun to spend time with.

3.  Making art is a way of life.  The many successful artist I worked with--including the nice ones I mention above--were all obsessed with their vision of the world.  Everything they saw, ate, thought, and felt got wrapped up in their images.  This single-mindedness must be trying on their kids, significant others, and friends.  As their agent, I always felt priveleged to be part of these unique visions.

4.  There is always room around the edges.  When I first took our agency on line, people were amazed that we had a digital library of 30,000 images.  Nowadays, it is not uncommon to see libraries of four million or ten million images.  Even so, there is room for hundreds of thousands more images--if you move away from the mainstream, and work around the edges.  The same is probably true for the remaining smaller stock agencies.  There should be plenty of room for them, around the edges of the industry.

5.  Be patient, be pleasant, and be willing to change.  In just fifteen years, I helped transform a sleepy mom and pop business into an Internet hub.  If you include photo sharing sites as part of the industry (and I think you should) there are now at least five multi-billion dollar corporations (Google, Yahoo, TimeWarner/AOL, HP, and CNet) and three billionaire-controlled agencies (Getty Images, Corbis, and Jupiter Media) involved in the stock photo business.  From time to time, I lost my patience, was rude or insensitive, or got stubborn on a point of principle.  I regret those mistakes, and wish I could have listened and thought longer and more carefully before I spoke or wrote.  Our industry now touches millions of people all around the world.  We will all do better if we treat each other with more respect.

If you want to reach me, it is easy enough.  The email address on the site still works and I plan to leave it up, for a while.  Thanks for everything.  Good luck and goodbye.

Searching for Truth #12--An Interesting Alphabet

We recently sent an email to our customers telling them about some of the great new images that we added to our subscription products.  To make our promotion a bit more interesting, we gave an example of a new image to match each of the 26 letters in the alphabet.

We emailed this promotion first to our Photos To Go Unlimited users.  These subscribers get access to 85,000 professional images at a 2MB size.  Most of our Photos To Go Unlimited customers are Web designers, small businesspeople, or "road warriors."

We then emailed our Index Open users.  These subscribers use high resolution versions of the same images that our Photos To Go Unlimited users see, to create advertisements, brochures, and editorial pieces.

The result was a great open rate (the number of people who saw our email an opened it / the total number of people we emails)--about double the normal for both products.  We also saw a high level of click through on the links to the new images.  I was interested to see both which links were most popular and if there was any difference between the behavior of the lower end and higher end users.

Here are the raw click through rankings for the two products (1 = the most click throughs, 2 = second highest, etc.):

The top entry is the letter "A."  I don't attribute this to intense interest in "Anatomy."  Rather, I think it is human nature to start a list like this at the top, just as we start reading a newpaper or magazine at the front.  Of course, we generally decide to skip ahead to the "good stuff," as did the viewers of these emails.

Note that both sets of viewers had "kiss" as their second-most-clicked on link.  I have always felt that words like this, that incorporate both action and concept values, are very compelling.  "Young Adult' as number three for both products reflects the heavy use of young people in all types of creative materials (they are such a desireable market to appeal to) and the fact that many of the users of our products are young (and interested in "themselves").  "Nature" is also a common choice, at number four.  I think that subscription buyers are particularly comfortable with looking to these products as a source of backgrounds and "rest images" for their work.

We diverge suddenly and sharply between entries 5 and 7 (although both groups had a "bird" selection in here, that probably was due to the "read from the front" syndrome, I mentioned above).  Our Index Open users were more interested in "jewelry" and "computers."  These are business subjects and include images that are handy for illustrating sell sheets, retail brochures, and office-related marketing materials.  Our Photos To Go Unlimited users wanted to look at "question mark" and "laughing."  Both are quirkier subjects, with less practical use.  They support the idea that these lower end users have more time and interest in experimentation and brainstorming, than their more project-focused high end counterparts.

At the bottom of the list for both groups were the animals.  "Giraffes," "zebras," and "ostriches" may be cute or exotic, but they don't fit easily into many projects.  Note though, that every word in the alphabet got some click through interest.  It seems our subscription customers want to see new images as soon as they are available.  This hunger for new material is a good sign for those images suppliers who participate in the subscription market.

Industry Comment #23--New Pricing Models

Recently, there has been a lot of interest in "new pricing models" for stock photography.  The success achieved by the royalty free license model has encouraged interest in subscription models (like our Index Open product) and the microstock model (like our Photos To Go Unlimited product).  Now, the biggest player in our industry, Getty Images, has announced plans to introduce a new variant of the rights managed model.

I believe this new approach will not be very successful.  I have three lines of thought that I have divided into "logic," "experience," and "analogy."  These lines of thinking lead me to conclude that the royalty free, subscription, and microstock models will tend to dominate any other choices--with the leading model in the long term most likely turning out to be microstock.

Logic = Why pay more for something that is hard to understand?

Despite an increase over the past few years in the price of royalty free licenses, they remain cheaper on average than rights managed licenses.  At our agency, Index Stock, the average rights managed license remains around $600 per image, with the average royalty free license around $300 per image.  Furthermore, if one considers that a royalty free license gives the recipient unlimited rights to use an image over and over, in perpetuity, the value difference is even more in favor of royalty free.

To get a rights managed license, a customer has to define exactly how she or he plans to use an image, for how long, and in what industry or context.  This creates a more complex buying situation, that may have multiple approval steps and require several adjustments to the rights managed license.  Obtaining a royalty free license is simple and direct.

If one puts the industry's licensing models on a two dimensional chart, with cost on one axis and complexity of use on the other, the differences are easy to see:

Even one-off royalty free licensing does not look to be the long-term winner.  Both subscription and microstock appear to be more attractive, from both a convenience and cost perspective.  It is logical for clients to avoid rights managed licenses, whenver they possible can.

Experience = Been there, done that!

I hate it when I start talking like a geezer, but "back in the nineties..."  Yes, back in the 1990s--in 1995 to be specific--my company introduced the industry's first microstock product.  We called it Photos To Go, and we continue to offer the product, today.  We started with a license fee of $3 per 2MB image, for use by small businesses and consumers--and gradually increased it to $39, today.  We included both rights managed and (when they came along) royalty free images.  We limited the use to one year and in certain types of printed and Web materials.  All licensing was done online, with no negotiation or haggling needed.

How was Photos To Go different from istockphoto, fotalia, and the rest of the microstock guys?  It wasn't.  It was just so early that no one back then could figure out what to do with it.  Actually, that is unfair.  Over the years, about 400,000 people have licensed images through Photos To Go or registered on its site.  That probably makes it still one of the biggest microstock products, in the industry.

So shouldn't our Photos To Go experience indicate that microstock will never be a big factor in the industry?  Sorry, but no.  Instead, it has given me ten years of experience about what people really want from a stock photo site.  Those who learned about Photos To Go LOVED it.  They couldn't understand exactly what we meant by "rights managed" and they had a very hard time understanding why they might have to renew their license to an image after one year.  They also didn't understand why they couldn't use the image in major projects, with large companies.  But, they loved it and kept coming back for more.  That is one reason that we introduced a simplified subscription-based version of Photos To Go last year, called Photos To Go Unlimited.  By offering access to more than 85,000 2MB images for only $99 (for six months), we broke into the microstock market.

I am also enough of a geezer in this industry, to remember some previous experiments that did not work so well.  I recall clearly that two of my competitors (both now under different management or different owners) tried out "simplified" rights management approaches.  Both of these experiments failed so miserably, that they were withdrawn without any further announcement.  Thanks to dedicated snooping and probing (yes, we do gossip at those industry conferencs we go to), I learned that the customers of these companies did not understand or appreciate that these new licensing systems were "simple."  They asked over and over again, if the new system was the same thing as royalty free.  When they got the bad news that instead, there were being offered a flavor of rights managed licensing, they were disappointed.  Further, it seemed that any effort to combine rights managed price categories together and reduce their complexity tended to reduce average rights managed prices.  In other words, if an agency stopped distinguishing betweeen quarter page and half page size, or between one insertion in a magazine and three, most of its customers expected to get the lower of the two former price choices, rather than a midpoint between the two.

Analogy = What other industry even tries to hassle people, so much?

It is hard for me to think of another business that expects so much knowledge and understanding on the part of its customers.  For instance:

1.  When I buy a music CD from Tower Records, do they ask me to tell them where I intend to play it, how often, how loud, and with or without watching the associated video on my TV?  If they did, would I tell them, or just go home and download the CD for free, from the Internet?
2.  When I turn on the TV to watch a program, does the TV ask me what I am wearing, what type of soda I plan to drink during the program, and if anyone else is in the room, with me?  I am sure there are certain members of Congress and our Government, who might approve of the networks doing this, but I don't think most Americans would agree with them.
3.  When I buy a newspaper, do I have to sign a document in advance agreeing not to give the newspaper to anyone else or to tell anyone about the stories I've read in it?

Of course, there are some buying decisions that have a level of complexity that is equal to the rights managed buying process.  For instance, ordering coffee at Starbucks (I marvel at the specificity of the instructions I hear--and that they appear to be understood and correctly followed, most of the time!), leasing a car (don't try to read the contracts, just sign and hope you never have an accident or problem), or buying a computer on line (menu after mind-numbing menu of options that no ordinary person could understand).  However, if you ask people how they feel about these processes, many will tell you that they hate them.  Offer them simpler and cheaper approaches (coffee at the corner deli, buying a car at the "employee price," or getting a pre-packaged computer model) and many will choose simplicity and low cost, if they can.

If you are an artist and agree with my analysis, you should be shifting your production towards royalty free material.  I have offered suggestions in previous posts about where opportunities remain for new royalty free images.  If you are one of our artists, we can give you more direction, want lists, etc.  Please contact your editor.  If you are artist who disagrees with my analysis, I will be happy if you are right, and promise not to gloat, if you are wrong!

If you are a customer and disagree with my analysis, please visit our site.  We continue to list hundreds of thousands of GREAT rights managed images--and hope you will license a lot of them, from us.  In fact, we intend to continue marketing images under any license that both protects the copyright of our artists and makes them money.  I don't know if you noticed that I slipped in one model that trumps them all--"Free."  Our industry needs to be realistic that there is a threat that our customers' desire for less cost and more simplicity will eventually drive them into this model.  We need to work hard to increase the value we offer and make it clear why all of our models are better than this one.

Searching for Truth #11--Have We Saturated the Market?

The library of my agency (Index Stock), passed the one million image mark, late last year.  At the time, it seemed a momentus occasion, well worth celebrating.  After all, I recall when we put our first image on line (1992) and when we passed the 10,000 image mark (1993).  I believe we hit 100,000 in 1996, so it took nine more years to add another zero to our image count!

I've recently read and seen announcements of stunning rates of image growth, from other players in the image distribution area.  These didn't reduce my pride in our achievement, but they did make me wonder about how much value we would create by adding our next one million images.  Have we reached the point as an industry, where we have saturated our market?

I did a simple study of seven major image distribution sites.  I searched for eight terms on each site, and recorded how many images each site claimed for that term.  Take a look at the results:

 

There is a little overlap between these sites.  For instance, some of the images that are on the Getty Images' site are also on our site.  Some of our images are on the PictureQuest and Alamy sites, and some artists may contribute the same images to iStockPhoto, Shutterstock, Alamy, and/or Flickr.  However, even with a 10% deduction for overlap, the number of images available on these and most other subjects is overwhelming.  How can any potential user of images carefull review and consider more than 3,000,000 people images?  How would someone who was looking for a man shaking hands or a good shot of Paris, wade through 8,000 manly handshakes and 800,000 bistros and Eiffel Towers, without falling asleep!

I've only included seven sites on my list.  There are hundreds of other good collections.  For instance, our good friends at Design Pics in Canada, have 13,430 great people images.  Our U.S. based contributors at VStock have 2,955 brand new people shots.  Our industry probably has created more than 5,000,000 people images--and maybe has 10,000,000.

Notice also that even subjects as mundane as "toothpick," return more than 3,000 images.  Exotic subjects are also heavily covered.  The "puffin" is a cute seabird that lives in Iceland.  There are more than 6,000 images of this odd bird, just on these seven sites.  I doubt I could find any concept, race, place, animal, or thing for which there are not now at least 1,000 images available, commercially.

Alamy announced that it added more than 100,000 images in the past quarter.  Shutterstock has gone from a few thousand images to almost 1,000,000 in two years.  Major consumer photo-sharing sites such as Snapfish, dotPhoto (recently renamed Exclaim!), and Webshots, are adding hundreds of thousands of images to their sites, every day.  A search for "people" on Google Images returns 4,560,000 of them.

In my humble opinion, I feel the above is proof that we have saturated the commercial image market.  Is this a good thing or a bad one?  I found a nice article on Sticky-Marketing.net that I think describes the potential downside of saturation.  The article points out:

1. Once a market reaches saturation, customers stop buying new images and are only trying to replace ones that have gotten old or overused.  This leads to a drop in volume.
2. Competition heats up, as providers realize there are relatively few new potential buyers to serve.
3. Some sellers will try to convince customers that the products offered by other suppliers are obsolete or poor quality.  There creates a shift from selling the positives of one's own product, to pointing out the negatives of the products from competitors.

Saying the market is saturated is not the same thing as saying images are a commodity.  There are still huge differences between the quality of the images on each site and the accuracy of the keywording that produces these searche results.   However, saturation can lead to commodity-type behavior, quite quickly.  At present, I think many customers can tell the difference between what they get from a site like ours, and what they get from searching on a site that does not have solid editing and controls over how images are "tagged."  However, those differences can be eroded over time by technology that ranking systems that push up the better images, and software that automatically improves or adjusts keywording.

I see no simple solution or magic strategy, for escaping from these issues.  Index Stock will try to post new fresh images on its sites, so we can capture our share of the "replacement" market.  We will continue to look for (and probably find) new customers and new market segments.  And, we will refrain from focusing on the negatives of competing products and focus on our own positive aspects.  Unfortunately, I suspect that other players in the image licensing market will find it hard to do the same.

Industry Comment #22--Seasonality

Several artists have asked me to comment on seasonality in the stock industry.  They have asked if there is there a regular pattern of sales increases and decreases, over the course of a year?  How extreme are the differences, and has there been any change in the pattern, over the past few years?  Does the revenue we get from foreign agents have a different pattern?

I think I have a good resource to use, to answer these questions, in the 14 1/2 years of revenue information I have for my company, Index Stock Imagery.  I can't claim that we are representative of the entire industry.  But, our data is consitently recorded, and shows some interesting features that make sense to me.

I looked separately at our domestic revenue and our foreign revenue.  I ignored revenue from our electronic distribution effort, despite its rapid growth and increasing importance to our overall income.   I believe few other agencies in our industry have comparable amounts of this type of business.  I divided our domestic revenue into three five year periods:  1992 through 1996, 1997 through 2001, and 2002 through 2006.  (I only had 2006 data through June, but I felt this would not make too much difference.)

I was interested to see if there were differences in seasonality between these periods.  It had been my impression that there was a shift between the early 1990s (when we and most other agencies were doing most of our domestic licensing over the phone), the late 90s and early 00s (when we shifted primarily to on-line marketing), and the past few years (when everyone else went on line).  As you can see, there do seem to be some major differences between these eras.

First, let me comment on the overall pattern. Note that there seems to be a lot of differences between various months.  One twelfth of a year is 8.3%.  As you can see, the actual range of average monthly revenues is between a low of about 6% and a high of about 10%.  It appears to be "normal" for our monthly revenues to vary as much as 60% up or down.  The average standard deviation within the above figures is about 1.5%.  That means that there is a 5% chance that a month could have 3% above or below its "normal" its normal share of our total annual revenue.  In fact, within my data there are months where in one month we captured almost 14% of a year's revenue and others where we booked as little as 4%.

Now, look at the changes that have occurred, between the three time periods.  It appears to me that there has been a big rise in revenue early in the year--in January through March.  There has been an offsetting decline in October and December.  I can offer some possible explanations for these changes--although I am not certain that I am right:

1. Christmas buying has shifted earlier and spread out.  We used to have a rush of orders in October, from customers who needed images for holiday advertising and product launches.  It looks like our customers have shifted some of this activity to earlier in the year--perhaps as a result of an increase in overseas manufacturing of products that makes ad campaign lead times, longer?
2. More licensing may be tied to an annual budget cycle.  Our customers have increased the percentage of images they license as "royalty free."  We notice many seem to buy a chunk of their RF images early in the year, when they get their "new" art budget.  They then reuse these images as the year goes on, rather than licensing new ones.
3. Our clients take more vacation than they used to.  It seems that the art and design world tolerates vacations and days off, better than it used to.  Major holidays have become very quiet--even on our Web sites.  Months that have a heavy holiday burden (e.g., December and November), lose a lot of selling days.

I felt it might be helpful to contrast our domestic seasonality with our foreign seasonality.  Of course, there are some different factors at work, that we need to adjust for.  One thing that may be unique to Index, is that some of our agents still report their revenue quarterly.  This was the style many years ago, when we received reports in the mail.  Quarterly foreign reports tend to pump up the first month in each calendar quarter (January, April, July, and October).

Another thing to remember is that foreign agents report license AFTER they collect the money that is due to them.  So, a report we receive in July may be for a license that was made in January and collected in June.  I estimate that this timing effect shifts seasonality as we see it, to between two and four months later, than what our agents experience.

Finally, a number of agents are forced by their local tax laws to file special forms each year that allow them to avoid paying a withholding tax on their remittances to us.  These forms wend their way through the local tax beauracracy, and eventually get cleared.  Our agents then send us all of the reports they have held until that point.

I think I see this last event, in the pattern I show below.  There may also be evidence of a summer vacation dip, especially from our European agents.  Otherwise, there is no strong apparent correlation between the two seasonality patterns.

I believe artists, distributors, and even investors in the stock photo industry, should not read too much into any short term variations in licensing revenue.  Our industry has a lot of monthly revenue volatility, and a big one-time change in any direction, may not be the sign of a sustainable trend.  It seems that there is a general shift towards a pattern of bigger first quarters and smaller fourth quarters.  And, it seems to be a good thing for agencies to have two (or more) different sources of revenue (such as domestic, foreign and electronic), since the changes in these sources do not seem highly correlated.

Searching for Truth #10--Organic Search Traffic

When I want clear explanations of technical stuff, I often turn to Wikipedia.  It defines Organic Search as: "a process by which World Wide Web users find web sites having unpaid search engine listings, as opposed to using the pay per click advertisement listings displayed among the search results."  When you go to a search engine such as Google or Yahoo! and perform a search, you will see the "organic" results surrounded by "paid" results.  Many companies are spending huge amounts, to put their message into these paid ad locations.  Most (including the company I work for, Index Stock) are also spending time and effort to get a top ranking in the organic results.

Thanks to this hard work and the good "content" we offer, Index Stock's various Web sites get hundreds of thousands of "organic search" visits, each month.   Rather than offering my ideas on how to tune a site to get more of these visits (a process known as Search Engine Optimization or SEO), I thought I'd tell you a little about the search phrases that seem to bring people to us.   To do this, I looked at what keywords led visitors to our core www.indexstock.com site, during the first half of 2006.

Our visitors came via more than 10,000 different search terms, during this period.  (There are also thousands of non-search sites that link to us and send us traffic--a part of the traffic-building story that I may talk about on another occasion.)  I decided to study only the top 150 organic search terms, since these accounted for more than 80% of all of our search engine-originated traffic.

The most common search terms were also the easiest to guess.  About 40% of our search visitors had entered a phrase such as "stock photography," "stock photos," "stock images," "royalty free photos," or "free photos."  The first three of these alone accounted for about 30% of all search-origin visits.  I counted 40 generic terms for stock photography, in the top 150.  Some of the less frequent ones were things like "stock de fotos" (we probably should provide foreign-language descriptions of our site, to make it easier for foreign searchers to find us), "stock photo search" and "photo subscription."

The next most common terms related to our name.  Yes, it seems about 35% of the folks who came to us via major search engines knew (or thought they knew) our name, but not the URL of our Web site.  A few (about a third of these visitors) got our name right (we respond to either "Index Stock" or "Index Stock Imagery").  The rest tried a number of creative alternatives such as: "Index Images," "Index Photos," "Image Index," Indexstock Imagery," and "Index Stock.com."  Given the trouble I've had my whole life with my own name (which seems hard for just about everyone I meet to understand, pronounce, and spell!) I wonder if we should change our name to something even simpler (along the same lines, several people have suggested that I give up and just change my name to "Bob").  We may also need to embed name variants in our pages, to make it easier for the search engines to connect our page with what our spelling-challenged and memory-inhibited visitors are looking for.

Third on the list at about 10% of our organic traffic, are people who are looking for a specific artist.  I was pleased to see that more than 60 of our artists were included the top 150 search terms.  This suggests to me that our customers are interested in the individuals whose work is the foundation of our success.  We seem to be building a pleasant synergy with our artists, that combines our marketing power with their personal fame and reputation.  The special portfolio page we build for each artist (http://www.indexstock.com/content/artists/artists.asp) and an advanced search that makes it easy to find each artist's images, contribute to this traffic.

About 0.3% of our visitors got to us by asking what sites are similar to those of one of our major competitors.  I like that, because it says that at least some people out there want to see fresh images and new choices.  We subscribe to the view that is unethical to use our competitors' names on our site.  Otherwise, we could probably spoof and spam a lot more of their visitors, to come to us.

Only a tiny sliver of visitors were looking for what I expected to see--specific topics.  While there was one off-color cluster of searches ("arab gay photos") and a few mundane pro photographer-related items ("photo model" and "photo release"), most highly specific search term items are buried far down in our search stream.  That may change as we continue to expose more of the meta data in our images to search engines.

Industry Comment #21--The Role of Industry Associations

The commercial photography industry is suppoted by a number of Industry associations.  For instance, the U.S. stock photography industry, is served by the Picture Archive Council of America (PACA).  This long-lived (started I think in the 1980s) and well-respected organization has more than 100 members, including almost all of the major stock agencies that operate in the U.S.  One of the first things I did upon entering this business (in 1991) was to join PACA.  Over the years, I and other members of our Index Stock staff have volunteered for roles that included President of the organization (from 1999 through 2001), the head of various committees, and stuffing envelopes.

We have also supported the European equivalent to PACA, the Coordination of European Picture Agencies (CEPIC), the American Society of Picture Professionals (ASPP), and the American Society of Media Photographers (ASMP).  We are a member of the an association that is trying to set standards for reporting licenses, Picture Licensing Universal System (PLUS), and support other more general industry standards such as the Joint Picture Experts Group (JPEG) and the World Wide Web Consortium's (W3C) Cascading Style Sheet (CSS).  We are a Microsoft Certified Partner and conform to both the International Press Telecommunications Council (IPTC) and Adobe's Extensible Media Platform (XMP).

As you can imagine, it is hard work keeping track of all of these organizations (and remembering which letters go with what group!).  The promise of joining and supporting a trade group, is that its activities will add value to our mission (making money for our artists).  While we have had some benefits from our memberships, there are several areas that seem to me, to have been neglected.

I doubt that many (any?) of the folks in these organizations read my blog.  So, I am unlikely to effect much change, through these ideas.  However, here are a few things I'd like SOMEBODY to take on, to help independent stock agencies, like ours:

1.  Web advertising standards.  Many of the companies in our industry are buying pay per click ads.  We are also buying banners, running affiliate programs, and generally taking advantage of the power of Internet advertising to drive traffic to our sites.  A number of my peers have complained publicly about having their brands and product names hijacked by one or more competitors.  (For instance, someone could buy the keyword "Index Stock" and then put his or her ad at the top of search results page.  Try this search on Google, and you may see as I did, one of our competitors--and distribution partners--Inmagine, at the top of the page!)  Why not promulgate some standards of decency and restraint?  It would benefit us all, and prevent confusing our customers.  By the way, this should include conforming to standards such as those set by the Email Sender and Provider Coalition (ESPC) and the Can-Spam Act of 2003.

2.  "Small model" standards.  We distribute our images into consumer markets, such as those for postcard printing, cell phone wallpapers, and various kinds of personal web use.  The fees in these "small model" markets can be quite low on a per image basis (e.g., as little as a penny per use), but turn out to be good when you factor in the size of image used, duration of use, and type of use.  It woudl be great for our industry if there was a recommended set of small use market terms.  Instead, each time we talk to a potential distributor, we have to negotiate from scratch about things like copyright notice and retention, percentage split on fees, reporting requirements, etc.  Other media-related industries such as music and television have done a much better job of making it easy to license bits and pieces of their stuff, without a lot of hassle.

3.  Create a safety net.  Over the past fifteen years, I have seen several photo agencies go out of business.  It doesn't happen often, but when it does, it can leave the artists who were part of the agency in a real mess.  Instead of hoping that some altruistic third party will step in to collect outstanding payments, sort and return images, and clean things up, our industry should establish a "rainy day fund," that would pay for helping failed agencies wind up smoothly.  This fund would only be tapped once in a while, but its presence would reduce the perceived risk of working with any agency.

4.  An infringement clearinghouse.  If we find that someone has misused our images, we vigorously pursue them, and get the fees our artists deserve.  But, there is no easy way for us to notify the rest of the industry about the problem.  The software industry set up an excellent example in the Business Software Alliance (BSA).  This organization pursues infringements on behalf of all of BSA members at once.  Why can't we do the same?

5. Training and certification.  The financial industry uses the Series 7 exam to make sure its brokers know the rules and the Chartered Financial Analyst (CFA) designation to improve the quality of its financial research.  Automobile companies certify mechanics; airlines certify their pilots.  Why can't our industry train and certify its editors, retouchers, stylists, and salespeople?  Artists get a type of certification, by joining a major stock agency or those artist groups that require a portfolio review, before they accept a new member.  But, wouldn't it be good to have more independently vetted and widely recognized standards--especially for specialized areas like table-top work, sports photography, or wedding photography?

Our industry's organizations probably feel they have enough problems already--enough different projects, needs, and ideas--and sadly limited resources to deal with them.  However, the members of these organizations might contribute more, if they got more in return.  I believe that the things I have suggested would not interfere with competition or stifle creativity and change.  Instead, they would improve the quality of the services we provide and reduce the risk from working together for both providers of images, distributiors of images, and users of images.  Higher quality and lower risk shoudl mean more profit and stability for everyone--a goal that I hope all of the organizations I have mentioned, would support. 

Analysis #33--Our Artist Preference Program

At the start of 2004, we decided to try a new way of recruiting images from our artists.  We called it the Artist Preference Program.  We offered it to those artists who had been submitting regularly to our stock photo agency (Index Stock).  99 artists signed up.

Each participating artist was allowed to submit up to 20 images for the Program.  Normally, our editors review each new image we get, and reject those they don't like.  Because our editors are either picky or have good taste (depending on your viewpoint!) they reject about 90% of the images we receive.  The other 10% go into our collection.

The images submitted under the Artist Preference Program got a special pass.  In theory, we accepted all of them into our collection.  (I say in theory, because we still required either a decent quality analog original or a good quality scan, insisted on model and property releases, and made sure that nothing indecent or infringing slipped through into our file.)  We knew that other agents had similar programs, and that they charged their artists a per image fee for participating in those programs.  We decided we would make our program free--and cover any scanning and keywording costs, ourselves.

As I mentioned, a fair selection of our 1,600 artists participated in the program and we eventually received about 1,800 images.  (You can see the full set of images, here.)  Eighteen months later, these images have been distributed to our agents in 70 countries and thoroughly picked through and examined by the hundreds of thousands of people who visit our sites and look at our images.  I felt it was time to take a look and see how these images had performed.

The chart below compares the per image earnings (per year) for the Artist Preference Program images, compared to a set of 4,733 rights managed images that were contributed separately during that time by 247 of our other artists.  Because this set went through our normal editing process, they should be enhanced by all of the wisdom and learning of our editing team.  I am sure that team will be relieved to see that their babies produced more revenue per year on average, than those images selected by our artists!

I also found it interesting (in fact, pretty amazing!) that more than 13% of both groups of images were licensed, during this period.  This is much better than most of the averages I have heard elsewhere in the industry (1% of all images licensed, 5%?).  I believe it is due to a combination of our artists creating great images and our sales and marketing team doing a good job of distributing them thoroughly and energetically to prospective licensors.

During this same period, we accepted about 9,000 images from ten large royalty free production houses.  While these images went through our editing process, we were not as critical as we would be with rights managed images.  We assumed these production houses had already done a good job of weeding out poor quality images, and they had already scanned, captioned, and keyworded the images for us.  It is interesting to see that the average earnings on these images was well below both those for our carefully selected rights managed images and for those images contributed through the Artist Preference Program.

Certain categories of images did better under the Program than others.  Below are the top five categories, in terms of earnings per image per year.  Note besides the presence of "Concepts," that this is a different ranking than for our collection overall.  I suspect that many of our artists have special knowledge of an area that we do not--and were able to give us images that filled holes in our file that we did not know we had!

Industry

Concept

Nature & Scenic

Botany

Colorado

Our industry may be moving towards what a recent Wired article described as "crowd sourcing."  However, I would not take the relatively small percentage difference in returns described above, as proof that this approach is a good approach.  I think our Artist Preference Program did well for a few special reasons:

1.  We offered it to the most active artists in our file.  These individuals have had frequent contact with our editors and recent feedback on their submissions.  Via this input, we have educated them about our marketplace and its needs.
2.  We limited how many images each artist could submit.  By forcing artists to winnow down their set of images, we encouraged them to remove duplicates and think about each selection.
3.  We did a good job of scanning, cleaning, keywording, and managing the rights issues of these images.  These images got the makeup and prep work needed, to turn them into stars.  That kind of attention is still lacking in most of the crowd-type image supply sites.

We are thinking about doing this Program again--and perhaps making it an ongoing process.  I would be interested to hear any suggestions about how to improve these types of artist-driven programs.

Image Idea #18--Extended Families

Next time you attend a family dinner, picnic, church social, or wedding, look closely at the people who are present.  I suspect you will see a broader range of ethnicities, ages, and social relationships than you might initially imagine.  You will see traditional parent-grandparent-child combinations, brother and sisters, and a variety of cousins.  But, you will also see a number of modern innovations and extensions to the concept of "family," that are not well documented or well-represented in stock libraries such as ours.

For instance, it is increasingly common for people to remain friends with their ex-spouse and/or his or her family, following a divorce.  That may mean that the "father" who is giving away the bride could be the legal one, the original one, or the current one (if you know what I mean).  Some people are closer to their ex-in-laws than they are to the blood relative who used to be the connection.  Children seem to circulate freely, among their many step fathers, step mothers, step uncles and step aunts.  Children are also sometimes cared for by half brothers or half sisters.  If the adults in the family have changed partners enough times, it is possible for young people to consider themselves "brother" or "sister" to someone with whom they have no blood relationship, at all.

We seem to be recruiting other types of unrelated people into our extended families.  For instance, I have one friend who has had the same home helper for more than eight years.  Her children consider the woman to be a member of the family.  Why not?  She has been there for them, as long as they can remember.  There is no clear name for her relationship to her family.  She is not a maid, a nanny, or despite the sensationalism around polygamy (as in HBO's "Big Love") a "junior wife."  Most modern families with children, have integrated a variety of supporting adults into their lives.  These can include coaches, teachers, neighbors, and distant relatives.  One would hope and expect these children will return the love and protection they have received, as their "babysitter" ages.

Some older people, who have no one to care for them, hire full time or part time care-giving companions.  These people often develop a relationship that is similar to those the older person had with his or her children.  I have read of several cases where the older person preferred the companion to his or her children--and left his or her estate to the companion.  I believe we will see more and more situations like this, as our fertility drops, our population ages, and the number of seniors who have no children to care for them grows.

Adoption has changed many families.  Overseas adoption scrambles both the look of the holiday table and the genes of the next generation.

One final member of the extended family...pets!  Many people treat their pets as family members.  When my sister goes on a trip, she calls her husband and asks him to hold the phone out so she can "talk to the dogs."  Look at the explosion in clothing, toys, spa treatments and even vacations for pets.

Part of the problem may be a naming issue.  Is the half brother of your half brother (someone you have no genetic relationship with) your "quarter brother" or your "non-brother brother?"  Is the man who cleans your grandfather's house, cooks his meals, and read books to him a "surrogate son," a "nurse," or a "personal assistant?"  None of these terms indicate that the kindness, understanding, and intimacy, of these relationships is more than mere "friendship."

If you have followed some of the links that I sprinkled through this post, you will see that we do not have enough images of this trend in our file.  It has taken stock agencies years to catch up the changes introduced to our society by internationalization, alternate lifestyles and multi-ethnicity.  Those who started working in these areas early, eventually saw huge demand for their work from advertisers and publishers, when they eventually woke up to these trends.

I'd love to see our artists at the forefront of the effort to document and describe the extended family.  As you work with your models, ask them about their families.  Look for relationships that go beyond the traditional.  You will find that many are among the most rewarding and important relationships, in  the lives of your subjects.  If you can capture these human connections with the cold glass your lens, please document them carefully and sensitively in the captions your provide us.  The words may look clumsy, when you write them down, but advertisers and publishers must eventually realize that most of us have an extended family.  They will find out that we care about these family members and that we recommend products to them, buy them things, and think of them when we make plans.  When this news sinks in, there will be a rush to understand the dynamics of these relationships and the influences they bring to buying, lifestyle, and modern thought.

Analysis #32--What Illustration Categories Do Best?

After figuring out that illustrations generate more revenue per image than photographs (see my previous post for details), I decided to examine which illustration categories do best.  From a previous study of Index Stock's 2400 categories and subcategories, I had spotted certain hot spots.  I expected sales by category for illustrations to closely follow the pattern of our overall library.

I was surprised to see some major differences.  (Please note that my review uses only the 11,000 illustrations in our library.  This is a relatively small set of images to study, and this collection does not have the coverage of subjects that our 1,000,000 image general library has.)  In particular, people illustrations didn't do nearly as well as people images in general and concept illustrations were quite low.  Here is a comparison of the ranking of all categories for illustrations and our overall collection.  (I've linked the top fifteen to the relevant images, for your viewing pleasure!)

 

                                                                                                                                                                                                                                                                                                                       

Illustration   Rank	Category	Overall Rank
1	Public Service	41
2	Garden	3
3	Couple	43
4	Holiday	61
5	Land Transportation	10
6	Foreign Travel	27
7	Bird	44
8	Environment	59
9	Americana	2
10	Occupation	48
11	Marine Transportation	35
12	Vacation	18
13	Concept	51
14	Business	33
15	Astronomy	62
16	Cat	13
17	Medical Science	36
18	Teenager	19
19	Aviation	21
20	Art	40
21	Zoology	52
22	Social Issue	15
23	Communication	28
24	Education	37
25	Botany	56
26	Flower	39
27	Woman	14
28	People	17
29	Nature &   Scenic	32
30	Miscellaneous	24
31	Shopping	12
32	Food	31
33	Road	6
34	Meteorology	11
35	Child Both	38
36	Industry	60
37	Military	22
38	Abstract	64
39	Baby	49
40	Sport &   Leisure	42
41	Historical	4
42	Religion	58
43	Entertainment	47
44	Child Girl	45
45	Family	53
46	Man	23
47	Fall	54
48	Wedding	50
49	Mature Adult	57
50	Snow Scene	5
51	Architecture	55

Some categories didn't generate any illustration licenses at all, during the period I studied.  They included some fairly popular categories in the overall collection, such as "Crowd," "Farm Animal," "Dog," "Native American," and "Toy & Hobby."  These should probably be target areas for those creating new illustrations.

When I dug down into the subcategory level, I saw a few particularly interesting areas:

Historical women.  We have some great old poster-style images, that are doing well.

Business people, outside office.  Does five times better than business people, inside the office.  Some of the classification on the latter category is suspect--could be part of the reason?

Holiday, fourth of July.  Patriotism always sells well in the U.S.  The Statue of Liberty is another popular illustration topic, but we only have one image to promote.

Nature & Scenic, desert.  Hard to convey the dry landscape of a desert, with a photo.  An illustration can put back in the contrast and colors that the eye sees, and the lens misses.

I've mentioned before that royalty free tends to undercut image pricing in the areas it has penetrated.  There is a concentration of royalty free illustrations in the popular people and concept categories.  This may be why the revenue of these categories is lower than expected.

If you are an illustrator, my information should encourage you.  There are good opportunities to license your work via the rights managed market--or via royalty-free, if that is your direction.  Go for simple images, with a central object or theme that is easily described.  Use lots of color and take advantage of the power of illustration, to exaggerate the subject a bit.  The result is likely to be a high-earning image and the envy of the mere photographers, who share space with you on sites such as ours.