Tagged: ugc

Oh, What A Difference (Or Not?) 5 Years Makes

Stock image consultancy firm Visual Steam recently published a summary of their 2014 survey of US art buyers in stock image licensing. It outlines some of the major trend lines from the previous year (continued pricing pressure, use migrating to online and away from print), and provides insight into buyer habits across sourcing, pricing models used most, and “top of mind” destinations for sourcing images (it’s still Getty’s game, but Shutterstock continues to nip away).

Comparing trends between this year and last might reveal glacial-type movements among art buyers, who largely have not changed their habits over 12 months. What about 5 years? The publication Graphic Design USA, for many years, has been publishing its own stock visual survey (itself sponsored by a commercial stock licensor). Have 5 years of buyer habits changed all that much, and what do their habits reveal about trend lines and the stock industry’s response? Similarities between GD USA’s 2009 survey and Visual Steam’s 2014 are close enough for comparison.

Motion

The use of motion has increased greatly over 5 years, according to those polled. In 2009 the amount of buyers licensing motion was 35% — today it is 73%. The amount of producers and licensors of motion have not commensurately increased within the stock industry, so where is increased demand met? Is inventory finally being exploited across Getty, Pond5 and others, or has the increase in use been met through assignment?

General Use

41% of buyers polled in 2009 said they use stock more than in the previous year. 60% of buyers polled in 2014 said they expected to increase their use in the coming year. While this comparison is reality vs. forecast, it does not at a general volume increase year over year, which should be aligned with ad growth. However, sales volumes do not equal revenue volumes. To further illustrate the eclipse of digital over print, almost all of those surveyed in 2009 used stock for print campaigns, and today it’s roughly half.

Spending

To which pricing and licensing models does the money go? RF licensing still sees the lions share, which is little surprise. RF saw over half (54%) of what was spent in 2009, while 2014 increased to 59% over RM. What was not tracked in 2009, but relevant today, is Free use – 13% accounted for total licenses acquired in Visual Steam’s survey, making the rise of direct to photographer sourcing by buyers a powerful theme. Certainly, Flickr, Creative Commons, Google Images, and outside distribution and sharing has accelerated this trend. Spending little, if anything, is still a major driver in content sourcing: only 23% said that quality trumps price every time.

Sourcing

Perhaps a trivial difference, while most all sourced their imagery online in 2009 quite a few were reliant upon print catalogs and CDs. While GD USA’s poll doesn’t give us buyer preferences around where they source, Visual Steam’s does, and Getty is still top of mind among stock licensors. Getty and iStock accounted for well over half of those who were asked of an immediate “go-to”, with Shutterstock not far behind. Corbis and Veer are very much considered tier 3. These findings certainly reflect market share capture. A distant, yet powerful, source was Google Images, but what remains opaque is whether this a front door to industry licensors who benefit from tagging and ads or a method for sourcing outside of stock licensing (and what is the differential?).

Buyers seem to have grown accustomed to subscription and trolling micro sites for cheap RF in the past 5 years, since questions in 2009 (“have you used a micropayment site?” and “have you used a subscription service?”) seem as antiquated as print catalogs and CDs. No doubt, with the move by iStock to go up market with its Vetta collection (and with Shutterstock mimicking the same in its recent Offset), buyers are challenged to break old prejudices even if in practice it was a shell game of content by the licensors.

Will we see the same prejudices – this time with user-generated content – be defeated in 5 years time? UGC was raised as a question in 2009, and over 1/3 of respondents said they’d used UGC at some point in a campaign. Oddly, Visual Steam’s survey did not cover UGC. On the tip of the tongue in 2009, today it remains as fragmented and immature a market as ever, with many startups and incumbents seeking traction and market acceptance as iStock did. What most photo tech companies who venture into monetizing UGC for the stock buying community consistently fail to grasp is that quality still is paramount (quality implying provenance – or assurance of rights), and that a simple exercise in aggregation does not account for the convoluted landscape built on the preferences and practices of a fickle market. Is 5 years really that long a time to solve the problem?

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.

 

4 Indicators That Outline the Decline of Image Licensing as We Know It

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.

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.