Agency Closures: What Went Wrong?

Posted on 2/23/2009 by Jim Pickerell | Printable Version | Comments (1)

Recently, several stock agencies have found it necessary to discontinue operations. When that happens, photographer royalties often go unpaid. What went wrong for these firms and their photographers?

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Copyright © 2009 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.

Comments

Leslie Hughes Posted Feb 23, 2009
Jim - It is great that you are putting this out there and I agree with what you outline. It is necessary, however, to add that it is not really large agency growth, e-Commerce of even over supply that truly causes an agency to go out of business. It is the inability to supply a product to a customer who wants it.

You are right that it is harder to compete with the mega-agencies. But frankly they don't always do a good job either. Whether agency or photographer, differentiating what one does is key to convince a customer to buy and most don't. remember when Photodisc can in and offered their new pricing package called Royalty Free? That was differentiation. It was really nothing more than a new way to package and market commercial content. Remember when Tony Stone dropped research fees? Getty has deep file and nearly everything one could want - hard to not have them on the list. Most agencies can't say why a customer should come to buy from them as opposed to another. Better content doesn't cut it as everyone must have good content these days.

As for e-Commerce - it is tough for those still with analog collections. I have done evaluations for many and it holds pretty firm that a fraction of the analog usually is worth digitizing though so there is a balance that can be struck between the past and go forward. the issue should be going forward for agencies who want to remain competitive unless of course they are a historical agency. And oversupply - well you are right - which usually means a couple of things, there will be a shake out in supply in the future and creators need to focus their work and specialize. If we are truly talking about the agencies - then the issue is not oversupply, It is the skill in editing, selecting the partners to represent, and managing what is offered. It is really the ability to compete in an abundant market.

Bottom line is that there are only three ways to compete in any business - on price, on quality or on service. Today, all agencies must have quality to be sustainable. You better be in microstock if you are going to compete on price, and service and specialty differentiation points are key otherwise. This is a highly competitive market as you have pointed out and photographers and agencies both have a tough road ahead to distinguish themselves. But it does not have to be doom and gloom for those that plan appropriately.

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