So finally, I’m hearing pure stock shooters considering abandoning the business. They are no longer able to sustain their business. At least one stock producer told me he cannot cut costs any more, and is looking for other options. So here we are in 2008. I can here the hiss from the deflating bubble. Now that money in general is getting harder to come by, we will see less companies and photographers willing to invest in this business. But there is still a market for stock photos. So maybe “crash” is too harsh a word - How about a market “correction”. After the Internet bubble burst, we were left with companies who had real businesses - that is, were profitable or on track to become profitable. The fact is there are several stock photo companies that are still profitable. The companies who survive the next couple of years will do ok - but the shine has worn off the industry. Whoever is left, is going to have to work harder for their share.

The supply of imagery will have to tighten, before things stabilize. Getty has already taken steps to reduce the number of images in their database. They have raised the standard on the images they are selecting, which naturally lowers the number of images accepted as well as raising the quality. Getty can afford to do this even if they lose some contributors. They already get more imagery than they need. Even iStockphoto (and other microstock sites) can afford to tighten their standards because of the large number of images they receive. Photographers will no longer be able to keep their revenues up by increasing their production. The market is becoming saturated and won’t continue to absorb them - without further price erosion. So the stock photo market is in a similar state as the real estate market. They both are sitting on a lot of inventory, and it will take some time to clear it out. I’m sure in both cases there will be some who will pick up some bargains. The question is… How long until inventories are at reasonable levels? Will they ever? I don’t know… we’ll have to wait and see. But of course there are other issues besides supply.

The fact is stock photos now exist in a digital world. Current economic theory says, the price of a product competing in a perfectly competitive marketplace will be driven to its marginal cost. The marginal cost of a digital file is pretty close to zero. It can be reproduced an unlimited number of times. This is called a non-scarce good. (see this Techdirt article) Is this applicable to stock photography? Will the markets needs be filled by so-called crowd sourcing. iStockphoto is the poster child of this movement- what are the long term effects of this trend. The fact is, there is still a lot of room for innovation. We’ll have to take a look at some of these issues in a future article.

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Filed under: Uncategorized, Corbis, Getty, Jupiter Images, Photography business, stock photography