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Tuesday, July 04, 2006

How many images before you finally turn a profit?

When photographers consider setting up their businesses online, the natural curiosity is wondering how many images do they need before the sales start trickling in. Then they consider their particular images, and wonder what the size of the market is (hence, the "opportunity" to make money). And, finally, if they believe they have "enough" images, and the market opportunity exists, what's the best way to market those images to the target buyer.

All this is demonstrated by an email I got from someone, which is almost identical to those I get on a fairly regular basis:

1) What gross sales and net revenues are possible from a well run, part-time web based stock photo business with a single photographer supplying images?

2) How many images do you feel are the minimum to make available in order to be taken seriously and make a profit?

3) What is your most effective marketing technique and why?

4)I'm considering focusing the scope of my stock offerings to very local images- Bucks County PA, because that's where I live and I've been unable to find much available stock of the area. I've been accumulating local publications that I think might be potential customers. Can you offer some advice on how to best approach them/market to them?

All of these questions are good, but they are all based on the faulty premise that a photo business's success is based primarily on the photos, either the quantity of them, or their quality.

What makes a photo business successful is more based on other factors. For example, your main subject matter can be very specific, or very broad. How well you do will be contingent on how well you know the business of the industry you're shooting for, or how well you know "business issues" in general.

If you shoot specific subjects, like horses, or fashion, or food, or sports, or Bucks County, Pennsylvania, your revenue is going to be based in large part by how well positioned you are with the media companies that buy such specialized images within any of these industries. Those who are well-connected, know what the market is like, and how those businesses are run. They also understand how photography fits into those business models, and can package a marketing/sales plan that is "industry-friendly." If you have no such contacts, or don't know the business-end of that target industry, your likelihood of success will be pretty close to nil, regardless of the quantity or quality of your images. It is highly unlikely that those who need specialized images of a niche area browse the web for stock images from random photographers' websites. It may happen, but it won't amount to much sales.

On the other extreme, if you shoot really mediocre pictures of everyday things, you could hypothetically build a very profitable business by pricing them for a few dollars each and bundling hundreds or thousands of them together in royalty-free compilations for several hundred dollars. Here, you don't even need to target media companies--the general public is good enough.

Let's say you have 5000 images that you sell for $200, and you have no strings attached to the use of those images: no additional royalties, and no limitations on use. If you manage to sell 1000 of these compilations over the course of a year, that's $200,000. That ain't bad. But it also isn't that easy, despite how simply I described it, because setting up a business infrastructure to do this sort of thing requires some degree of business sense. While not difficult, it isn't something you just throw together in your spare time unless you've had past experience doing it.

Above, I illustrated two simple business models of many. Regardless of which model you choose, your sales, marketing and distribution methods must dovetail with the type of images you shoot and the target market/buyer, or you'll fail miserably. That is, you aren't likely to combine models that don't mix. For example, if you shoot fashion, providing hundreds of images on a royalty-free basis may get you a few buyers a year, simply out of random luck. But the market for those types of images is so small, that it's unlikely going to ever amount to a profitable business. Those who really acquire images like that, do so from well-known photographers (where the pictures are of well-known models). Conversely, trying to sell rights-managed images, where each image is priced for several hundred dollars is likely to only work well if the images are hard to come by, or your supply of really high quality images is so vast, that your lucky number just happens to come up more often. (That'd be like buying thousands of lottery tickets, and betting on the fact that your luck will outweigh the odds against you.) But, this isn't necessarily a good business model if your images are of common things found copiously on the net already.

Thus, an open-ended question like, "what kind of revenues are possible?", can't be answered without more information about who you are your past experiences, the type of images, the target market, the distribution method, and so on.

I can say that anyone with business sense knows not to ask such questions, because they would know business issues well enough to know such answers aren't that simple. Which implies that those who do ask, probably aren't going to be making huge sums of money anytime soon because they simply lack business sense.

Nevertheless, I'll bet you're still looking at the above two examples and thinking, "I'll take my shot at the $200 per bundle" business model. Seems simple enough, right? But then my favorite quote comes in: "If it were that easy, anyone could do it." The reality is that achieving such a thing is more and more difficult these days because so many people are trying. In fact, the market is so saturated with images, that getting noticed is just darn near impossible.

This brings in other business skills like marketing and distribution. For example, do you invest in online advertising (such as Google and yahoo ads)? When you look into that, you also see that everyone's doing that, too, so the cost of advertising may be a lot more than you thought, which has a direct effect on the traffic your site gets, digging directly into your bottom line. If you photograph a narrow range of subjects, then your audience will be smaller, and with it, lower revenues. If you're well-known in that industry, this could work very well to your favor, but that brings us full circle to having good business knowledge of your main area of photography.

This further demonstrates how all these business issues tie so closely together, which points back to what I said in the beginning: selling images in any context is less about photography than it is about having "business sense," and knowing how to apply it to your product. If you think about the millions of photo-enthusiasts like you who browse photo discussion forums seeking formulas for making money on the net, then you should realize that if any advice that people were giving actually worked, these millions of people would be making lots of money. Because they aren't, one can only surmise that there are no such formulas or simplistic bits of advice.

Success in the photo business is more about how well you know how to run a business in general. Accordingly, if you think of your photographs as widgets, not works of art, you're well on your way to better business thinking.

Further reading is found here.