August 19, 2008 by pmelcher.

  According to Sellingstock.com, the CFO of A21 just quit. Left his company. Just like that. Not surprising really when you look at A21 recent  numbers. Rising cost of operations, lowering sales, the company is heading straight for a wall, head first. Amusing part is that the only two other public or ex public companies in this business have also posted negative results for the second quarter of 2008.( Jupiter and Getty). None of them have signaled community portals( Alamy or Photoshelter) as the cause of their financial suffering . Some have accused the rising price of oil ( ya, right) and, others more bluntly, the ever shifting move from traditional commercial stock to Microstock.

Even if Getty and Jupiterimages saw Microstock coming, they both underestimated its impact tremendously. It is no longer in the original 8% of existing Getty customers that istock is eating in, but rather 25% and growing. Jupiterimages is struggling to integrate their own microstock offering into photos.com hoping to elevate the price per image. Who will be the first to shut down some of its more traditional divisions in order to save the leaking ship ?

No one knows how Corbis is doing in these hard times. Surely, their Snapvillage is not a player in the microstock field, and if the public  companies revenue are any indication, they must be hurting too. In a Bill Gates kind of way. More layoff before years end ? definitely. But not just at Corbis. expect Jupiter, A21, Getty and others to lay off some weight.

There are no clear solutions for these companies. They were build with very expensive infrastructures that do not work well with lower pricing. Although Getty’s project used to be an Internet company only, they have lost their objective and have fallen  heavy into the overhead trap. When they purchased PhotoDisc, they were going to go all speed ahead in high technology/low headcount. Apparently they got sidetracked, allowing Istock, Dreamstime, Shutterstock to continue and achieve what they only dreamed of achieving. Buying Wireimage was cute but will certainly slow down their growth considerably. They have inherited a mastodon of inefficiency, who was busier to reach high market shares rather than being profitable. Results: lots of personnel, huge operation cost, a big mess and waay too many photographers. Jonathan Klein even said himself at the last Getty shareholders meeting : Mediavast was never profitable.

Everyone knows that Getty purchased Wireimage to get rid of it, not to make it grow.

The next 3 years will see the industry giants engage in any and all enterprise that will help them cut their cost to a minimum while not engaging in significant investments. Not an easy task if they want to also grow at the same time. Certainly less of an easy task when lesser size companies are starting to move on the next step. Mostly European, these companies have grown organically using the more slower pace path of reinvesting their profit. Much more careful on their investments than the big loud 3’s, they have now reach a level of financial strength that they can now start to retaliate.

Some are acquiring, others are merging. While the corporate mend their wounds, alliance are forming  in the back alleys of the industry. Interestingly enough, most have hired ex Getty, Corbis or Jupiter staffers who have learned, from within the beast, what not to do. These agencies are extremely ambitious and battle savvy. They have all they need to succeed : knowledge, relations, expertise, endurance and cash. Most will never publicize their acquisition or mergers because they couldn’t care less about what the rest of industry knows. They have drawn a very precise path and their definition of success is  far from Wall Street . Very far.

The race is far from over : Neither Getty nor Corbis have succeeded  cornering the market. In fact, both have abandon the idea as they realized it is almost impossible. While Corbis is still figuring out how to turn a profit, Getty has spend the last 10 years acquiring companies they felt they could not compete with or create internally. Like pasting dollars bills on their obvious shortcoming.

JupiterImage is surviving only thanks to its internet properties while A21 keeps on borrowing money. Neither have a bright future, not, at least , in the photo licensing world.

A reasonable expectation is that our universe is about to see its giant stars implode. They are about to break apart because, similar to  the laws of the universe, they cannot survive under their own weight. Too much manpower, bureaucracy, equipment, replacement, fiscal obligation are making them crumble.

They ate too much.

Posted in Jupiter, technology, commercial stock, finance, corbis, Royalty free, getty, Microstock | Print | No Comments »

August 6, 2008 by pmelcher.

The photo agency industry continues to complain and whine about its condition, endlessly consummated by demons it has created.

For one, it has created this endless pool of incredibly mediocre photographer that has for far too long managed to make a living taking pictures. Its not amateur photography that is getting better, it is just pro photographer that are getting worse and lazier. The over reliance on a defunct principle that they were the only one to own the channels of photography sales made photo agencies indifferent to the quality of their product. After all, it was them or nothing. Even Getty, who once believed it could corner the “distribution of image” market and set it own rules got a nasty wake up call when Istock through the first kick and Flickr the second punch.

Today, the photo agencies have a lot of excess weight. Photographers they keep because of old friendship or by pure habit, endlessly submitting the same images in the hopes that the Golden age will soon return. While they wait, in absolute stubbornness, the majority have decided that playing with pricing will offer them a new opportunity.

Amidst unverified rumors that their competition is doing the same, prices are being slashed to levels that have never been seen and that defies even the law of gravity. Since print publications are not doing so well either, everyone is more than happy to comply, bringing the whole market to a spiraling absurd end. To top it all, Angelina’s twins selling for an allegely $14 million just adds more photographers in the pool, hoping that they will too, one day , hit the jackpot.

Take Florida based photo agency prphotos.com ( created by some wireimage ex pats), for example. Someone there with a brain the size of  sand has decided to offer red carpet images for web usage on a subscription basis. That wouldn’t be so bad if the prices were not so ridiculously low. Some of its offering is as low as  “Under A Penny Per Image”. At that stage, what is the point ? With what seems 5 people on staff, how do they intend to pay their bills?

Do they still believe the internet is the dumping ground of photography ? But more important, what does it say about how they value their photography ?

We haven’t seen the worst of it yet. There will be more of these whacked-cracked photo agencies popping up everywhere, one “smarter” than the other, offering waccadoodle prices in a desperate hope to become the new Google of photography.

Getty, now privately private will soon release a lot of weight ( read photographers) that will in turn compete not on quality but on sub pricing flooding of an already over saturated market with less than attractive images. It will not just hit editorial, but commercial stock as well, until only a few agencies survive. Already photographers have a hard time. If they associate themselves with foot-shooting agencies and their magic potion pricing, they will have to take other jobs to make ends meet.

There is no salvation in stupid pricing. It is just stupid.

Posted in celebrity, magazine, commercial stock, google, flickr, getty, editorial, finance, Microstock | Print | 1 Comment »

August 4, 2008 by pmelcher.

let them eat cake, she had said. As the eyes of the world are turning toward China and the upcoming Olympics, this is a good time to reflect on how photography is evolving. Not as a medium, but as a media.

Getty images licenses a series of exclusive images to People and Hello! for a reported $14 million. No one questions this. furthermore, no one seems to believe that the number is just plainly insane. On one side of the spectrum, images sell at a buck a piece and on the other, at double digit millions of dollars.  Doesn’t make much sense. And I will tell you why : Image pricing was a combination factor of quality/difficulty/usability. The more an image was going to be used, or seen, the more it would cost. The better, or rather, the more relevant the images were, the more its price would go up. Finally, the more an image was hard to get, the more the price would go up. If you look at the RF microstock model, none of the above is true anymore. Does the Jolie twins bring so much value that they will reep sales above $7 million ( assuming People paid half the bill ?) . lets see : Angelina first baby picture sold for $4million. People sold 2.2 million copies at a cover price of 3.95. That is roughly  $ 8.8 million if you complitely ignore the subscribers. If they raised their advertising space rate, they should have broken even. At $7 million, it becomes more of a problem. After all , it is not because she had twins that there will be double the readership, is it ?

Actually, these images have become a story by themselves. They were priced way before Angelina even had the babies. And by whom ? The media. Rumors, speculation, interviews, opinions were running  like a mountain stream in Spring, finally settling around anywhere from $11 million to $14 million.

Interesting thus, that Getty sold these images for the same price as people assume someone would sell these images. Did the  megastar couple take the hint from the crowdsourcing pricing or is it just hype ? After all, the crowd will be more eager to see images that are worth $14 million dollars than a few bucks. Thus both Getty, People and Hello ! profit from screaming that those images were sold for $14 million. It benefits everyone, even the couple who gets to give even more money to charity.

Furthermore, does anyone who has been in this industry for a while really think that competing magazine USweekly or IN TOUCH  stop bidding at 13,999,999 .00 and said we give up ? Or that if the National enquirer had bid $15 million, it would have been in their latest issue ? Publicists and stars want to be in People magazine, not in tabloids.

Who cares if it is not true, really. What matters here is that these images  got a celebrity status, even before they were even taken.

The second incident is the revelation by Newsweek DP that the Olympics will be mostly a .com event. Ex-photography director, Mary Ann Golon had told me that TIME will be doing the same a few months back . Seems that this Olympic season will be online with additional reporting in print. The slow decay of the paper support is becoming more apparent as it cannot compete with the feeding frenzy. Photography becomes free at last of the written word and regains a position of strength. It can live, breath and exist by itself  on an online slideshow that doesn’t need much explanation. This will only continue to erode the news weeklies here and worldwide. It will also put much more pressure on the photographers to fully report with images and not just be an accompaniment to the text. Its good news.

Posted in license, TIME, celebrity, magazine, Newsweek, photojournalism, slideshow, Royalty free, getty, editorial, transaction, Microstock | Print | 4 Comments »

July 29, 2008 by pmelcher.

This is not the next challenging mountain  path of the Tour de France. It is neither the now too familiar trend of the Getty stock. It is, however, the devastating path of the Jupiter Image stock.  Minus 68% in six months, for a company that is neither linked to the subprime rate or the price of oil, that is pretty bad. It looks to me, and I am not a stock market expert, that this little company is going right down the exit and is just prime for 2 fruity options : being acquired or shut down.

Insider info has also informed us of massive lay offs in New York last week, apparently kept very hush hush. As much as the numbers are unconfirmed, they are talks of maybe 100’s. As we all know, when a public company is failing, the first to be offered at the altar of the Wall Street gods are the employees. The old rituals of human sacrifice revisited for the business world.

There is no doubt in anybody’s mind that Alan Meckler and is team are doing the right thing. It is somewhere in its application by the common employee that something went wrong and thus they should be punished.

Without significant numbers, it is hard to figure out why Jupiter is having such a hard time. Guess is that they are suffering from the same effect as Getty Images : a declining rights manage market, a suffering traditional RF demand, and a microstock division not covering for the losses.  The “Call” where Alan Meckler will reveal it all  is scheduled for August 7. He is probably hoping that most people will be on vacation.

“That is obviously a bellwether of what the future brings and the fact of the creative destruction that is going to happen here.” once said Alan Meckler to PDN. I guess that was not the kind of destruction he had in mind.

Posted in Jupiter, commercial stock, finance, transaction, Royalty free, getty, Microstock | Print | No Comments »

July 23, 2008 by pmelcher.

Woke up this morning to this news: “Dubai, United Arab Emirates, July 21, 2008. Celeb Arabia, subsidiary of Dubai Photographers Agency, the source for authentic celebrity images, today announces the launch of its Middle East Celebrity Photo Collection at CelebArabia.com.”

Cool, I thought… let’s discover Arabian celebrities :  The local Britney Spears or the Sheik heiress that is behaving like Paris Hilton.Who’s hot and who’s not. Well, it was quite a disappointment. The Paris Hilton of Dubai and region is…Paris Hilton.

Pretty damn disappointing.. I know that corporate America is a champion at exporting its brands and I very well know that what happens in Hollywood has more repercussion then  that annoying butterfly in the Amazon forest responsible for so many hurricanes. But still. Europe has a lot of local celebrities, so why not Dubai ? . Can’t they make more money with their celebrity rather than having to import American ones ? Sad…very sad.

However, that is not what really shocked me. The pricing is the biggest smack in my face :

Celebrity photos, and rather good ones, taken by pros, at $44,90 an image ? Ouch ! Cheaper if you buy 100 !!. Paparazzi by the pound. Not sure how it works in Dubai, but usually paparazzi images, being hard to get, sell for a premium. Maybe because they look sometimes out of focus, the “Dubainese” market considers them as midstock material ? The license seems to be “rights ready” as it is mentioned a few time on the site. If it is anything like the Getty one, that means 10 years, $44,90. an image.Well, that is a market that is dead even before being commercially interesting.

Seriously, there should be a license that people should pass before having the right to sell images. Like Real Estate agents. This is getting totally ridiculous with absolutely no sense on how the images are priced.

The pricing of images is like walking into a frat house the day after blow out party : its all over the place and it smells bad. It is embarrassing for those of us trying to make it a ligitimate business because image buyers think we follow some kind of rule.

The rule is simple these days : “My images are cheaper than the guy next door. Even if he moved out. “

Posted in magazine, technology, Pacific coast news, celebrity, license, editorial, transaction, Microstock | Print | No Comments »

July 19, 2008 by pmelcher.

It is not the usage but the image. A flew of photo agencies, including recently Alamy, have come out with special pricing plans for blogs ( non commercial ones).  It appears to be specially arranged  to compete against  microstock, as the prices are very, very low.

Which begs the question and realization that more and more, these days, images are sold based on usage and never on content.  Since the value of an image can vary immensely from one person to another, corporations, like Corbis or Getty have just decided to ignore it in their budgets. It is a known fact that corporations hate variables. So they take a whole sloosh of images and apply the same pricing. All of these over there are RF, these are Rights Ready, and those are too old. Furthermore, they believe that an image only has a value when it is used and that value is only quantified by the way it used.

As much as simplicity is appealing, as much as it doesn’t reflect the real value of an image. As we all know, some are really easy to get ( the Eiffel tower, for example) and some are really hard ( Angelina Jolie posing with her newborn twins) . One would never apply the same pricing rules to those 2 images, if one was a little versed in photography sales. But it doesn’t seem to be the case anymore. In between these two images, exist a whole range of pictures that are either more or less easy to take and also, have added value created by the photographers themselves ( the Eiffel tower taken by a National geographic photographer).

Example:

let say I take a nice image of the Eiffel Tower.  Nothing special. I license this image to a blog. I get 5 cents. Same image, I license it to Microsoft worlwide 10 years unlimited rights desktop usage. $60,000.  Hmmm… what is the value of my image? 5 cents or $60,000?

But more important, is it really the usage of my image that defines its value ? Shouldn’t be the image itself ? More like a painting ? You will buy a Picasso for millions of dollars regardless you put in a closet or decide to attach it on the walls of the British Museum.

Aaaaah, but photography is not art, you will say. You cannot compare. Well, my friend, why would an Angelina  Jolie and Twins go for a cool $11 million ?

Well, it is not the photographer that matters here, it is the subject, you will argue.

Absolutly !!! my point exactly. Photography is even more wicked that its value is not even obvious by who took the image, but what is on it. Sure you have the Masters who commend a certain price. But the bulk load of images are taken by complete unknowns that will remain so. But some of their image will command huge prices.

Because of how they are used? Or because of their content?

At this point you have to agree with me.

While editorial agencies are very aware of the statue and value of their image, stock couldn’t care less. Here, you can have all these images for a penny an image, because after all, no one comes and visits your site. Well, that is terribly wrong and reinforce the idea to clients that photography is a commodity. If someone doesn’t have the budget to pay for a great image, too bad, blog or no blog.

There is value in some images and client should pay for that value.

On another completely unrelated note:  Rumors are spreading that Getty and other wire service are asking their news  photographers to shoot  events with commercial stock resale in mind. Meaning that those  photojournalists no longer shoot what they see but try to , for example, to purposelessly blur peoples faces in order not to need a model release later. To maximize the lifetime potential for an image. As much as it make sense for the agency, as much as it is digging a little bit more in the wound of photojournalism, making it less and less credible every day.

We will probably see more and more denature photographs of world events as photographers will try to cover them on a more “stocky” way .

Posted in photojournalism, license, celebrity, commercial stock, transaction, editorial, Royalty free, getty, corbis, news, Microstock | Print | No Comments »

July 15, 2008 by pmelcher.

The truth about your photo organizations is that they have either no idea what they are talking about or they have no idea  what they are doing. Either way, they are slowly becoming obsolete and useless.
Take PACA for example. The Picture Archives Council of America is preparing for its next “international” meeting to be held in New York sometime in October of this year. One of the panel they have organized for their members   is called ““What Role Will Technology Play With New Business Opportunities?”.
I had to read it twice. Does it say “will” ? Like in the future “will” ? Has anyone at PACA looked around and noticed what is already going on here and now ? How technology is running their business already. For an industry that currently runs 95% on technology ( it always did , by the way) it is a weird panel to have. But this is not the worst part.

The worst part is that they are “excited” to announce that they have secured the participation of  Ben London/Executive Director, Northwest, of the Recording Industry Association of America (RIAA). Now, I do not know this gentleman and I am sure he is a fine person but inviting the RIAA to explain what opportunities exists in technology is like asking a bear what to do in winter.

I wonder what went into the PACA committee’s collective brain who set that up : “lets find an industry that has completely missed the boat on new technologies and is currently gasping for air, for what they think about new technologies and opportunities ?”

I mean, makes complete sense, no ? The RIAA is now known worldwide for its smooth aptitude to deal with change and a prime example of what the photo industry should do. Let’s see what we can take from the RIAA lessons:

Do nothing and then sue everyone.
Desperately refuse the introduction of new technologies and stubbornly hold on to antiquated business models.
Install technology that alienates your customers so intensively that they prefer to break the law then license anything from you.
When desperation comes, jump on any new business model around and dramatically slash your prices ( think iTunes). Regret your decision 2 years later.
Keep on suing. Maybe that will cover the losses
Alienate you artists until they also leave you for new business models
Merge or die.

Rich (it is a very expensive proposition to attend this congress) and successful PACA members will come from the whole world to listen to this man explain how brilliantly the RIAA has handled technology and new business opportunities. And then, after a few drinks, when all is said and done, everyone will go home with the deep satisfaction that this was money well spend . Some will even dream of a potential merger of the RIAA and PACA,  strongly united against the advent of new technologies, new business models and plenty of lawsuits.

Mmm, I wonder why Getty Images decided to sponsor that one event ?

For the latest from PACA, please go here.

Posted in technology, commercial stock, CEPIC, PACA, getty, law, Microstock | Print | No Comments »

July 7, 2008 by pmelcher.

Barely waiting for the ashes of the CEPIC congress to cool down, Istockphoto descended on the island of Malta with a vengeance. In a quite ironical move, the microstock giant has picked the same location than the commercial stock industry association. The difference is that while one was only there to blabber endlessly about photography, the other supplied an opportunity for its contributors to mingle with each other and produce more images. Same place, same industry, two different approach.

Now, most people would react and think : all these photographers are shooting the same thing. What is the purpose? Well, those who have attended the Cepic congress before know that most of the agencies who participate in the congress also keep on trading the same images over and over : You represent me, I represent you, this guy represent us, we represent him, we all represent each other. One day, an agency will end up representing its own work without even knowing it, as it will come back through various representation under a different brand name.

So Istock has thousands of photographers shooting the same thing while traditional stock agency each all represent each other ad nausea. what is the difference ? As we know, volume, quantity, range, depth, millions are the buzz words of this industry, quickly followed by cutting edge, fast search, new website (always a new website), new servers, bigger files.

It used to be that grandad of this industry, Image Bank , claimed high and loud, with proudness and defiance, as badges of honor, the names of the photographers they represented . Today some Istock photographer are better known then any in the traditional world, most certainly the RF world. Lisa Gagne, Yuri Arcurs are better known than any JupiterImage photographers. Go ahead, name one…No, Banastock is NOT a photographer.

So who will criticize Istock for throwing a contributor lovefest in Malta?  Which commercial stock agency will dare throw the first stone, especially knowing that none have done anything equivalent. They throw sub agents lovefest,  a la self declared king of European stock, Alfonso Guieterrez of Age fotostock. Does any RM agency even know their photographers anymore ? I know RF do not, as they rebrand all their images under a theme rather than photographer. RF photo production reminds me of surrogate mothers. You pay someone to have your baby and then you never see them again.

Istock has innovated by creating a market for microstock . It has, however, not lost touch with who the creators are, probably because its founder was an ignored commercial stock photographer before. Lesson learned.

More on Malta Istock lovefest here

Posted in technology, commercial stock, Midstock, web 2.0, CEPIC, Microstock | Print | No Comments »

June 27, 2008 by pmelcher.

“We think Corbis has the resources and patience to succeed in the long-term. We will beat them with better [commercial] execution” Gary Shenk, CEO of Corbis to the Sydney Morning Herald.

There is long term and than there is eternity. Corbis is gambling that eventually, one day, when no one is looking, for no particular reason, ( probably because there is no one left on Earth), just like that, they will “succeed” and maybe post a profit along with it.

The SMH article is  about the rise of amateur photography and  Snapvillage, the Ireland based subsidiary of Corbis that the money loosing company has build to  compete with Istockphoto and other Microstock.

Posted in Midstock, commercial stock, prosumer, finance, corbis, Microstock | Print | No Comments »

June 26, 2008 by pmelcher.

I am a big fan of coops. Initially started in France, Magnum being the most famous one, Coops are small photo agencies created by a group of photographers who pool their resources in order to survive. Most do not last very long, because, along with the financial pressures, getting along amongst photographers with a lot of personality is not a easy task.

That’s what a coop is, really : a group of very individual individuals with a very strong ego. Thus internal fights and argument are quite frequent and explosive. Nevertheless, although very rare in the US ( VII being the exception), coops are striving in Europe. Not just France, but Belgium, Switzerland, Sweden and Italy. You have to have that socialist edge to create or be part of a coop, not really an American thing.

Photographers who belong to those coop have complete editorial freedom and shoot what they want, when they want.It is not always favorable to great business, but it allows for genuine photography. And that is where they are very strong. Far from the hard news already covered by countless wire services and photo agencies, Coop photographers tend to cover the unexpected and forgotten. In a industry now only obsessed by speed, they take their time. They do not produce much or fast and sometimes tend to over think their images. But nevertheless, you might be surprised. very surprised.

PictureTank, the Coop of Coops, or rather a platform that allows for different agencies to pool their images in one place, is a great way to discover and follow the work of many photographers. Presented in full sets rather than single images, it displays the story the way they were meant to be shown. It carries a full respect for the photographers work.

These agencies are not affected by Getty or microstocks. Not even Britney Spears worries them as they all seem to have made a vow of poverty. They understand that the path they have taken will not lead them to stardom or richness ( material, that is), but like priests of a Godless church, they have decided to devote their lives to photography. They cannot be touched because their world is not made of nice cars and expensive restaurants. They care about their work and nothing else.

Not all are good, far from it. You probably have the same ratio of good to bad than anywhere else. Some are helplessly useless while others shine like diamonds. No surprises here.

At a time when photography is all about numbers, dollars and no sense, where photo magazines worry about a supermodel’s ass while others are proud of their scatological content, where  Alain Meckler admits failure even in trade shows production and Corbis remains hopelessly in the red, it is good to see some fresh production.

Posted in photojournalism, Search, magazine, Magnum, wire service, slideshow, getty, corbis, france, editorial, Microstock | Print | 2 Comments »