Tagged: instagram

3 Major Reasons Photo Tech Needs to be Concerned About Rights

The recent explosion of startups devoted to monetizing photography have revealed certain diversity of approach within the photo tech ecosystem, where business models are targeted largely on accelerated aggregation of imagery and either monetization of the audience (data, app charge, etc.) or of the images themselves (advertising, print on demand, licensing/use). Many, like Chute, provide tools for the aggregation of UGC to supplement their campaigns, while others, like 500px, focus on fine art enthusiasts and provide enhanced portfolio tools in a community setting. The variance unfurls like Instagram’s API subscribers: everything from consumer apps to B2B web solutions.

Most all share the view that online images are an untapped resource. In-image advertisers, like Znaptag, seek to push through ads on publisher sites (a similar tagging experience recently departed Stipple helped pioneer). The in-image ad market is heavily populated by incumbents from the ad industry – not photo tech – so often, like other photo tech startups, less emphasis is placed on image inventory and provenance thereof. It’s a volume game, and when the pipes are open wide – and where little regulation occurs – you can expect some trade-off around quality.

By quality, we don’t imply artistic integrity, technical attributes or commercial viability, but the rights associated with an image – the verification of source and the rights granted to an end user. There are many inferior images that reside with image licensing incumbents, just as there are many superior images being aggregated by photo tech startups. It’s how images are sourced, the process, that the industry needs to be vigilant over.

Platform does not equal inventory

The incumbents in photo licensing have the edge in inventory. Existing licensors like Shutterstock, Getty, and others have long placed barriers to entry that reduced-to-eliminated risk for their clients. It was a baked-in process that translated to client attraction and retention, and is still a critical cornerstone of their ability to productize their inventory. While photo tech platforms obsess (and stakeholders watch just as obsessively) over what rights are transferred by each user to them, very few actively qualify each image that is submitted to them.

For many, it’s an impossible task. They exist within the DMCA’s safe harbor provision, and cannot actively be aware of the types of images being submitted to them. With the foundation set, they’re reliant upon opt-in measures (500px, EyeEm, and now Flickr) to build inventory. While this might achieve some success, it is still a decentralized program apart from the main proposition of the platform. Few can create the foundation that a Shutterstock has, which focuses solely on aggregation and distribution for specific audiences. The initial proposition is key – once deviated from, noise level rises and mixed messages ensue.

Infringement claims are rising

Getty’s infringement business is big, and viewed by many pundits as “free” money. Sure, it doesn’t scale proportionately to inventory nor does it scale nicely against admin costs, but it’s growing and others are noticing and coming to the table. Claims aren’t only drawing solutions-minded intermediaries who promise to do the dirty work – this is also a photographer-driven incentive, and those who’ve been infringed upon demand retribution.

Adding to this trend is attention by the government to help copyright claims, which have long been out of reach by individuals due to court allocation and claim processes. Once the doors open up and help facilitate the claims process for infringing use, you can bet even more growth within the infringement industry will occur.

UGC is still perceived as the ‘unwashed masses’ by publishers…and it is

Photo tech startups view the world’s mobile captures as potential untapped inventory rife for exploitation, and in many cases it is, but major publishers are still quite wary of directly sourcing from UGC-based startups due to the inherent risks.

Publishers (and advertisers) will still require confirmation of source, or at least an end use license that provides warranties in instance of a claim. Even the incumbents slip up now and then (Morel), but such anomalies aren’t enough to produce a mass exodus of clients. Risk-aversion is still weighted heavily against startups, whose selection process is non-existent, and any automated or crowd-curated aspects to the platform don’t reflect the rigor expected by potential clientele.

 

Of course, photo tech isn’t aligned with rights on an image level. Notorious terms of services, of which Instagram’s was made famous, was created to be a rights grab. Most startups have adopted similar terms of service, as is common within the culture, but many are quite friendly and transparent. The commonality among them all is a decided pivot away from verifying rights of an image and providing assurances to end users, to shifting risk back onto participating parities on either side of their platform. Despite the volumes of images being added online every moment, copyright law still gives recourse to those who seek it.

 

Where Have The Customers Gone?

The short – and perhaps pithy – answer to where licensees of stock imagery congregate these days is “Shutterstock”, but the longer answer is more interesting, and reveals client-side fragmentation even with recent supply-side consolidation.

Nearly twenty years ago, the stock agency landscape was fragmented and analog, two of the requirements for Mark Getty and Jonathan Klein’s success. Their biggest achievement – like successors iStockphoto and Shutterstock – was in building a platform that had no peer in delivery to customers, across speed and accuracy of search, ease of use and price. Klein often referred to “the power of the platform”, and certainly today no one can boast platform power better than Shutterstock.

In recent past the value prop post-recession was price. iStockphoto and their peers instigated the balance of market share shift toward inexpensive credit-based prices, but the real battle in the trenches was around ease of use and access – price was important, but given the overall increase in price variance industry-wide it gradually ceded its argument to access. Market education, and the guidance of expectations fostered from mobile apps, informed customers along immediacy and not price.

Content was an afterthought, as oversupply afforded plenty of options in one place. The more customers turned to Google for image searches, and organic means of finding content via social platforms, the more fragmented the market became as did the noise-to-signal ratio. The non-exclusive nature of the industry in some ways worked against itself and siphoned off traffic from iStockphoto and Fotolia, as they all represented the same content, so why not go to Shutterstock’s all you can eat buffet?

So, where are the customers now? There are more of them, yes, and they are licensing more for shorter duration of use, so volume increased. The major problem with identifying where the customers are is tied to their behavior – they’re everywhere, yet nowhere (specific), spread out across the social graph and business landscape. More than ever, they’re finely and narrowly segmented from the personal publisher/passive user to seasoned ad campaigner. Moreover, they’ve moved on from traditional content sources, and often the only and earliest affiliation they have with licensing images is from iStockphoto, who set expectations that few businesses have been successful in emulating years later.

To reach customers with the type of network effect and scale of an iStockphoto or Shutterstock, you need a platform and truly unique proposition. For aggregators, the good news is there’s plenty of content on the market for free; rights grabs by Instagram and other apps, who aren’t even in the business of licensing, show how easy it is to gain broad rights to content. If you’re focused on licensing from the outset, like Foap, it’s a simple and transparent acquisition strategy (and a mobile one). The only real way to capitalize on acquired content, and engage customers, is to continue to shorten the span of the act of licensing, so that it becomes a mist in the background – the deus ex machina that simply grants permissions and exchanges money simply, effectively, and quickly.

UGC: The Second Wave

A year ago, image licensing platforms Shutterstock and Fotolia – both user generated content platforms – secured an IPO and substantial private equity (respectively). At the time this signaled a resurgent interest in photography business models, no doubt tipped off by Instagram’s $1B valuation and acquisition by Facebook. Today, this interest is materializing in the capitalization of a few seasoned startups in the image industry. It’s an odd array of similar-yet-divergent value propositions and models, but they all seem to be vectoring toward monetizing UGC from mobile within the commercial licensing industry.

The activity seems all outside of the US, where conditions in getting user traction and (against US trend) seed capital might have been more favorable in recent past. Finland’s Scoopshot, who cleverly leverage Twitter in a ploy to aggregate news imagery, secured $1.2 last month. Swedish company Foap built a mobile photo app enabling a photographer to sell to an end user, and recently secured $1.5M in capital for pushing its 5.7M images out into the US market. German company EyeEm, billed as Europe’s Instagram, secured $6M to exert its collection as well as leverage their own visual recognition technology. The most recent winner is Toronto-based 500px (who have built an extremely popular destination around best of breed/curated content) and have been pivoting toward commercial licensing for a while – it secured $8M to go full throttle.

While this level of capital isn’t a massive windfall, it is a story line that continues across many other startups who have focused on mining photo apps for end use licensing, and other outliers with similar models. They all seek to displace brick and mortar mainstays who have been unsuccessful in mobile aggregation for their market. Engagement and education of mobile photographers to make available their property for end use commercial licensing is fraught with hassle, and the return compensation is low enough to be a barrier for any involvement.

Where there has been decent coverage around investment, other startups have been flying under the radar. Snapwire, an angel-funded startup with the simple proposition of mobile aggregation for end use licensing (via a request platform), has been modeling their message around empowering the mobile photographer to monetize – there’s no subtlety (or aggregation pull) in pure commercialization, and Snapwire is quick to convey a deeper connection to mobile photographers via creative collaboration and pure photographic passion. Snapwire joins already existing ImageBrief, a request platform launched with DLSR-pros in mind and now certainly less agnostic about method of capture. Any UGC business knows that the joy and discovery in applications such as Instagram is a key component to participation, and critical in the success of any UGC startup with an eye toward the transfer of rights required for commercial licensing.

There are enough lessons learned from the first wave of UGC (iStock, Shutterstock, Fotolia) to apply to mobile capture. First wave aggregators did a good job of expanding the market by making content more accessible (i.e., cheaper, faster), but fell short on innovating on the supply side – particularly in the realms of content curation and mobile. The second wave of UGC – squarely focused on mobile – might benefit from the lessons of the past. Even though they face a crowded market with overlapping value propositions, they’re intent on making inroads to the millions of new and emerging artists, empowered by improving image quality on the cameras they carry in their pocket.