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STOCKPHOTOFINDER.COM
October 26, 2004
Photographers and small stock agencies have a new option to consider as they attempt to compete with Getty and Corbis. Some will call StockPhotoFinder.com
( www.stockphotofinder.com )
(SPF) a portal, but it is really more of a search engine - think Google - than a portal because, unlike most existing photography portals, it does not take any percentage of the license fee paid for images found by using the site.
For the customer looking for images, SPF offers some tremendous advantages over Google in that all the images are provided by pre-qualified image sellers. Google can be a nightmare for professional users when they want to clear rights and get a high resolution file of images they find. In addition, searchers usually have to wade through lots of low quality images in order to find anything usable. Users of SPF, on the other hand, can be assured that every image they find is being offered by a professional image seller, and that it will be relatively easy to determine a license fee and quickly obtain a high resolution file.
In addition many of the professional images in small online databases are not easy to find currently, unless the customer knows the sellers URL. Now it will be possible to research hundreds of different photo sources by entering keywords once on the SPF site.
SPF launched last week with 113,000 images and based on the initial enthusiasm for the offering expects to have over 1 million images before the end of the year.
Unlike most portals that handle pricing and delivery for a percentage of the fee, when buyers click on SPF thumbnails they are taken immediately to the supplier's web site and the supplier controls the transaction from that point on. The supplier keeps 100% of the fee negotiated.
Consequently, every provider must have a keyword searchable web site and be able to immediately respond to any buyer's request during normal business hours in order to participate on this search engine. This may limit the participation of some photographers that do not have an office that is fully staffed at all times, but this requirement is necessary in order to insure that customers receive that kind of professional service they expect in today's fast paced digital environment. Every provider will be pre-qualified by StockPhotoFinder.com. Suppliers will not be required to offer online pricing or immediate downloads of high resolution files, although obviously both would be an advantage. An acceptable option for RM suppliers is to store hi-res images offline and deliver them by FTP once a fee has been negotiated.
Image providers must either be the copyright holder, or an agency that is the first representative of the copyright holder. This is necessary to insure that multiple agencies are not posting the same image. One thing that could complicate the image ingest procedure is that many small suppliers currently represent the same images from a given photographer on a non-exclusive basis. In an effort to be customer friendly and not offer multiples of the same image on the site SPF will have to develop a procedure to determine if any image they are about to add is already on the site from another provider. This is further complicated if a photographer's agent is the first to put an image on the site and later the photographer decides to build his own site and upload some of the same images. Randy Taylor, CEO of StockPhotoFinder, does not expect this to be a significant problem.
SPF does offer a Similars Search feature that uses proprietary technology to find similars to any image selected. It may be possible to use this same visual search technology to locate exact matches of images during the ingest process.
The only cost to the supplier is a very minimal annual Marketing Participation fee based on the number of images supplied. This is payable when a supplier signs an agreement for service, but those who sign on in 2004 will not be charged any additional fee until January 1, 2006. The initial fees are extremely low (See listing below), but it should be noted that "future participation or renewals are subject to change."
Annual Marketing Participation Fees
Images Online
|
Marketing Fee
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1 to 1,000
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$299
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1,000 to 5,000
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$750
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5,000 to 25,000
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$1,000
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25,000 to 50,000
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$1,500
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50,000 to 100,000
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$2,000
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100,000 to 250,000
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$3,500
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250,000 to 500,000
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$6,000
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over 500,000
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call for price
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For many portals the procedure to ingest new images has been a problem. Once an agreement has been signed StockPhotoFinder can capture the thumbnail images and keywords from the supplier's web site making it unnecessary to specially prepare submission for this search engine. All the supplier is required to provide is a database that lists image file numbers and all the keywords attached to each image file. Then SPF goes to the image supplier's web site and imports the thumbnails they need for their search engine. This initial import goes very quickly. Recently, SPF imported 80,000 thumbnails from one provider in 15 minutes.
Another feature of interest to buyers is that SPF offers full function lightboxes that can save images from other web sites. These aggregated lightboxes may be emailed to others. The buyer is able to drag the boundaries of the search results window on the active lightbox if he or she prefers to work simultaneously with more than one browser.
SPF will also provide an online process that makes it possible for the image provider to see the number of images that have been viewed by the customer as enlarged previews on the providers site. The specific image number reviewed will not be provided.
Preferred Vendors
Once you get this far - if you're a suppler - you've got to say, "This is too good to be true. They are offering so much for so little. Can it work???"
The answer to that question, I believe, is in their Preferred Vendor strategy. As more consolidation in the industry on both the buyer and seller side has taken place more and more companies are turning to Preferred Vendor relationships as a way of establishing prices for usage that will save them money and time. Some medium sized sellers of RM imagery estimate that as much of 50% of their Editorial sales of single images result from Preferred Vendor relationships or some type of relationship where fees for usage are agreed upon in advance of selecting images. I estimate that the revenue worldwide from Editorial sales is in the range of $600 million annually.
SPF intends to make a concerted effort to license their software to large organizations that are heavy image users and have "Preferred Vendor" relationships with certain stock agencies, and in some cases individual photographers. The vast majority of the revenue SPF will need to operate their system and market their search engine must come from such relationships, not from the minimal fees image suppliers pay.
A little explanation of companies that use Preferred Vendors is in order. Many of these companies are in the publishing business and they tend to use large quantities of imagery.
Much of what they need is very specific and not generic. They often need very good caption information and they need to be able to talk to people who really know their subject matter. Thus, they often like to deal with small, specialist providers.
On the other hand, because they are using so many images and image use fees are not being passed through to a client, but directly affect the company's bottom line, they like to negotiate fees upfront that will hold for a year or two for all the images they buy. In contrast most sales to graphic design firms and advertising agencies are being passed through to a client as part of an overall package and as a consequence there may be less pressure on the buyer to get the absolute lowest price.
Consequently, publishers call in suppliers that they use regularly or would like to use and present them with a fee schedule that they would like to achieve for the next year. The suppliers can make counter offers - and some do - and then the publisher develops a list of Preferred Vendors for the next year.
To be more specific, a negotiation may go like this. The standard rate in the industry for a particular use may be $200. The company may say that they would hope to achieve a rate of $100 for that use in the future. Given the likely volume that will be generated some suppliers will agree to $100, others will offer $115, $125, $140 etc. and some may say no we want to negotiate each usage based on the image and the usage. Suppliers that insist on negotiating each time will probably be dropped because the publisher doesn't want to deal with that. Some of the higher figures may be dropped. Then the publisher prepares a list for its researchers and tells them, "We want you to buy as many images as possible from those who are offering us the best price. Only after you've exhausted everything they have can you go to someone who is charging a higher price and only after you've explored everything the preferred vendors have can you go outside the Preferred Vendor Network." Thus, the chance of anyone outside the network making a sale is slim.
So how does SPF fit in? Researchers may now have to go to many different sites to do their research. This is time consuming and ends up costing the publisher money. Some publishers like Pearson Learning have set up their own search engine, obtained thumbnails and in some cases hi-res images from preferred suppliers, ingested them into their system so their researchers can search one database. But this is costly to maintain. Many of the publishers don't have in-house search systems but can see the advantage of having an outside supplier provide this service and keep it up to date.
Big suppliers like Getty and Corbis will provide publishers with custom software that lets them search their databases, but that doesn't necessarily serve the needs of the publisher because it doesn't give them access to images they would like to see from all the small specialist on their Preferred Vendor list.
SPF is prepared to take a publisher's Preferred Vendor list, go to each supplier, and create a custom database for that publisher that just shows the images of the companies with whom that publisher has Preferred Vendor agreements. Once those images are being handled by SPF the supplier has the option of seeking other Preferred Vendor relationships and servicing all the companies easily, making images available to all photo buyers through SPF's main site, or only allowing the one selected publisher to view their offering.
This service should be worth a fair amount of money to most publishers because it will make their research departments much more efficient and SPF is betting that will be the case.
It should also be noted that SPF hopes to draw customers from the commercial and advertising side of the business as well, and not limit their efforts to the editorial market. But it seems to me that they will need to generate significant cash from licensing their software in order to have the capital necessary to do the promotions to get the commercial/creative/advertising buyers to begin to look at their site.
Simplifying RM Pricing
Another direction in which the industry has been moving is one of simplified RM pricing.
For many organizations that use lots of images, one of the ways to simplify the negotiating process is to develop a list of suppliers who will agree to certain pre-negotiated rates. SPF will be able to facilitate Preferred Vendor arrangements by notifying its suppliers of the interest of one or more of its customers to enter into pre-negotiated fee arrangements. This could be beneficial, not only to image suppliers, but also to buyers.
One of the problems with the current system of marketing is that many of the images Editorial buyers want to use have been withdrawn from the marketplace as a result of the focus on the generic high end of the business. SPF addresses this problem and provides an opportunity seller to show images that no other large database will accept, and for buyers to find unique images of subjects that are not in high demand and which can not be found anywhere else.
Foreign Suppliers
Initially, the SPF site is primarily interested in servicing customers within North America, although obviously anyone anywhere in the world will be able to access this site. They are exploring setting up a sister site in the UK.
Since customers will be going directly to the image suppliers for negotiations and delivery, the suppliers will probably need to be in nearly the same times zones in order to adequately service customers. Foreign agencies that offer online pricing of RM and unassisted hi-res downloads may be able to participate because there will be relatively little need for direct communication with the customer.
In all likelihood few foreign photographers will be able to participate because they will not be able to respond to customer requests in a timely manner. The lack of such foreign content on the site is likely to be a weakness in the offering. One possible solution is for European and Asian photographers to make arrangements for an agent to handle negotiations and delivery for them and for U.S. photographers to set up similar sub-agency agreement with someone in the UK to deal with that market. SPF plans to offer referrals or suggestions to photographers of companies that are interested in fulfilling this role.
Concerns/Reservations
As I see it, the major concern in this offering is whether the revenue from licensing the software to publishers will be significant enough to cover operating costs and allow for significant marketing. SPF will also sell advertising space on the site, but that is very subtle and it is difficult to estimate how much revenue that might generate.
If there isn't sufficient revenue for aggressive promotion there will probably be very few sales. On the other hand the investment for the supplier is so low that those who already have a keyword searchable web site can hardly afford not to give it a try.
Feedback:
From: Scott Barrow
I could get a lot more excited about this as a product if it were for independent sellers only. Add in all the agencies, and once again you have a giant site to slog through with more of the same images that they have come to this sight to avoid. As you know, I loved Direct Stock. A sight like this for independents would be great.
Jim's Comment:
Four things to consider.
Many independents will not be able to qualify for this site as they will not have a keyword searchable site, or have full time help available from 9:00 to 5:00 to handle negotiations and delivery. Thus, these people will have to go to some agency that supplies these services in order to get on StockPhotoFinder.com.
A larger and larger percentage of the buyers seem to only be going to large sites with a broad cross section of imagery. For the most part they don't want to take the time to search out small sites. Remember Direct Stock (Solus) couldn't generate enough traffic to make it work. Thus, the only way to get things seen is to be part of a large site, not a small specialized site.
Visual Search is going to make it much easier for buyers to search through a large number of images to find what they need. While only fully functional on a small number of sites at present, it won't be long before going through a return of a few thousand images that might result from a keyword search will be much less burdensome than it is today.
The more people showing your images the better the chance of making a sale. This option is so inexpensive that anyone with a keyword searchable site can hardly afford not to try it out.