Crowdsourcing

Have Microstocks Hurt Stock Photography?

An interesting thread started to emerge on my last post, and I figured it had enough appeal that it was worth upgrading it to its own stand-alone entry. Russel Kord, a stock photographer who has been active in discussions involving crowdsourcing, stopped by to note that contrary to certain gloomy predictions, crowdsourcing has yet to adversely affect his business. Before we dive into this subject, which certainly deserves scrutiny, I should provide a bit of background for readers who haven't been following the crowdsourced photography debate. Writ brief, in the last several years companies like iStockPhoto and Shutterstock have been able to undercut the price charged for traditional stock images by more than 90 percent. How do they do it? By selling images submitted by (mostly) amateur photographers who are happy to see their work published at all. The conventional wisdom—as promulgated by many in the stock photo industry and journalists like myself—is that this would cause considerable disruption for stock photographers. Was this judgment precipitous? If you're a stock photographer, I'm anxious to hear your opinion in the comment thread. In the meantime, here's Russell, followed by my response:

Russell Kord:
"Its quite a while since I shared any thoughts about crowdsourcing with you. The rants of a year back have been tempered by the reality of dealing with the effects of crowdsourcing on a daily basis in my small stockphoto production business.

A year or more down the road the implosion of stock photo prices has not yet happened. The millions of potential stock shooters working for nothing haven't appeared. Photography created by crowdsourcers has been predictable and adequate at best. There is a low price market for it, and some money to be made by those doing the agglomeration. But it hasn't put me out of business. Chiefly because the quality just isn't there.

I wonder if it ever will be? What will the place of the enthusiastic amateur be in the stock photo business?
In the end will new talent migrate out of crowdsourcing for peanuts as soon as it is recognized, leaving the whole sector as a bargain basement of adequate images?

Maybe not enough time has passed to see the full extent of crowdsourcing and how deep are the long term effects of this process. For now the iStockers are still out there shooting images for a buck, but on the eve of the deepest recession the USA has seen in half a century or more, the sky has not fallen in on professional stock photographers.

A deep long lasting recession should see companies cut advertising and/or R&D budgets, thereby revealing further insights into crowdsourcing's likely place in our little planet's economy. Maybe then we'll see crowdsourcing take over the world."

Jeff Howe:
Great to hear from you Russel! It's good to hear that the microstocks haven't hurt your bottom line. I spent a week at iStock earlier this year and have looked closely at the industry this year. I think what we're seeing emerge is a more complex market for images than previously existed. In the days before microstock the demand for low-end images was underserved, or maybe even unserved. Consumers couldn't afford stock photography, so they made do by shooting their own photographs or taking them off the Web or some other ad hoc strategy. These image users can now pick up a selection of low-res images for under $20. Meanwhile, the high-end market probably hasn't changed all that much. As an art director at a big New York ad agency told me, "L'Oreal is never going to use microstock. They've got a million dollar budget and they're going to get the best possible image." Naturally, if someone is at the very top of their game, they aren't likely to sell their images on iStock.

That said, a few trends point to a very definite overlap between these two markets, to the detriment of traditional stock. First is the radical growth of iStock, by far the market leader in microstock firms. I'm not at liberty to divulge the exact dimension of that growth, but rest assured it's such that any new company would kill for. While it's possible this is simply an indication of the considerable demand for cheap images, I find that unlikely. And on an anecdotal level, I talked to several designers who stopped using trad stock and moved to microstock. More persuasive still is the fact that both Getty and Corbis have seen their core businesses (rights-managed stock photography) suffer declines, especially in the last few quarters. It's no accident that both are moving into microstock and otherwise diversifying their revenue sources. So that opens the question, if Russell isn't seeing diminishing demand for his work, or downward pressure on prices in the industry as a whole, how are these trends affecting the industry? Getty and Corbis have both made cuts to staff. Are their photographers getting out of the business? (If they are, you can bet their ranks are being filled by erstwhile amateurs who are more than anxious to be represented by the likes of Getty.) I know I have some photographers reading Crowdsourcing.com. Now's the time to make your voice heard!

Commercializing Community, Continued

Well, Bruce's first installment was a smash, at least by my standards, which is to say, it generated some excellent, thought-provoking comments. The topic Bruce touches on adroitly, and which readers have appropriately picked up on, is the role of passion in community production systems. That's a fancy way of saying that people will only do something if they care deeply about it, and anyone monetizing their contributions had damn well better be aware of it. Community members aren't employees--they're partners, and need to be treated as such. Actually, I'm not sure this applies in every case, but I'll save my parsing for the comments section. Here's Bruce's last three rules in the essay:

4) Ask the Right Questions

With a community-based marketplace, this tenet, as simple as it sounds is even more crucial than in offline ventures. It’s crucial because communities are made of people who are deeply attached to what happens in what feels like family. One wrong move can have repercussions that reverberate throughout the network for weeks and months to come.  So we try to treat big decisions about iStockphoto with as much care as we would major personal choices. Examples include; Is it Fair?; Is it Best; Who is Going to Like this Decision?; Who Is Going to Hate It, and Why? Then we refine choices based on the answers to these questions in order to come to a solid decision that will make most of the people happy.

5) Listen, Even When it Hurts

Anyone who wants to start a social network has to be committed to deeply knowing the vast majority of their members. That means a lot of late nights and countless, chronic, hand-numbing e-mails. For example, I recently returned from a week’s absence to find 6,700 e-mails from iStockphoto members waiting for me. It took me four days, but I read every one, and responded personally to most of them.
Other CEOs might have a secretary weed things out, especially the unpleasant challenges or questions. To be authentic, I need to stay deeply connected to the community. In every social group like this there are people who might appear to be critics. Don't mistake their passion for conflict. I try to write a personal note to every one of these people, because they often have very important ideas. If you listen, the community will give you the best ideas.

6) Change at the Right Speed for the Right Reasons

By staying connected deeply with the community I keep my finger on the pulse of what new features or modifications are needed. It's important to provide continual and constant progress. Change needs to be introduced at a pace that people can absorb, while the core and essence of the community and site features remain the same.

Commercializing Community

I liked Bruce Livingstone five minutes into my first conversation with him. Bruce is the founder and CEO of iStockPhoto.com, to my knowledge the first and largest of the so-called "microstocks." (To see the role microstock has played in the development of crowdsourcing, read here.) For one thing, Bruce likes to fly fish, and while it's possible there are untrustworthy types out there who also fly fish, I haven't met them. Second, he spent years touring the West Coast as the singer of a punk rock band, evidence that Bruce appreciates the finer things in life. But what I find most winning about Bruce is that he's an accidental entrepreneur. A designer and photographer, he started iStock because he didn't have the money to launch a traditional stock company. So he gave his photos away, and found a community of other talented people willing to give their photos away to. The value, as many content companies are still struggling to understand, wasn't necessarily in the thing itself.

I've got a special treat today. Bruce has written something for us here at Crowdsourcing.Com, a two-part meditation on how to make money off community. I think this question has become increasingly important to everyone in the culture industry, as communities have begun to replace the company as an organizing unit of labor. This is still terra incognita, which makes Bruce a pioneer of sorts. Without further ado, here's part one of Bruce's essay:

Is Social Networking Sustainable? Thoughts on Building a Social Network with Staying Power ...

The phenomenon of entertaining media sharing sites may be devouring itself with hundreds of flavor of the same offering. While advertising can be very successful as a model, for long-term success, it works best triangulated with other revenue methods, such as monetizing the user-generated content itself, or smart co-marketing agreements.With more than one million passionate members, including more than 33,000 contributing artists and an image or video file downloaded somewhere in the world every three seconds, iStockphoto has effectively turned community into commerce. Here are six principles I've adhered to as CEO of iStockphoto:

1) Put the Passion First

Here are a couple of the most notable quotes I've heard from iStock members: “iStock was built on passion, not on dollars” and "iStock is not a full-time job, but a lifelong passion." Threads and connections of people with common interests and shared passion for visual communication built the roots of iStock. The economy of micropayment stock followed.

2) Virtual Community is Only Sustained by Real World Gain

Social networking and social media sites are hot topics right now just like the mid-nineties when having a Web site made you "e"-enabled and cutting-edge. Natural selection will subsume the weakest players in this phenomenon. As competition grows, I believe the most economically successful social networks will be niche-focused with offerings that fill a real-world business need. For example, iStockphoto makes value-priced royalty-free images, illustrations and video available to a broad market of people who couldn’t afford great visual content before. We also give artists direct access to more than one million potential clients, more than they could ever reach alone. So, everybody stands to make money, or save money, while sharing and learning about our shared passions, pictures and video.

3) Build a Community to Fill the Gap, Not Follow the Leader

When I was a young punk, I thought I would pursue a career in music and spent years in bands and playing in dirty nightclubs. One day a kid showed up and could play EVERY instrument better than I ever could. I thought, ‘This kid is 10 years younger than me, and he’s kicking my ass. I’m not going to compete where I can’t win.’ That idea has guided many of my career decisions and I think it is a good rule.  So many people are trying to compete in social networking segments where there is already a clear winner. Why?  I say, look for the areas where no one is providing a solution, and create one. Then innovate like hell, stay fresh and keep growing. With iStockphoto, we saw a need for value-priced imagery for designers working on a budget or small business owners, and we filled that need. Others have come after us, but no one does it as well.

Tune in tomorrow for the rest of Bruce's essay ...