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Val Gelineau outlines business plan for stock photographers
Val Gelineau, co-founder of the stock image subscription service PhotoSpin, offered advice last week to photographers in these ever changing and ever challenging times. Upon further contemplation of the issues, Val offers more concrete advice and an intriguing business plan for photographers:
After giving the question "With all due respect, tell us something we don’t know?" some more thought, I wanted to lay additional groundwork for not only surviving rough economic times, but excelling in this new changing market as well. I offer this with one condition: Don’t kill the messenger!
In rough economic times all businesses look to reduce overhead by cutting costs. This is a known fact that has stood the test of time. That said, photographers today need to readdress the whole business of photography and look to the clients that specifically hire them on an ongoing basis: automakers, catalogs, fashions, soft drinks, etc., the products that are made year in and year out. They should also be on the lookout for clients that have new models of products that need to be marketed to the consumer. These clients need a specific product shot for the ad and no stock photo will do. For instance, a new Ipod, a new 2009 car, new fashion, etc.... you get the picture.
The current state of photography today is that more and more people are buying stock / royalty free images and this isn’t going to change. Stock images have become a greater part of advertising than ever before. More and more photographers are contributing to the pool of royalty free images available today, thus, the prices are being driven down by a glut of good images on the market. "Why pay $500.00 for an image when I can buy one for a few dollars?" This has become the mindset of most image buyers. The image history itself isn’t that important for the majority of the projects being done so why pay for it?
So, this sets the table for what I’m about to say. I offer the following based upon my understanding of business now. My past mistakes while running businesses has led me to these conclusions. Remember: Don’t kill the messenger! I do invite disagreement / criticism but not death threats. I believe this is a good model and would look to implement it if I were still a commercial photographer.
Professional photographers need to consolidate their businesses!
Photographers today need to put their egos aside and look to the future. They need to create a consortium of talented professionals, quit being individuals and begin to build businesses apart from themselves. Thus, they need to operate their businesses as businesses. There, I said it. The biggest mistake I made when I was a photographer was I WAS the business. When I quit shooting, I was able to sell a studio and some equipment but NOT the business! Twenty years of good will down the drain. I know of an owner at a local donut shop that just got $250,000 for his rented location, equipment, and GOOD WILL. He sold his BUSINESS.
So, the next question: How is this done?
I would look to large law firms or major advertising agencies as the model.
As a hypothetical, take 100 photographers from around the country all working and billing a minimum of $100,000.00 per year - not much as an individual especially when you factor in expenses-form a consortium and incorporate it. Offer each photographer a base salary and a commission based upon performance, hours worked and dollars brought into the company. The corporation is now billing $10,000,000.00 per year. Now, that’s buying power. The photographers become employees of the corporation receiving such benefits as vacations, options, healthcare etc. If a photographer doesn’t pull his or her weight they can be fired, just like in any other organization.
This hypothetical business now is in a position to get bank loans and lines of credit as well as have a studio in every major advertising city- New York, San Francisco, Los Angeles, Dallas, Chicago, Miami, Seattle and Minneapolis ( you pick the cities) - available to all within the firm. No individual photographer is working 24hrs per day so why pay for the overhead as an individual 24hrs per day?
If you take 1% of $10,000,000 or $100,000 per year and spend it on advertising just think of the impact that you could have in the industry. Agencies would like the buzz, art buyers would get one stop shopping and clients would recognize this hypothetical business by name. Why? Because it would be branded as the best, biggest, most complete studio in the world. The company would be able to hire accountants and bookkeepers to do all the billing from one location instead of the hundreds of accountants that you have now. It also would be able to bring in producers, stylists, reps, and assistants that can work within the company and be pulled into a shoot when needed. As the assistants gain experience, they can be groomed as photographers and become associates, much like associate attorneys in a law firm. The company would also be able to control stock shoots and be their own stock agency. The opportunities are endless. Most important, when you are ready to retire you have equity in the company and you can sell this equity back to the partners or to a new photographer coming into the firm.
Congratulations, you’ve built a company that is bigger than you, the individual photographer! You’re a professional that deserves professional fees and respect.
This is a very rough overview, but it is doable and can be highly profitable. It can be accomplished with as few as 10 photographers in a single city to a few hundred in multiple cities. Again, look at law firms or major ad agencies working under one corporation in multiple cities. To accomplish this it will take a committed group willing to break the mould of what has been and build for what can be. Do you want to survive in rough economic times? More importantly, do you want to change an industry? Here is the road map.
Web-site: PhotoSpin.com
Posted in: Editorials, Features, Photographers
Comments(6)
post a comment »Ambrose, May 01, 2008 [#]
Brilliant! You just discovered the cooperative agency business model, which we all know doesn’t work. Look at Magnum. If this is all you can offer in addition to PR spin for the royalty free photography market, I can understand why you never found success as a commercial photographer.
val Gelineau, May 01, 2008 [#]
I’m not saying the idea is new, But it is time to rethink how photographers approach business. Remember the Wright Brothers were not the first to build a plane. By careful study, the Wrights identified the best features of past aircraft and built a successful model. I believe the same is true for a photography business.
anonymous AD and photographer, May 02, 2008 [#]
Prices don’t get driven down by more photographers contributing to the pool of RF images. Prices get driven down by the major agencies (Getty, Corbis, Jupiter) tampering with pricing and then essentially only accepting new images into their RF collections (not into their RM collections where the big licenses occur). Photographers can either go along with this or they can be a part of the new consortiums on the market that do essentially the same thing (Blend, Ojo Images, et. al.), who try to widen the exposure by placing themselves as 3rd party collections within these major brands. But this can really only benefit them if the sort benefits them (i.e. Getty won’t give priority placement to 3rd parties). Two things need to happen to shake the industry back to where it should be (which is to a place where fair and reasonable licenses are paid for quality images): 1. Photographers need to stop shooting RF images. It’s not an easy thing to quickly turn-off, but unless you want to continue to see your RF images sell for less than a buck (this is happening at Getty) then you better get with the program. 2. Talk to your venture capitalist friends and encourage them to consider some “disruptive business” in the form of a high quality RM business. This is disruptive because no one is really doing it anymore at a level or a rate that can both deliver to clients and benefit photographers who want to invest again in high quality pictures. The industry, at the current rate, will see a considerable fall-off in image quality because A. photographers are reluctant to invest into their self-funded shoots because there’s no hope for return on investment when their images are sold as RF licenses; and B. The big companies’ art directed wholly owned shoots are nowhere near as strong as what creative photographers were once able to produce on their own. The latter can be explained by most of the good ADs leaving the business, and by low day-rates being paid to photographers with no other motivation to do good work...AND with generally poor shoot budgets being spent by the agencies. Sorry, running-on more than I meant to.
val Gelineau, May 05, 2008 [#]
Typically I do not respond to anonymous postings. I believe those that post anonymously are willing offer their thoughts but not will to follow their own advise. The “Do as I say not as I do mindset”. However your thoughts are valid but I believed they are flawed in your conclusions. So here is my response:
I cannot speak for Getty, Corbis, Jupiter or others because I am not part of their companies nor am I privy to their internal businesses. All successful businesses look for the greatest return for the dollars invested the stock photography industry is no different.
However I can address the surplus of images and flow of images into the market as well as a disruptive business model concept.
In the last decade we have seen most commercial shoots go from film to digital, The rise in digital images has lowered the barriers for entry so more photographers both professional and armatures have been able to enter the market.
Stock agencies have gone from a representing a few thousand images to over 10 million images. This quantity of good images along with companies like mine have given rise to the growth in the RF industry, but it is customers or end users that are dictating the price. Images are no longer being sold exclusively to high end advertising agencies or design studios. With the explosion of desktop publishing the number of image users has increased 10X in the last decade. Image consumers are buying the images they need at the price that will yield them the most profit.
Your point about photographers not submitting –That’s not going to happen, that was the same cry heard when RF first came into the market back in the 90’s. I do not see photographers in the future not submitting to a proven revenue model even if the price continues to fall.
Regarding venture capitalist investing in a disruptive business:
To my knowledge no VC would invest in a disruptive business model for the stock photography industry. Why, VC’s look for a big return on investment. A non-proven disruptive model would not give them a large enough return if any. Especially going up against the big three (Getty, Corbis and Jupiter )That’s why it hasn’t been done. VC’s will invest in New Technology, or established business looking to go to the next level, the model you propose in my opinion will not get funded. It’s that old saying all over again “when you need money there is none to be found when you do not need money companies are coming at you with buckets full”. I believe for this to work it needs to be grassroots effort. A consortium of talent as I stated before, needs to come together and build it first then go after money to fund it.
If you would like and believe in this model, create an ad for your company; post it to the free new MySpin directory at http://www.photospin.com/directory.asp
Post some images that are unique to you and let the customers know they are available for sale, give them your number to negotiate the fee. This is a new community that PhotoSpin is in the process of building. It is small, but as the community grows so will our efforts to market it. Our goal is to bring together creative professionals working together giving them a platform to launch new businesses, market services geared to creative professionals. If the images posted are lewd or obscene we reserve the right to not post.
anonymous AD and photographer, May 05, 2008 [#]
Val,
Please try to appreciate that I write anonymously because I’m very active with the major collections and prefer not to interfere with my business with them; NOT because I don’t practice what I preach. My major point was about the decline in RF return on investment and I do not submit (any longer) to this pricing/business model. The photographers I continue to work with and consult for hear the same opinions that I’m posting here.
I agree that Getty, Corbis and Jupiter do indeed look to increase revenue and make decisions to that end. But one major difference between them (except for Corbis) is that they are publicly traded companies (well, Getty is now finished with this too) and have had a responsibility to their shareholders and have had to make bold moves in hopes to increase the share price. Unfortunately these bold moves (dropping the price of RF images and paying over a hundred million dollars for a microstock collection) did nothing to improve the stock price. In fact they’re as low as ever. But these moves did everything to alter stock pricing for the foreseeable future.
I don’t dispute the growth of the RF market and it’s popularity among clients worldwide. It’s a legitimate business model and definitely has footing. I’m critical of the RF business for higher production value photographers who are very capable of shooting advertising quality images and very capable of licensing their images for exclusive usages. The latter also continues to be a viable business model. Contrary to your point, all major ad agencies continue to buy exclusive rights to images for rights control and exclusivity. This may be happening less and less, but clients absolutely need and continue to license for high-end usages. I don’t know where you get your information about this point, especially if you’re not involved with the big three (Getty, Corbis, Jupiter).
Yes, cheaper technology and more opportunities to enter the market has given more photographers the ability to put their images out there for sale. These younger photographers should indeed be the ones that are conquering the RF and microstock markets. But this kind of entry only reinforces that we’ll likely see a drop in image quality. Assignment-level photographers will not continue to invest their own money in RF shoots because of the weak return on investment. This level of photographer won’t continue to do wholly-owned commissions for RF agencies either because day rates and shoot budgets are dropping too. So the door is open for these younger photographers to fill the gap. I’m not saying these are inferior photographers, but the production expenses will be different (I doubt these photographers will pay $1000 for a model or $1500+ for a location) and the general production level will drop. Maybe some or even most clients don’t require higher production levels; this may be true. But some clients do indeed desire legitimate production level stock (pricier models, locations and make-up artists and wardrobe stylists, etc. etc.) and will absolutely pay well for these types of images, and THIS is precisely the market I’m talking about. This is precisely the niche in the market that needs to be explored because there are many many photographers that can perform here.
And, as for a disruptive business to support this, I don’t think it’s anything that we can clearly comprehend, at this point. It won’t be something traditional. Those days are indeed over. But there is certainly room to brainstorm and to present high quality relevant images in a scalable business model. How they’d be sold or licensed or searched, etc. is up in the air. Photographer consortiums are fine to keep some business afloat, but they really can’t be scaled to a level that will impress visionary venture capitalists. The idea needs to be a bold one.
My point about “photographers not submitting” was more of an appeal to reconsider this. It’s not for all photographers because clearly the model works for many. The comment was more meant for those who are tired of investing in quality pictures that are sold for VERY low prices….so low that it’s impossible to see a return. This appeal is mainly for the professional Getty Images photographers who spend thousands of dollars on shoots only to see them added to one of the Getty RF brands. Photographers know what sells and what’s licensed for RM or RR uses. They know how to refresh a subject. They know how to be creative with new images. But they’re told, after they submit, that their images are being directed only to an RF collection. This is frustrating to photographers who know better than the company that’s editing their work. They need an alternative.
val Gelineau, May 06, 2008 [#]
Overall I couldn’t agree with you more. The only disagreement I have is the consortiums idea. We agree that high-end stock images get sold and some clients need an image history or want and need access to unique images and thus should and will pay higher prices. We also agree, that high-end production companies producing stock are producing images every bit as good as the images produced for assignment advertising today. That is precisely why you should not only be shooting stock but advertising as well. In one of my earlier posts I stated that commercial photographers need multiple revenue streams to survive in today’s economy.
As you speak with disgruntled photographers frustrated with the current situation in the industry, consider building a consortium. Pooling your resources, create a production company that shoots advertising and stock. You then control the distribution of your stock away from the big three. There are over 200 distributors throughout the world that would love to represent a new unique collection. You set the prices. You’ll give better customer service because it is a small hand’s on customer driven service. Create a tightly controlled collection that the end-user or customer has better access to. This is scalable and as your company grows so will the pool of talent looking to be part of your venture. It’s a viable business, built to fulfill a niche within the market. This model can attract Angel investment, once revenue and growth occur. Then you can look for a management team, once that is in place you can go after the VC. You’re welcome to call me to discuss “anonymously”.