The annual conference CEPIC recently took place in Berlin, where international photo libraries congregate primarily to seek distribution for their images and/or image collections to represent for their clients. The industry they serve is commercial and editorial image licensing, and their clients are advertisers and publishers of all stripes and colors; the fact that publishing has been in contraction for quite some time has displaced many image licensors, but to add insult to injury the advertisers are showing attrition as well.
Typically, CEPIC has been viewed as the single-most important conference for the dissemination of news on mergers and acquisitions, launching of new ventures and products, and the type of intel gathering that can significantly inform one’s business strategy. What was once a critical gathering full of insight is now devoid of such news and intel, but even a room full of people (the most telling no-show: local photo startup EyeEm) going through familiar motions without any real buzz isn’t proof of an industry in decline. We can look to more conclusive evidence of a decline than what didn’t happen at CEPIC.
1. Diversification from the Big Incumbents
Getty, Shutterstock and Corbis are arguably the largest image licensors and oldest stories within the industry. What have they been up to lately? Moving away from transactional licensing models and diversifying their product portfolios and revenue streams. Getty’s core commercial licensing business has it’s challenges, but their infringement recoupment business has seen significant growth, and they’re seeking other monetization models that are built around the use of imagery online (embedding for data culling, sharing image data to Pinterest users, etc.). Shutterstock has taken significant market share away from anyone engaged in commercial image licensing, and while they’ve almost invented the subscription category through its continued improvement in experience to the end user, it’s still a fixed market. Aside from product diversification (Music, Video, How-To Videos), a key acquisition made in WebDAM allows them to move into the CMS area and – overtime – less reliant upon image licensing revenues. Corbis has all but given up on their commercial offering, instead throwing their chips into the new Branded Entertainment Network. Pivoting toward the entertainment industry carries a larger future promise for Corbis, and leverages their equity in rights and clearances.
2. DIY Campaigns
The skills required to execute a powerful image have migrated from a core group of experts (photographers) to virtually anyone, thanks first to digitization from analog processing, then online distribution. Being able to take your own photo for a campaign, product or reliant upon UGC participation to help market brands and products has significantly displaced traditional markets for image licensing from being the sole source (outside of assignment photography) to a last resort. It’s free (relatively) and you don’t have to sweat rights.
3. Distribution of Photography
The core image licensing industry controls around 250 million images (in abstract), many of which are redundantly available across multiple sites and shared and distributed out across the web. This is a tiny amount compared to the 1.8 billion photos uploaded and shared out on social networks per day. Not including Pinterest, which is all about photo distribution, and Google, which is the defacto site for image search, 1.8 billion is still a staggering number that relegates the image industry to outsiders looking in. Most image licensors expect clients to engage with images on their own storefronts, on their terms, but those potential clients have far fewer impediments to acquiring an image elsewhere…and do.
4. Investments Have Migrated
The investment community has put money back into photo businesses, but it’s all banking on models that are monetization of UGC and closer alignment to customers – the vendor role is an obsolete one. Companies that are getting funded and are getting traction have focused on providing request platforms (reinventing and bringing value around the photographer/buyer relationships), photo communities (aggregating first, then engaging the buy side), or analytics and services that are tied to retail and branding. All of them have a fundamental product identity that is not search/license/download, and for most photography is a means and not an end.
These trends are not the customary topics of conversation among incumbents, and at CEPIC the conversation revolved around shrinking distribution channels, lower prices, lower volumes, and Google’s latest battles with the EU. This is well-worn fodder, but missing the larger picture. The state of transactional image licensing is one of continued irrelevance — there’s a reason why Shutterstock has gained marketshare, and why new offerings crop up that look nothing like their predecessors. A whole new generation has been educated on what image acquisition means, and its expectations on everything from price, use, and point of access are far afield from the realities of years past. This generation, as well, is defining a reality that is broader in scope than image licensors can envision. The good news for those incumbents that solely engage in transactional licensing is that they’ll have more and more avenues available to them than ever before, and their advantages (niche aggregation, robust data, clearances) can position them to take advantage of the new marketplace, but it won’t be easy.