The stock photography industry has followed a classic business cycle:
- initial idea (1920s)
- long, slow early growth (1920-1980)
- quickly growing success (1980-1995)
- recognition of the “new, profitable” business (1990-1995)
- influx of many suppliers (1995-2005)
- over-saturation of market (2000-current)
- industry upheaval and chaos (2000-current)
- industry re-establishes – survivors continue in a redesigned industry (coming soon)
This cycle is like a wave slowly building momentum across an ocean, quickly gaining power and crashing into a new form. The wave cycle is not limited to stock photography – many other industries have gone through the cycle. The recent US real estate crisis was a prime example. The high tech bubble mirrored a similar cycle.
Riding the stock wave
The cycle is not a new phenomenon. The important thing to do in any business is evaluate what part of the cycle your industry falls. Too early and you have a long lead time for significant returns. Too late and you are caught in the chaos of an over-saturated market.
What to do?
Look ahead. What’s the next big thing? Where is the untapped market for photos?
As an example, in 2000 Bruce Livingstone developed a new idea in stock photography. He recognized there were thousands of talented hobby photographers who earned decent livings doing something else. This was key. Bruce started a new era of stock photography whereby he tapped into a vast pool of talent that did not require significant financial payment – they already earned a living as nurses, plumbers or lawyers.
He seized the idea that these amateur photographers could be happily paid in bragging rights – “My photography is so good it is being used commercially…” istockphoto.com pays most contributors a financial pittance – 20% or 40 cents to $3 per sale – plus bragging rights.
The success of istock has it’s roots in:
- volume (lots of talented, happy, financially stable amateur photographers contributing)
- low commission expenses (high gross margins)
- a huge market of photography buyers looking for budget prices!
It was brilliant! In less than 6 years istockphoto.com was sold to Getty for US$50million. That’s a pretty nice photo sale for Bruce and any partners.
Many photographers have looked to diversify into other agencies – hoping to stack the odds in their favour. Some look to the fine art world. Others, myself included, have steered photo businesses to include other photo work or photo related businesses as well as stock. Colin Rowe, a veteran assignment photographer, saw the need for a digital archiving service for large corporate and government clients and launched Archi-Media.ca. His business does well and is more diversified than ever.
Looking for the wave
Stock photographers who started in the 1980’s have done well. Stock photographers entering the traditional stock market recently will have to swim very, very hard to survive.
Be on the lookout. Scan the horizon. Catch a wave before it surges and you can surf a nice ride.