127
NEW LIFE FOR NICHE MARKETERS
March 6, 1998
Do the super-agencies effectively cover all the markets in the world? They have many
offices and
make sales worldwide.
But, they are also developing
marketing strategies that could severely limit their penetration of certain segments of
the stock
photo market. Some of
these segments represent
substantial dollar sales.
Many photographers produce a few images that can compete for major advertising uses,
and a larger
quantity of material
suitable for certain niche
markets. These photographers have tended to place all this work with a single large
global agency.
Recently, there are
growing indications that many
major agencies will withdraw from effectively supplying certain niche markets, as they
pursue
advertising sales.
Why would large agencies avoid any markets? Because the profits they can make
from such
sales, relative to the
cost of engaging in this line of
business, are not attractive enough to interest their investors.
No agency will currently admit to such a strategy, but their actions lead to this
conclusion.
Individual photographers
needs to carefully consider the
directions in which their agency is headed and determine if it is in their (the
photographer's)
best interest.
Before I go further, I need to point out that activities attributed to "large
agencies" in this
article are not
happening equally at all large
agencies. Photographers currently represented need to watch their agency, be alert to
the changes
and consider their
options. Photographers
considering joining a large agency need to ask probing questions, particularly of other
photographers who have experience
with the agency.
Things To Consider
There are several aspects to this issue that need to be examined.
- First, under what circumstances would the large agency be less effective than a
small one
in selling to niche
markets?
- Second, what are the indicators that large agencies won't be a source of niche
images in the
future?
- Third, editing is the key.
- Fourth, how and why are the specialty agencies likely to benefit and who will be
some of the
leaders?
- Fifth, how do photographers adjust?
Large Agency Strategy
Many super-agencies have decided that their future is in selling to the high end market
through the
internet and are
positioning themselves for this
future. They also believe print catalogs will be a strong marketing tool into the
foreseeable
future.
These agencies have traditionally had broad, deep files that support their catalogs,
even though
the majority of their
income tended to come from
catalog sales. Some are now recognizing that the cost of maintaining these files is a
drain on
capital and they are
getting more particular about what
they accept and keep. This drain comes at a time when they need increased resources to
move into
digital marketing.
In general, leading agencies recognize:
- They have much more material in their files than they can ever afford to
digitize.
- The up-front costs of preparing an image for digital marketing is greater than the
cost of
traditional filing
methods (which must be maintained
as well). Attaching words to the images (keywording or some type of natural language
caption
information) is critical to
finding images in a digital
file. This is true even if the file search is done by in house researchers, rather
than the
general public.
- Digital preparation of editorial images is even more time consuming, and thus
costly, than
concept images because
they need to be described in
greater detail.
- Given that in the best of circumstances an agency only licenses rights to a small
percentage of
the images in
their files, in the past some
agencies have accepted far too many images when compared to the number they are
actually able to
license.
- Print catalog images will undoubtedly sell well in the digital environment, but it
is unclear
how much else will
sell well enough to offset the
costs of filing.
- Royalty Free may take over the market for simple, clean, straight illustrations.
Thus, it is
unclear how much of
this type of material should
be accepted into the files or put in print or digital catalogs when the agency is
attempting to
license one-time usage
rights at higher
rates.
At this point on-line sales figures are not significant enough to make educated
judgements as to
how much
non-print-catalog material it may eventually
be economic to digitize. Agencies are trying different strategies, but the jury is
still out. In
the long run, I believe
the Corbis approach of
digitizing everything selected and having no back up film file will not produce
profits. Providing
a broad enough
selection to catch the browser and
draw them back to the agency for a more in-depth search of the general film file may be
a better
strategy. Defining how
much is "enough" is the trick.
The major agency focus in selecting images for digital files tends to be toward those
images that
fulfill classic cliche
concepts in a new way. This
kind of image has produced the greatest return per image in the past and also happens
to be
proportionally less expensive
to file.
This agency position is understandable. As the industry changes agencies must adjust
their
marketing strategies to stay
viable. Agencies must
concentrate on lines of business that seem likely to produce the greatest profits, and
drop those
with marginal profit for
the effort expended.
But, in this process the odds are that those images that are not scanned will be pulled
less
frequently to fill client
requests.
Actions Speak Louder Than Words
Some of the public positions that agencies take are not necessarily born out by their
actions.
Watch what they do.
The following observations
are the result of dozens of conversations with photographers and stock agents over the
past several
months.
- Agencies are placing much more emphasis on building their "Core", "Selects",
"Master Dupe",
etc. file than their
general file.
- Agencies are narrowing the working file that they go through to cut down on
research time.
They talk about having
millions of images, but the
"active" files they look through on a daily basis may contain many fewer images.
Often, if the
researcher finds a good
representative sample of images
on a particular subject in the "Selects" file he or she may not bother to look in the
general file
to see what else is
there, assuming (maybe
correctly) that the "best images" are in the selects file.
On the other hand, we are hearing more frequently that clients can't find the image
they are
looking for at the big
agencies. For example, a client
called a major NY agency that they work with frequently. They were looking for a
straight simple
shot that said Greece.
What the agency sent was too
arty and didn't include the cliche' images. Rather than going back to the agency, the
client
assumed this was the best
they had and called a local
photographer. As it happened, the photographer was represented by the same NY agency.
The
photographer went to his
files, sent the client the cliche'
images they needed and made the sale.
Editing
An agency's editing strategy is key to a photographer's success. If the image is not
in the file
it can't get used.
Change in the way a file is built is a critical long term decision. It may take years
before the
results of the change
are recognized, but if it is
ever decided that it is desirable to reverse the process it will also take years to
recover.
- Editing at many agencies is getting much tighter.
- Editors are looking for images of "advertising quality"
which tends to mean major print ads. They sometimes seem to forget that insert photos
in short
print run brochures are
also advertising. Images
needed for editorial use are seldom defined as of "advertising quality."
- Those that ascribe to the theory that RF will capture the market for straight,
simple imagery
believe that in the
future, imagery sold from
traditional files will have to be extremely unique. Thus, we find an editing emphasis
at some
agencies that rejects the
type of imagery that might be
found on RF discs. While RF is making inroads, a huge percentage of the sales of
simple, straight
forward imagery that
these discs are famous for
still comes from the traditional files.
- Photographers are told to edit very tightly before submitting and to send only
those images of
"catalog" quality.
But, there are certain types of
subject matter that never make print catalogs, and there is no clear definition of what
a "digital"
catalog could or
should contain. With this
strategy many potentially marketable images, that in previous years would have been
accepted for
the files, are either
never submitted to the agency,
or never shot.
- When reviewing submissions, the focus on what to keep is much more on "generic" and
"concept"
images than on "content
specific" images.
- Editors, and researchers, see so many great images that they may become jaded by
the straight
shots. They will only
accept images with a NEW angle
or a NEW look.
- Agencies are pushing photographers to produce a modern or MTV look and are
rejecting images
with a more straight lit,
clean, postcard look that
established photographers have been selling for years. Certainly the MTV look is
selling, but the
classic straight shots
are also selling -- if they
are where a client can find them.
- Images that are editorial in nature are often not considered for the files. A
straight shot of
a contact lens, a home
aquarium, a city council
meeting, or daily life in the Ukraine, Kenya or the Netherlands may be rejected. While
the demand
for subjects like these
may be occasional
nevertheless there is demand. However, the demand may not be enough to justify putting
such images
in a print or digital
catalog.
- Some agencies are accepting a much smaller percentage of the photographer's work.
Photographers with years of
shooting experience, and making
significant five figure incomes from their agency, tell me that shoots which would have
been
gobbled up in years past are
now being almost totally
rejected. This discourages the photographer from continued production.
- To get the right images into the file for editorial and small insert brochure use
it takes a
totally different type of
editing than what is needed
to produce six catalogs a year aimed at the advertising and corporate market.
- As agencies look at each image in the file to determine which ones are candidates
for
digitalization, they are also
deciding if certain images
should remain in the file at all. This is the perfect time to purge the working file,
if purging
is desired.
- At some agencies images deemed to be of lesser value in today's market are being
shunted off to
a secondary file that
is seldom used. At other
agencies bundles of images are being purged from the files and returned to the
photographer.
Another photographer with five figure sales from his agency got back 80 lbs of material
that was
purged from the file.
Many of these images had sold
in the past for small uses. Some were obviously out of date and may have been replaced
with
updated images from other
photographers, but many had a
timeless value. The type of images that have been used as insert photos for brochures
are now
disappearing from the files
of some agencies.
- Editors whose responsibility it is to purge seem to have little understanding of
what sold in
the past.
- On the other hand, Index Stock does not select as tightly for its digital file as
many other
agencies do. They make
many variations available
on-line and provide a depth of coverage of all the material they accept into their
general file.
Recently an image taken
in the Western U.S. has
turned out to be a best seller. The New York editor told the photographer, "I would
have never
picked this image for a
catalog. What makes it so
great?" As it happened there were special regional characteristics that made it a
standout for
regional users, but these
characteristics were not
readily apparent to the editor who comes from the East.
Such special images will always be missed when there is too much emphasis on tight
editing.
Increased Use of Specialty Sources
As clients begin to discover that more and more of the specialized images they need are
not
available through the major
agencies I believe they will
turn to niche agencies and individual photographers who have unique specialties.
There are two types of niche suppliers. There are those that handle a special type of
material,
and those that
concentrate on serving a particular
market like educational. (I will discuss the educational and textbook opportunities in
greater
detail in the next
article.)
One of the dangers in developing a niche is that the demand for this specialized
imagery may be so
small that sales do not
justify the necessary
expense to adequately market the file.
Nevertheless, many niche agencies have been doing very well. Often they make major
sales to a
particular industry in
addition to occasional sales of
their unique material to the general market. Some examples are: Grant Heilman with a
specialty in
agriculture; George
Hall/Check Six selling to the
aviation industry; Custom Medical Stock, medical industry and Alaska Stock as a unique
supplier of
images of Alaska.
These agencies do some catalog
marketing, but many of their sales result from their being known for having in-depth
collections in
their particular
subject area.
Other specialty niches include Biology, Travel, Sailing, Underwater and Science &
Technology.
One of the advantages for some photographers in working with niche agencies is that
these
agencies are often more willing to work with specialists who have a few
outstanding unique images, but not necessarily a large collection.
Two leaders in the educational field are Stock Boston and The Image Works. Their
editors
understand the textbook market
and select images for the
files based on that knowledge.
One hallmark of niche agencies is that their researchers have a depth of knowledge
about their
subject matter that often
appears to be lacking at the
major agencies.
Researchers who work for many of the major print catalog producers spend a good deal of
their day
doing little more than
image pulling because the
research was done by the client who selected from the catalog.
I don't want to imply that none of the big agencies are doing good research for
textbook requests,
but it is becoming
rarer. And as they fail to
supply the needs, the clients will seek other sources and those with a more intimate
knowledge of
their subject matter.
The big agencies could go back to accepting everything, but I think that is unlikely.
It would
greatly increase their
costs to go after this extra 10%
or 15% of the market and consequently reduce their profits. What seems more likely is
that they
will "say" their
intentions are to supply all markets,
but will continue to edit primarily for the advertising market.
Another strategy for corporations that own both editorial and advertising oriented
agencies would
be to arrange for
simultaneous editing by all
agencies in the family of any new material submitted to one agency. There are hints
that some of
this is going on, but it
could become an
administrative nightmare on a large scale. I don't expect to see this happen soon.
Delicate Balance
Photographers who produce both editorial and corporate/advertising images face some
difficult
decisions. They can
probably earn a lot more from
advertising images, if they can get them in a catalog. But, if the catalog agency
isn't doing a
decent job of selling the
rest of their work to the
textbook and editorial market, will they really earn more from a handful of catalog
images than
they could from the rest
of their file if it were not
allowed to lie dormant? It might be better to be with one or several good editorial
agencies.
The answer hinges on the volume of the photographer's work that fits the editorial
market, and the
number of images he or
she can get in the catalog.
Unfortunately, the photographer usually has to make a long term commitment to an agency
before
knowing how many images
might be accepted into a
catalog.
The ideal solution for the photographer would be to put the best images in a catalog
with major
distribution (150,000 to
200,000 copies) and place the
rest with niche agencies that maintains a file of transparencies and are known by the
buyers for
their depth of coverage
of particular subjects and the
quality of their research.
But, seldom are the major agencies willing to accept such an arrangement. If they are
willing to
work on a non-exclusive
basis at all, agents usually
tell photographers that they give preference to those they represent exclusively (which
is
reasonable). However, some
photographers who have been with
an agency on a non-exclusive basis, and later go exclusive with the agency in an effort
to increase
their catalog
exposure, have discovered that they
get fewer images in the catalog instead of more. There are no guarantees.
Many agencies want photographers who are willing to shoot under their guidance in order
to develop
a balanced presentation
in a variety of categories
for their next catalog. This is all well and good if, when the photographer does what
he or she is
told, the agency then
promotes the images produced.
Too often the photographer shoots exactly what the agent asks, the way the agency
wanted it shot,
and then discovers after
committing time and money to
the project that the image still isn't accepted for the catalog.
In the past, a major production shooter might work for one or two months to produce a
set of images
for a catalog and
spent $20,000 to $30,000 on
production costs. For this effort the photographer might have ended up with 20 to 30
images in the
catalog.
Now, due to competition for space, the photographer may expend the same effort in time,
and even
more money, and instead
of 20 to 30 images in the
catalog get only 4 or 5. The chances of the photographer making a profit at this point
have been
severely diminished.
In terms of taking guidance and instruction from the agency, the photographer is
functioning almost
as a staffer on assignment, except that he or she is not paid for the work. The next
step for the
photographer in an effort to earn a living is to become a staff photographer
for the agency, or work on a day rate basis to
produce images that the agency will own outright. This is happening with a few
photographers
shooting for the RF
producers and to a small degree with
some of the major stock agencies.
Part of the problem is that there are too many good photographers producing images.
There are many
more "catalog quality"
images available than there
are clients to buy them.
Stock photographers need to (1) limit their production or (2) find better ways to
maximize the
sales of the images they
produce, or (3) look to other
areas of photography in which to concentrate.
They also need to recognize that in today's marketing environment they will have to
incur some
marketing cost as well as
production costs, in order to
sell images. They have to find a balance where their total income exceeds costs.
Photographers need to recognize that the editing philosophies at some agencies are
changing and
carefully assess these
changes. In most cases photographers can easily determine the amount of usage of their
images from
each file because they are told
which images make the select file. They can then track sales of select and non-select
images.
The photographer needs to decide whether it is better to adjust his or her shooting
style to fit
the new demands of the
agency, or find a new source for his or her material. Remember, only some agencies,
not all, are
making these changes.
©1998 SELLING STOCK
The above copyrighted article(s) are for the sole use of Selling Stock subscribers and may
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the written permission of Jim Pickerell, the editor. For subscription information contact:
Selling Stock 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720,
fax 301-309-0941, e-mail: jim@chd.com.