2009 Year in Review: Content Remains King
As I've preached since the dawn of my writings on the business of photography, the best way to make money on the web is to create as much content as possible. Having more inventory to sell is only a part of the benefitindeed, a much smaller role than people may think in some cases, as I'll articulate shortly. The main reason content is so important is because it's the nucleus of all other revenue sources and business activity. Content plays an important role for search engines, which not only allow people to find you, but provides other sites with links. As links build, your search rankings increase, which increases traffic, which feed these various revenue streams. I discuss this principle in general in my chapter, Web-based Photography Business, which is part of my series of photo business books. (I discuss 2009's numbers more specifically in the next article in this series.)
As a general business model, I follow my own advice to others: Almost everything you do should ultimately result in new, monetizable content. Once you have it, you can make money with it in perpetuity, with very little (if any) additional overhead or resources. Outside of some initial short-term costs and overhead, your business can scale up to virtually any size by merely adding new content. Whatever short-term income or expense that may be involved in acquiring new content, it should be regarded as part of your investment in the future. (That is, the short term pay or income is less important as the long-term potential.) I'll get back to this subject shortly.
Though people monetize their content in different ways, I happen to choose to be the exclusive licensor of my own content. That is, I do not use stock agencies or other distribution models. I usually recommend this approach to people as a default assumption when considering entering into the photo industry, but one can certainly leverage the sales resources of agencies, if done properly from the outset.
Given that I have over 60,000 images in my online archives now, and the manner in which content can be leveraged so easily, it may come as a big surprise to learn that licensing of still photography only represented 5.8% of my total revenue for 2009, compared to 16.9% in 2008. But don't take this bad news.
First, still photography (the majority of the content on my website) is what I call the "gateway drug" for my clients. People discover my site primarily because of my still images, and end up making more lucrative transactions later. The fact that still imagery licensing has dropped as a percentage of total revenue is more due to the much larger increases in other, more lucrative revenue streams (discussed later). This further underscores the importance of having a robust and diverse business model that can survive (and even benefit from) shifts in the economy. In this context, the recession may have caused some people to spend less, but it also caused others to shift their spending towards me. Those "others" is a much larger population, even though each spends less on a per-transaction basis.
For example, my fine-art sales represented 19.5% of my revenue, up from 12.7% in 2008. This can be entirely explained by the economy and shifting demographics. Buyers on my site in 2008 and prior had been low-end art collectors and enthusiasts (see Selling Photography Prints), whose average purchase was $232 per order. By contrast, 2009 saw the average drop to $188 per order, but I got a lot more orders. Though I may have lost art collectors, they were replaced by high-end consumers were who shifted their spending from more expensive gifts (such as jewelry, etc.) to photography.
In light of my prior blog articles on the principles of economics for photographers, assignments are also extremely critical to the acquisition of content. Many photographers scoff at the notion of accepting "low pay" for assignments, or even doing them for free, but this is extremely short-sighted and self-defeating. Acquisition of extremely valuable imagery is key to long-term revenue generation, and assignments are pivotal to that objective. If you choose your assignments well, then the "fee" you chargedbe it a lot or a littleis, and should represent a very small proportion of the revenue you yield from the photos you just took. In other words, if you're only revenue form an assignment is the assignment fee, you have an outdated business model; you simply cannot compete in today's modern internet-based economy, especially when millions of people are taking pictures themselves. That assignment rates go down may be an unfortunate side-effect of this growth, but it is merely a blip on the screen when it comes to a mature photo business model.
I'm not dismissing the potential income from an assignment; I never leave money on the table. If the client is well-endowed and I can negotiate higher fees, I do so. Mind you, negotiation is an entirely different subject, which I discuss in greater length here and here. But negotiation is only about optimizing what you can get, and should not be confused with whether you should take an assignment (regardless of price). In short, in mature business and career planning, assignments should be regarded as one-off payments for opportunities to acquire useful images that last into the future. When you amortize your assignment fees over the course of time, it should be negligible. (There are assignments I shot in 1996 that still generate revenue.)
Assignments represented 12.1% of my 2009 revenue, up from 4% in 2008. This substantial increase is due to both an increase in the number of assignments I took, and the amount I charge per assignment. As I said, I don't leave money on the table, despite the fact that I face the same market conditions as everyone elsenamely, attempts by other photographers to under-bid me, even offering to shoot for free.
So, why would my clients pay me a higher rate than they used to, despite the increased competition? Because I provide something that cannot be supplanted by the lowest bidder: a track record. My experience, quality, reliability, and maturity in the industry is important to clients that cannot afford to risk getting a photographer to shoot something for free, yet end up with images they can't use, or other bad side effects of working with an inexperienced photographer.
I also choose clients wisely. I don't seek or need clients who can and should be serviced by emerging photographers. My motto is, "real clients don't need newbies." (Any photographer that complains about being harmed by newbies should have moved up and out long ago into the next tier of their profession.)
People often ask how I come up with my assignment fees. It's actually a very simple calculus of two factors: the client's financial condition, and the "value" of the images I can get. Remember, this doesn't govern whether I take an assignment, just what I charge for it once I deem it worthwhile. I emphatically dismiss all of the fee calculators that you see in books and on blogs. For example, most pros will say you should factor in your "costs" for any given assignment into your fee, whereas I feel costs are entirely irrelevant. I am never concerned with whether I'm making a profit for any given assignment becauserememberthe true value of any given job is the longer-term potential with the images. Thinking about purely the fees for an assignment prevents you from focusing on career growth.
While I do generate good revenue from assignments, I will still shoot some for free. Last year I'd done two very important assignments, one was for free, and for another, I spent $3200 of my own money to fulfill the job. In this case, I knew that the imagery itself was invaluable. (And indeed it has already paid for itself in the aftermarket.) Better still, once my clients saw the results of the work, I not only sold them additional content that they didn't anticipate, but I got follow-on work to do exactly the same thing at twice my normal billing rate.
Over the past year, I've added about 30,000-40,000 new images, all
entirely from assignments. These include:
- Cambodia (Siem Reap, Cambodia)
- Laos (Southeast Asia)
- Croatia (Europe)
- Puglia (Apuglia) (The 'Heel' of Italy)
- Jerusalem (Israel)
- Paris, France
- Oregon (USA)
- The State of Idaho (USA)
Not included in this list are projects that I haven't yet gotten online, plus thousands of images added to existing galleries, mostly in and around California, such as Marin County (California), San Francisco, California, up and down the central valley, the The California Coast (USA) to the The Sierras (California). I've also expanded my topical pages, such as Doors and Windows, Stairs and Steps, Random Black and White Photographs, and other topics.
As noted above, and in keeping with Truism #4 of my treatise, the Photography Business (1998), my latest expansion into new revenue resources includes video. As you know, video online has been increasing, and the technology required to produce quality video has come down. This has given many people an opportunity to expand their licensing potential in ways they never could before. I'm encroaching into the video turf much the same way consumers have encroached on the pro photography turf when digital cameras and the internet became inexpensive and accessible back in the 1990s.
Prior to 2009, I licensed no video footage. Yet it instantly grew to represent 12.2% of my 2009 revenue. Most of it is time-lapse photography, which I'd produced mostly as a curiosity that I stumbled into when I discovered my camera's cable release had an interval timer setting.
Most surprising about my video revenue is the fact that I have never promoted or solicited my videos. In fact, aside from my blog comments, I never even made it known that I had video content. I hadn't upgraded or enhanced my site in any way to host or license video content, and the only access to it is this page, which is merely a collection of links directly to my YouTube channel.
Needless to say, the natural viral marketing effect of YouTube is self-evident.
One then asks: if my site doesn't support it, and I can't license it through YouTube, how am I conducting transactions? Email! This is exactly how my stock photo business started. From 1996 to 2003, I had never had a shopping cartbuyers simply emailed me and asked to license images, and they'd send me a check.
Of course, that wasn't that unusual back thenfew stock photo sites existed, let alone had automated shopping/purchasing systems, so buyers accepted it more readily back then. Times are different now, and so are expectations. All the more reason why I'm as surprised by the degree of video licensing I've done using this archaic model.
That said, I expect to integrate video licensing on my site soon enough.
It should be noted that one reason why my time-lapse footage commands such a high price is because of the way I shoot it. Rather than use a video camera, I use my conventional still cameras and capture each frame in full resolution: 5600 pixels wide. I then string them together into video sequences using either iMovie (for presentation onto YouTube) or Final Cut Express to retain the full ultra-high-resolution. In fact, these clips are so high-res, buyers can pan and zoom within the sequences down to ¼ of the original footage, and still retain enough resolution to achieve 1920 HD. (And even then, most video buyers don't really need 1920 anyway.)
None of this is possible using conventional video cameras, nor is it offered by other video-production service providers. And of course, the quality is much higher than video footage because night-time image detail in a pro-level dSLR far exceeds anything in the video camera category, even the amazing Red One. This strategy anticipates not just every possible buyer, but prepares for the future as well.
One might think that this is a huge shift in my day-to-day shooting. That's where the best news is: shooting time-lapse footage is as easy as setting up a camera for a conventional landscape shot, but instead of pressing the shutter button once, I press the interval timer, and then go away. For all-night images, I just go to bed; for daytime footage, I use my other camera body and shoot stills while the time-lapse body snaps away every 3-5 seconds. This is not to suggest that all time-lapse is easy (or yields successful sequences), it's only to say that it doesn't interfere with my existing shooting patterns.
Note that the videos on my YouTube site do not represent all the footage I've done, either in time-lapse or conventional capture. I've done a number of productions for clients as an addendum to my standard still-photography services. So, I haven't really grown a new business model as much as enhanced my existing assignment services. Also note that my Canon EOS 5D Mark II, the body that I use in standard still photography, also captures HD video, where I do get short segments of conventional video clips. (Always adding to my "content.")
Lastly, don't assume by any of this that I'm moving towards video and abandoning still photography. The kind of video I'm doing is just the low-hanging fruit that happens to be available given my set of conditions (equipment, talent and clients). I am by no means a true videographer that could be hired by a television network to produce content for broadcast. That said, the future of video licensing looks very, very bright, and it would be something I would strongly encourage other photographers to do if they had a propensity for the technology and the clients that would use it.
Consulting and Business Development
2009 saw a big decrease in my consulting revenue largely because I'm shifting away from that business model. I've always used it as a vehicle for conducting research into new and interesting areas of the photo industry. However, my interests are shifting into new directions, and I'm finding that the information many people seek is becoming repetitive, and ultimately fruitless. I'll be posting future articles on some of those initiatives.
Nevertheless, one of the side benefits of all this research is that I produce a lot more content that's not only indexed well by search engines (which brings me traffic, which helps my content sales), but it also leads to publishing revenue. As most of my readers know, I have written a few books on the photo business, which continue to sell quite well on my website. Even though they are "old" by publishing standards, I wrote them with longevity in mind, as they address timeless business principles. In 2009, my book sales and other publishing revenue (see below) represented 12.8% of my income, compared to 14.9% of 2008 revenue. (This aspect of my revenue is and always has been rather constant.)
Another noteworthy fact is that my site outsells ever other book retailer on the net by many orders of magnitude. And I negotiated the contracts with my publishers with this in mindI don't mind taking less royalty advances on my books in exchange for very advantageous discounts for direct purchasing from them. Though my contemporaries in the photo business publishing world may sell more books on amazon than I do, I sell far more total books because of the volume on my site. There's also the fact that I get $10-15/book, whereas my counterparts get maybe 10-15% royalties on those amazon sales. (I'm guessing these royalties translate to about $1.50 to $2 per book.)
Then there's the revenue I get from publishers who reprint some of these blog entries (condensed down to 1500 wordsyuck!) in their columns and newsletters. Interestingly, most are from non-US publishers. (One was translated into Russian. I got a copy. It was weird to see.)
The next article in the series will cover Web Traffic and Visitors, Search Engine Optimization, and advertising revenue. Stay tuned.