The Value Beyond The Transaction

The traditional image licensing business is a transactional one. Historically, the management of rights was considered to be an ongoing service, but with royalty free models eclipsing rights managed volumes, this is of little to no value for today’s image buyer. All value is wrapped up in the transaction: image rights and metadata are pre-vetted, and those are the most important and critical components to the product. Consumers are buying a license – not an image – and that license makes warranties of accuracy that assuages risk.

Today, there’s little perceived value in the function of an image agency. It’s all about the transaction (and sometimes the organization of inventory). Customers have little loyalty, and it’s of little surprise; the image industry has done little to evolve with the needs of their customers – those exceptions are responsive to price and convenience (e.g., iStockphoto). There are many vendors hawking the same inventory in most markets, and the resultant expectation of the market is akin to vending machine behavior.

Image agencies, in order to secure a future relevancy and add value for their customers, need to diversify. Shutterstocks’ recent acquisition of WebDAM can certainly occupy the category of diversification. The digital asset management company, successful in the enterprise content management space, will allow Shutterstock to drive its core business deeper into the existing corporate market. However, the ECM market is twice the size of the image licensing industry (and will grow over $9B in 2017), so penetration into this market allows for them to sell services across both sectors. With the rise of content marketing and brands as publishers, customer needs – and indeed customers – have converged. Demand for content (including imagery) goes hand in hand with content management demands.

Getty, for nearly a decade, has been selling its own DAM solution (Media Manager) for media-centric companies, but as an early entrant into the ECM market it was modeled on the needs of companies close to Getty – near-in opportunities to sell a new product to existing customers. Developed prior to cloud storage, and repackaging existing technology, it still represented the type of service mentality and alignment with customer needs that is critical in the deployment of successful ECM SaaS solutions.

In the spirit of aligning with the needs of customer, a few other image agencies have been willing to move beyond the transaction into unchartered waters. Yay Images’ most recent subscription service allows customers to edit their images before generating an embed code (and thus hosting the image being used), pivoting toward providing web-based content solutions and away from a strict image vendor. Newly-minted Snapwi.re is focused on creating demand as a request platform, pulling the customer in close on the conversation and empowering them to participate in the creation process.

What about the reverse, where successful services-related businesses ventured into image licensing? Two tales come readily to mind and both share similar paths at the same time: PhotoShelter and Digital Railroad. Both came to market as a photographer portfolio platform, and both took steps toward building a marketplace for their photographers to opt-in and license. Digital Railroad exhibited good growth at the outset of their Marketplace – a big selling point being its unique collection – but other problems doomed the company. Photoshelter, after almost a year in market with their Photoshelter Collection, threw in the towel after not seeing the type of growth they had hoped for.

While service and solution-focused companies seeking to pivot into image licensing struggle in finding traction (in fact, they fail), the incumbents entrenched in image licensing struggle to hold onto their customers and move with them across a changing landscape. Shutterstock’s WebDAM acquisition is a convincing move that reframes the question of what an image agency is, and what it needs to be, but is it also hedging its bets on behalf of its shareholders; is it serious about innovating in the ECM space? Moreover, do others possess the ability, vision and mettle to follow their lead?

The image industry has a lot of knowledge and insight into content management, content distribution and content rights – all of which are highly germane to content marketing and publishing. Many are innovating on the creation and delivery of solutions into this space, but very few are image industry incumbents. If image agencies want to provide value beyond the transaction, they’d be wise to study not only their current customers, but identify their future ones.

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