Why has the photo market changed?

Pino Granata has an interesting (even if depressing) article on the problems of the stock photo market. He notes that ten years ago, when printed catalogues were still the standard way to sell images, things were better and wonders why…

How come that everybody at that time was doing very good while today we need to fight to stay alive? [...] I’m not saying we should go back in printing catalogues again, but the fact remains that until 10 years ago things were OK and now it’s NOT OK anymore.

I am well aware of Pino’s decades of experience in the photo business, so I think it is just a rhetorical question from him. Still, here’s my opinion: it’s just a matter of supply and demand.

Grand Canyon at Sunset ©2003 by Mark Zanzig/zettpress
Mark Zanzig/zettpress

Supply has increased massively by the introduction of high-quality digital photography to the mass market.

Ten years ago, you needed a skilled photographer with expensive equipment and experience to shoot a technically OK photo. Only few consumers could afford to become professionals – the learning process simply took too long, and it was way too expensive. Just think about a superb sunset at the Grand Canyon. It was virtually impossible for the average Joe to create decent shots in commercial quality. Usually their shots were flawed, hampered by bad lenses, insufficient exposures, grainy consumer grade film material, or mediocre prints.

Heck, only a small fraction of photographers used slide films, the defacto standard for professional photos at that time. Even fewer used high-end slide films, and only a very small portion had access to slide scanners that could reproduce their slides in high quality (which was done by the photo agencies anyway). At that time, the market was clearly separated into amateurs/consumers and semi-professionals/professionals, and the role of the photographer was to take a good photo, not to worry about its distribution. If an amateur wanted to cross the border and join the professionals, it meant a substantial investment into equipment and film material, before even coming close to professional results.

Fast forward to 2008: today, the typical digital point-and-shoot camera has 7 million pixels or more, i.e. almost the data you would get from a 100 ASA slide film. That P&S camera also comes with an image stabilizer and a bright display allowing immediate review. The camera costs about US$140. Throw in a 2 GB memory card for hundreds of images, and you end up with a total cost of $150. This camera will be able to do shots that are technically good enough for most newspapers and entry-level magazines. (Mind you, I’m not talking about the ablity of the camera to help the photographer in bringing home the shots of, say, a stressful press conference. I am just talking about the technical basics here.)

If you want substantially better quality, you may go for Canon’s brand new Digital Rebel XSi, a 12MP SLR camera, which can produce images that are technically suitable for magazines. This will set you back just US$900 with a kit lens.

Grand Canyon at Sunset ©2003 by Mark Zanzig/zettpress
Mark Zanzig/zettpress

In former times, consumers would just use their cameras to take nice photos for their photo albums. Today they share their photos on the Internet in global communities, for example on Flickr. Because sharing is such a joy for them, they often assign free or cheap licences to the photos, basically giving away their photos for free. And they enjoy it very much when a newspaper or a magazine asks to publish their photos.

At the time of writing, a search on Flickr for sunset grand canyon yields roughly 9,500 photos, of which 180 carry a CC BY licence that allows the user to freely use the photo for any kind of publication as long as attribution is given. Some of these photos are surprisingly good, some of them even exceptional. The border between amateurs and professionals is blurring, if not disappearing.

In short: the supply of good images has skyrocketed over the past few years, and this has significantly reduced the overall price.

Demand for high-quality photos has silently decreased at the same time. As Internet analyst Henry Blodget points out, newspapers and magazines are bound for extinction. Unfortunately, these media were the typical buyers of expensive high-end photos.

Not so any more! Traditional media react to their changing business with a (desperate) struggle to decrease their cost, for example by using free or cheap images from the Internet, or by using photos submitted by their readers.

It’s just logical – why would publishers spend money to licence high-end pictures from traditional stock photo agencies, when they can get the same (or similar) quality from cheaper sources? Publishers need to generate profit in the first place. They run businesses.

The dry language of a 10-K form puts it like this:

In 2007, we saw continued change in the competitive dynamics in the stock photography market. Our customers have increasing access to, and awareness of, a variety of imagery sources on the Internet.

Yep, that’s Getty Images’ 10-K form, and probably they wanted to say “a variety of cheaper imagery sources on the Internet”. After all, Getty Images still has some of the finest photos around (and people would surely use their images if only they were cheaper). Getty Images could not control such massive market dynamics, and so they were finally sold for $2.1B (which is still a good price for the seller).

An increased supply faces a reduced demand. This translates to “dropping prices” in any market, and the photo market is not different. The photographic ecosystem has been thrown out of whack by digitalization, globalization, and the Internet. In addition, the pressure on traditional publishers to keep their profit margin has reduced the demand for expensive images. The former balance of supply and demand (on a high price level) is quickly seeking a new balance (on a much lower price level).

And that’s just the beginning. Be prepared for more changes. The next battlefield will be the fight between video and photo. Or why do you think that Canon is so keen on getting the Live View function into their professional line, e.g. into the EOS 1D mark III?

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