Wal-Marting

December 9, 2010 by pmelcher.

VII to Corbis is like Magnum to OnRequest and falls into the “what where they thinking ( drinking ?)” category. But hey, who are we to judge. If they think it’s better for their business then let’s give them a cheer. Up to now VII has always been quite savvy in their business decision so let’s give them the benefit of the doubt ( we couldn’t do that with Corbis, could we ?)

But, that is not the important part of this news. What is important here is what we had wrote about a few years back. More and more, producing photo agencies, those that have a sizable roster of  producing photographers have diminished their own internal sales team in favor of agreements with mega suppliers. Earlier, we saw what is left of Gamma drop all of it’s images into the hands of  Getty images. And we could go on with other examples.

Started mostly in the RF area , extended to Commercial Stock RM collection, it is now entering the editorial. The Wal Martisation of the photo industry. Here are the reasons :

- The full  automatisation of sales is not happening, not in  RM. As much as one could take pictures for an entire life without ever talking to a customer in the RF world, the RM world still needs a lot of hands on.

- As licensing prices are dropping worldwide, maintaining a human based sales force is more costly  and less profitable.

So, what does these small to medium photo agencies do ? They engage their collection with existing large to extremely large sales platform and distributors, like Getty, Corbis or AP who already have a huge sales force . These benefit from an economy of scale that the little ones cannot afford.

Thousands upon thousands of staffers that can answer phones, negotiate, discount, read endless contracts and optimize.

It is ironic that those who are responsible for the depreciation in the value of images are actually the ones benefiting from it. The more licensing prices fall, the more the Getty’s and other will see collection coming to them for sales distribution.

Until when? Until the market will be separated in two. The creators and the distributors. Small entities of photographers regrouped in common interest units on one side and large to extra large sales platforms on the other. It’s all benefit for the sales platforms since they have no cost of production to cover in their prices. Think Istockphoto. Think Wal Mart.

So, next time you see another agency sign up for sales distribution with one of the big ones, think how much photography will become concentrated in the hands of a few that will able to set any condition they feel would benefit them. And only them.

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