Dan Heller's Photography Business Blog

Creative Commons Effect on Photo Licensing

2011-11-13T20:11:00.000-08:00

Julie Bernstein asked me the following question: "I am curious if your views on Creative Commons have changed since the four articles you published on this topic in '08."

Julie is referring to these articles (part1, p2, p3, p4) where I describe the CC as a great licensing method for almost all media types except photography.

In summary, what the CC has done is create a legally legitimate infrastructure for those who freely share copyrighted works. Before CC, such activity was technically an infringement, because the the publication of creative works requires consent of copyright holders. CC clears up that technicality, which is great. But it has inadvertently given people the impression that it has affected the licensing industry's pricing structures.

CC has not affected the greater licensing market (or prices), largely because of risk: CC has no centralized authority to assure that content is either submitted properly or used properly. Because it's so easy to game the system on either side of the photo (the supplier or the user can sue the other by luring them with a legally misleading scenario), the financial liability for anyone with a lot to lose is simply too high, especially given that traditional license fees are so minimal. So, the majority of image buyers simply stay away from CC.

Now, this is not to suggest there's something wrong with the CC model in principle. I'm a big advocate for it in all other contexts. Indeed, it was born out of the "free software" meme that was popular in the 1980s and 90s, when Gnu Public License (GPL) and other models were the precursors to the "open-source" model we still enjoy today. These are great innovations in licensing because they allow intellectual property to be used for the greater good, while also allowing for commercial use of those innovations.

But CC in the world of engineering is entirely different from photography. Engineering takes a considerable amount of time, resources and (usually) teamwork to produce anything of value that those in the open-source community would use. As such, the kind of content there is proportionally minimal, and each work is substantial and recognizable, making infringements quite easy to spot.

None of this is true in photography -- trillions of images are produced daily, it's impossible to track any given photo, or whether it is "legitimate" (either by the owner or the user).

So, sure, in a world of honest people that want to freely share their content in a peaceful corner of the image licensing market, CC is great. The CC market is growing, but the perception is only as a measurement of itself, not the total licensing market. An article on that topic can be found here:
http://www.danheller.com/blog/posts/total-size-of-licensing-market.html

Lastly, it's natural to ask, "If CC is so easy to game, why haven't we seen it?" The answer is because the market is so negligible. Economists often use crime data as a reality check on the economic activity they think they're aware of. The higher the crime rate, the more economic activity there is, and there's usually parity between that activity and the presumed size of a commodity's market. If there's little crime, the market size isn't big enough to warrant the effort. If CC were to genuinely gain momentum, it would attract those who would game the system for profit, which itself would have a cooling effect, bringing its popularity back down.

For the record, I've proposed that the best way to assuage people's risk concerns about CC is to use the "copyright registration" system. The CC foundation should have a submission system where those who want to submit images for CC licensing would bulk register those images to the copyright office. This gives them the right to file claims on behalf of the copyright owner, which is how major stock agencies like Getty work. Registered images are eligible for higher level of copyright protection, and there are federal penalties for fraudulent use. This means that users of CC images can be protected from invalid claims by those trying to game the system because this is built into the copyright act's provisions. Similarly, authors can be assured of CC compliance because non-compliant users could be subject to an infringement claim. Yes, you can sue someone for copyright infringement, even if the license fee were zero, because the infringement is another form of "breach of contract." Here, the user of a CC image agreed to the terms of CC by (for example) citing copyright ownership. Failing to do so is an infringement of that contract, and is therefore subject to the statutes provided by copyright law.

This would not only allow CC to have actual teeth, but the trust would go up as the risk comes down.

But such an infrastructure would be quite expensive to operate. That'd be a tall order just to create a system that brings the license fee for a commodity down only a few dollars, even if it is only to zero.

"Commercial Uses" and Model Releases

2011-09-30T21:14:00.000-07:00

In my last blog post, "Myth-Busting Model Releases", I received quite a bit of email from people about "commercial uses"of images, pointing to other discussion forums where, again, myths and hearsay prevailed among many misinformed, but well-intentioned photographers.

The common assumption is that "commercial uses" of images require model releases, but that's not actually true. The sole trigger for whether a release is required rests on whether the subject can be perceived as supporting or advocating a particular idea, product or service. True, many "commercial" uses of images do have people appearing to be advocates, and this is where the oversimplification begins. People overlook the many commercial uses where a person can be presented without appearing to be a supporter or advocate. Similarly, there are non-commercial uses that do portray the subject as a supporter or advocate, which would require a release. Two examples follow:

On the commercial side, there are companies that sell books, magazines, newspapers and other forms of media. While the content of their media may be editorial in nature (which doesn't require a release), the promotion of their products is commercial in nature. Just because they may be promoting an editorial product, it's irrelevant. Promotion is a commercial activity. Full stop. But again, "commercial use" does not itself trigger the need for a release.

For example, a highly critical book about Rush Limbaugh ("The Most Dangerous Man in America"), by John Wilson) sports a photo of Rush himself on the front cover. And given the scathing nature of how Rush is portrayed in the book as an irresponsible, sexist, racist, ideologue, one would expect that Rush signed no model release or provided consent of any kind to have him or his likeness be associated in any way with this book. Obviously, the text is editorial commentary about the controversial radio host, so no consent is necessary for using the photo on the book itself.

But what about the promotion and advertising for the book? Both of those are "commercial" in nature: profits are made, and the book itself is a product. Again: promotion is "commercial use." Full Stop. So, one would think that Rush would have his lawyers find any legal position possible to stop or slow down the supply chain, from the photographer to the stock agency to the publisher. Yet, there it is in full color, used to both promote and advertise the book.

The reason a release is not required is not because this was the photo used on the book, but because this photo—or most any photo—would not cause a common person to believe that Rush is an advocate or sponsor of the book. (If there were a photo of Rush standing proudly next to a poster sized replica of the book, then such a photo could suggest he advocated the book, although the existence of such a photo would be unlikely.)

So, the fact that a photo is used as part of a promotion is a red herring. Photos may be on web pages, in portfolios, and presented for sale, yet the "advocacy" question is not satisfied simply because photos are displayed. There has to be more context to imply advocacy.

This is true of non-commercial uses as well. Non-profit companies often believe they can use photos of people in their materials because they are implicitly "non-commercial." But again, the determining factor is whether the person could be perceived as an advocate or sponsor of the organization.

Speaking of supply chain, note that the photographer who shot the photo of Rush Limbaugh didn't need a release to take the picture or to sell the image; he didn't need to know what the buyer was going to use it for, assuming he was even aware that someone was buying it. Similarly, a stock photo agency can display the image online, which is how the book publisher (Thomas Dunn Books) found it.

The moral of the story is, take "commercial use" out of your vernacular, and only focus on the "advocacy" question. And while that's the right place to start, such assessments are not always easy; people disagree on specific cases and argue incessantly.

A common example is photographer's own self-promotional pieces. Naturally, most believe that these are "commercial use" of images, but again, that's not the sole trigger. Most images used as part of a piece that promotes someone as a photographer is almost universally interpreted by the public as "examples" of the artists' work, not necessarily as advocates for them. Such an assertion would require text, often in the form of a quote praising the photographer's work. That context would require consent from the person depicted.

As for being in the business of selling photos, photographers are never responsible for having to know the answer the "advocacy question." Someone else is going to publish their pictures, which means that the buyer bears the risk. Photographers or stock agencies can't be responsible for how other people use the images they acquire, especially because one can't make the advocacy assessment until the photo is ultimately put to use, which is long after the financial transaction took place.

Lastly, there are portfolios: Photographers do not need releases for photos for these.

First, a portfolio is rarely considered a "promotional" item, unless it's put together very poorly. Professional portfolios consist of a collection of artistic works that demonstrate the skills and talents of the photographer. For any given image to be interpreted as to suggest the subject were an advocate for the photographer, particular text would have to be used, which is not typical for a good portfolio, which means that permission is not required in order to use photos of people. This includes all forms of publication of the portfolio, whether in physical form, or as a website, or other media.

The one thing to be aware of, however, is that sometimes photographers take pictures of people in special, "closed sessions," where an agreement was made ahead of time—before the photo was taken. If a subject posed for a photographer with the pre-arranged agreement that the photos would not be used in a portfolio or any other manner, than that agreement takes precedent. (Of course, a new agreement, such as a model release, can supersede it.) Such an agreement would have to be established first--it cannot be retroactively enforced.

That said, any good photographer would honor such a request, even if he or she didn't have to.

Busting Myths about Model Releases

2011-09-28T15:43:00.000-07:00

The internet is a virtual echo-chamber of facts and myths of all sorts. When something goes viral, there's no stopping it. Even the most blatant falsehoods can perpetuate for years if they cause no harm in believing them. An example is the myth that the different regions of the tongue tastes different types of things: sweet in the front, sour in the back, etc.. In fact, all taste buds are identical, but the myth started from a single, faulty study in the 1800s that was published in a school text book, and it's been repeated ever since.

In the photo business, the greatest myths are those involving model releases. If you have ever considered selling (or licensing) photos on your own, or through a stock agency, you've probably been told that photographers need "model releases" to sell photos of people, and "property releases" to sell photos of buildings and the like. Some stock agencies actually reject images unless these photos have releases.

While it's true that model release are necessary for certain situations, the actual laws about these issues are deep and complex. As rumors and hearsay perpetuate on the net, the over-simplification has resulted in virtually all the "advice" and conventional wisdom about model releases to be entirely wrong. And the reason why these myths perpetuate is because they cause no harm. No one ever got sued for having a model release. So, people follow the advice because they (and others) seem to be safe, perpetuating the myths.

So, why address the myths about model releases? Because photographers are losing enormous opportunity by not trying to sell the images they don't have releases for, and by going to great lengths to get releases they don't need. Despite the rumors, most publications of photos are not the type that need releases anyway, resulting in an enormous market of buyers. Most photographers could continue to have very successful businesses without ever getting model releases, all while doing exactly what they are doing today. Sure, releases are important for many types of publishers, so if you do get releases for their benefit, you can expand your buyer base by getting them. But it's a proportionally smaller market than people think, and the time, effort and resources necessary to properly obtain, manage and catalog releases is rather substantial. This investment will rarely be offset by the incremental income from sales of images that actually do require releases.

This article attempts to help the photographer looking to make money by setting the record straight on the most common myths about model releases.

Fact #1: You do not need a model release to take pictures.

Nuff said. Don't let anyone tell you otherwise. Everyone in the world has a camera on their phones, and photos are taken constantly. You don't need someone's permission to take their pictures. Now, just because you might eventually intend to sell your photos has nothing to do with the ability to take pictures in the first place.

Fact #2 You do not need a model release to sell pictures. And "profit" has no effect on whether a release is required.

First, newspapers buy photos, and their use of the photo is unlikely to need a release. So, selling a photo (and making a profit doing so) to a newspaper also does not require a release. And because the law does not require you to have any knowledge of the buyer or their intended use of a photo, you are always allowed to sell photos without a release.

Fact #3 You do not need a model release to make photos available for sale, either on your own website, or through a stock agency.

If one can sell a photo without a release, one must also be able to "make photos available for sale" without a release. This includes the publication of such photos in a manner that would allow potential buyers to find them.

The legal case that established precedent for this was Corbis vs. James Brown, where the judge called the depiction of a photo as being for sale a "vehicle of information". Here, consent from a subject is not required.

Therefore, one can make photos available for sale in any manner of publication and media, whether it's traditional print or online formats, including personal web pages, photo-sharing sites, social media sites, stock photo sites, or mostly anywhere.

For detailed information, see the article, Model Release Primer.

Fact #4: A "property release" is NOT required to sell or buy photos of buildings or people's personal property (like land).

The root of this misunderstanding is complicated. The term "property" in an actual "property release" refers to two particular forms of intellectual property: trademarks and copyrights. Examples include logos, designs and other works.

Now, just because these are "protected" works, it doesn't mean that one cannot publish photos of them. It only means that the manner in which such works are depicted cannot cause confusion among the general public about who "owns" the properties, or other legally complex factors. It is impossible for a photo of a bottle of coke to cause the general public to suddenly think that the Coca Cola company was now owned by a freelance photographer in Topeka. If the photographer sold the image to a publisher, and the publisher's use of the image would imply that it had a unique and special business relationship with Coke, then that would trigger a trademark infringement claim. But that would be with the publisher, not the photographer, nor the stock agency that sold the image. Furthermore, such an infringement couldn't possibly happen by merely the photo being printed. Text around the photo would have to give this impression. And, since the photographer or anyone selling such a photo cannot know or control how a publisher uses a photo, they could never be held liable for the infringement.

Like the myth about the tongue's different taste regions, the history of the "property release" stems from a single misimpression from long ago. Certain physical structures, such as the Golden Gate Bridge and the Transamerica building in San Francisco happen to be registered trademarks. And, they have been infringed upon inappropriately in the past, but these were cases that have nothing whatsoever to do with photography. And at the time, news of these suits briefly caused publishers to shy away from publishing photos of such places unless photographers could provide property releases for them. Those releases were not for the buildings, but for the right to use the trademarks. This was very short-lived, however, because it is impossible for photographers to obtain "true" (and legally valid) property releases for trademarks without paying enormous sums of money. So, even though the publishers stopped asking for those releases, the rumor perpetuated nonetheless: photographers erroneously interpreted these requests as "mandates" that all photos of buildings required "property releases." And they've been behaving that way ever since.

To be crystal clear, property releases are not required to sell or resell photos of buildings and other real estate (or physical property of any sort, such as land, pets, livestock, homes, etc). If something happens to be a registered trademark (building or otherwise), then the publisher will already be quite aware that they are the ones that need to obtain permission from the trademark owner (which may not even be the building owner). Any permission obtained by the photographer would be entirely useless to the publisher. In fact, every single property release used by photographers gives no legal right to use a trademark, and since buildings and other items do not require consent for photos of them to be used, these property releases are worthless pieces of paper. But they also cause no harm.

For more, see Photographers' issues concerning trademarks and photography.

Fact #5 You usually do not need permission to shoot pictures of (or on) private property.

While it's true that property owners can restrict photography, that's not saying much. They can also stop you from picking your nose. It's their property, so they can stop anyone from doing anything. You've seen signs that say, "No shoes, no shirt, no service." There's also the sign that reads, "We reserve the right to refuse service to anyone." In short, property owners can apply restrictions indiscriminately and inconsistently and arbitrarily.

But, the owner has to proactively take an action to prevent you from doing things. It's not that you're prohibited from actions by default, and they then grant you permission later. So, most of the time, there are rarely (if any) actual restrictions property owners enforce.

This includes taking pictures. It's permitted by default, and to prevent it they must take explicit actions, including (but not necessarily limited to) posting signs, as noted above. If you are not stopped (or are given reasonable advanced notice), any photos you take are legitimate, and can be sold legitimately. (See later section on "ownership.") Further, one may not retroactively enforce their restriction. That is, if you were at a private event, and then later told you were not allowed to take pictures, it has no affect on your photos or your ability to sell those images. (Publishers, on the other hand, may need releases if the nature of the publication would require it. But that doesn't affect the photographer's liability.)

So, if you're in a bar, or in an amusement park, or touring a winery, you are allowed to take pictures unless you're told not to while you're there. And if you do take pictures, you can sell them to any buyer willing to assume the risk, if any exists.

Sometimes, photographers will often seek permission to shoot pictures ahead of time. This is not only unnecessary, but invites someone from stopping them. If you know ahead of time that you will need permission, that's another story.

Fact #6: You do not need releases for Art, Books, Exhibitions, Presentations, Fairs, Contests, Postcards, Calendars, Etc.

At the risk of over-simplification, the only time a release is needed is if a person can be seen as supporting or advocating an idea, product or service. True, there are often disputes about whether a given publication of a photo of someone could be construed in such a way, but the dispute gets closer into the safety zone when that publication is a form of artistic expression. The First Amendment of the US Constitution protects "artistic exhibitions" (and publications) as a form of free speech, so consent from anyone else—by definition—is never required. Money or profit has nothing to do with whether a work is published or "depicted in an artistic manner."

Again, people argue frequently about whether such depictions are, in fact, artistic in nature, which leads to a complex argument: is it art, and if not, is it a promotion, and if so, is it the type of promotion that should have required consent from the person in the photo?

While these are all good questions, the reality is that no one has ever successfully won the argument that a model release was necessary for a photo that was used in a book, in an art gallery, or at a fair, or any of the items in the above list. In short, the law is on the side of the First Amendment by default - a claimant bears the burden of proving otherwise, and that's a difficult and very expensive bar to clear. While is indeed a very deep and complex subject, those wishing to seek quick answers can feel relaxed: "don't worry. You're fine."

For for more info, I encourage you to read this.

Fact #7: Photographers do not need releases for photos in their portfolio.

A portfolio is a collection of artistic works that demonstrate the skills and talents of the photographer. Permission is not required in order to use photos of people in a portfolio. This includes all forms of publication of the portfolio, whether in physical form, or as a website, or other media.

The one thing to be aware of, however, is that sometimes photographers take pictures of people in special, "closed sessions," where an agreement was made ahead of time—before the photo was taken. If a subject posed for a photographer with the pre-arranged agreement that the photos would not be used in a portfolio or any other manner, than that agreement takes precedent. (Of course, a new agreement, such as a model release, can supersede it.)

For more on this, see Personal Privacy and Model Releases

Fact #8: Posting photos online is just another form of publishing.

What determines the need for a release is whether a photo makes someone appear to support, advocate or promote ideas, products or services. The medium itself is irrelevant, whether it's traditional physical media, or online/electronic media. One cannot say whether a release is required for photos "posted on the web" because it depends on the way the photo depicts the person in it.

When photographers put images on their professional website, they think that this suggests that the people in those photos could be construed as sponsors or advocates, but that's not complete. Putting photos online to "sell" does not require a release, depictions of "art" do not require a release, and a "portfolio" does not require a release. The only way a photo would require a release is if the photographer created a self-promotional piece (such as an ad) that promoted his or her services, and used a photo of someone that might suggest it is a client.

Fact #9 Ownership of physical pictures and ownership of rights are different.

When people hire photographers to take pictures of them, they think they own the photos, or have rights to publish them. They don't. This has to be agreed upon, usually ahead of time (but it can be negotiated later.) Normally, this isn't a problem. But where things break down is when subjects don't like the photos of themselves. Here, they try to demand them back, but they don't have this right. (They also cannot retract permission if it's been granted in writing, such as a model release.)

The same thing is true of pictures taken on (or of) people's property. They think that because it's their house, or their private event, or their pet, that they have the rights to the photos. They don't. Nor can they stop the photographer from publishing those photos. Non-humans do not have inherent rights, unless protected by trademark or copyright.

Concusion

The reality is that photographers (and stock agencies) don't get sued for the publication of an unreleased image. And given the very high cost of suing someone, litigants are usually told by their lawyers to go after the "publishers" of the images in question, as they are the ones who bear the true legal liability.

As an active photographer, understand that most people are entirely uninformed about model releases, and factor this into your business dealings. Publishers, stock agencies and many others may vehemently demand a model (or property) release before buying photos, or for accepting your images into a stock agency. Despite their being wrong, this is the way of the world, and you can only do what they ask, or don't play.

But don't underestimate the sales potential of your unreleased images, and the large market of buyers who don't make such demands.

For those with interest in reading the details, I have many articles that answer all the technical questions, like this one and this one. I also wrote a book called, Photographer's Guide to Model Releases.

Time-Lapse Movies Demo Reel #1

2011-08-25T00:20:00.000-07:00

I'm happy to announce that I've entered into an agreement with Thought Equity as the exclusive reseller of my time-lapse video content. Although I will continue to sell still images on my site (danheller.com), licensing video is another matter entirely. In other words, it's a very narrow, tightly-controlled market segment.

You can browse my movie clips here: http://bit.ly/heller-timelapse-clips

The following is a short (3-minute) demo reel of a few select time-lapse scenes.

If the video does not appear above, use this link: http://www.youtube.com/watch?v=b0nUj_lHwEk

Search Engine Optimization and The Long Tail

2011-02-14T09:10:00.000-08:00

I was inspired by an entertaining article I read in today's New York Times titled, The Dirty Little Secrets of Search, detailing the rise and fall of JC Penney's Google rankings. Turns out, JC Penney's SEO consulting firm allegedly bought a huge number of paid links on websites, most of which aren't actual sites at all, but domain names purchased solely for the purpose of placing links to PC Penney. Google takes this very seriously, and has been known to eliminate sites completely.

The rationale for this approach is, as most people know by now, that your ranking is governed most largely by the number of other sites that link to yours. Unfortunately, what many people still don't know is that gaming the system doesn't work. (Link exchanges are a sure way to lower the ranking of both sites that link to each other. That's why JC Penney's SEO firm just created sites that had one-way links.) While it'd be nice to have organic linking, where people simply "talk about you" (and provide a link) on many websites on the net, that's not so easy to do and takes a lot of time.

In this day and age, if you're going to succeed as a stock photographer, you have no choice but to figure this out. This strategy begins with two questions: 1) which keywords or phrases do you want to rank highly for, and 2) how do you seed yourself around the net?

The answer to the second question begins with the first: find the right keywords.

Here is where most photographers (and agencies) get it wrong: they shoot for keywords like, "stock photography," and other industry trade terms. But this doesn't work so well. Google's Traffic Estimator shows terms like "stock photography" yields only about 90,000 global monthly searches. Sites that rank highly for only a few keywords or phrases never do well, even for popular search terms. Instead, reach for many search terms -- as many as possible.

My site (danheller.com) ranks in the top five positions on 751 search terms, and 1205 search terms rank in the top 10 on Google Search results, according to Google's Webmaster Tools. But I'm not actually trying to rank highly for any given search term at all. That would be futile. Odd as it may sound, I rank #1 for "stock photography business," but I swear I didn't try to. Of course not, because that search term doesn't generate enough traffic to warrant investing any special time or effort. That's the point. This is the "long tail" approach to keyword indexing: it's about breadth, not depth. I don't get that much traffic to any single page. By ranking highly in such a vast number of terms, it's the aggregate that matters.

All this starts with simply being indexed. That is, search engines have to know what words and phrases you have before it can rank them. Choosing the right words is one thing, but you also need Google to trust your keywords. In other words, trust you. Unlike standard text on a page, which Google is good at, photos are different. An algorithm doesn't know what's inside a photo -- it has to look at other characteristics to determine its content, such as surrounding text, the name of the page it's on, and of course, its metadata. In particular, the "keywords" tags embedded in the IPTC header of the image file.

Once again, here's where most photographers and agencies get it wrong: they "pollute" their keyword lists with dozens, if not hundreds, of phrases and expressions, hoping the target image will come up as a search result for any one of them. But Google will actually penalize people try to game the system with "black hat" approaches, like using repetition (singulars and plurals together), lots of synonyms, intended misspellings (by seeing both the misspelled and correctly spelled words together), and tons of generic terms (such as "photo", "image", "photography," etc).

Products like Cradoc's Keyword Harvester and A2Z Keywording each suffer from (and perpetuate) this problem. The main reason is because they are trying to anticipate what a searcher might look for. This is not only impossible, but the mere attempt reduces your credibility index in the eyes of almost all search engines.

Almost all? Which search engines does it actually work for? One of the people responsible for this policy told me "microstock agencies is where our customers submit their photos, and those search engines are not that smart. So, we have to be thorough."

True enough, but this raises two issues. First, despite the fact that microstock websites are popular among amateur photographers and a growing population of desperate pros, looking to pick up the pennies from as many sources as possible, the vast majority of those looking to license images don't go to stock agencies. They go to main search engines.

Second, even among the brain-dead search technology employed by stock agencies (except for Getty's whose search technology is quite good), proper keywording techniques still perform quite well at those places. The reason is that people searching for images don't go about it in the diligent, thoughtful way that photographers think they do. People do not search using conceptual terms that those who sell keywording products would lead you to believe.

Keywording properly is really boring, and far less time-intensive than people make it out to be: just the basic "facts" about the photo can be described in a handful of terms. The search engine will do the hard part. Granted, this is a bit simplified, because it doesn't address issues like word definition ambiguity, synonyms, and so on. But this isn't done by humans anyway; it needs to be handled by the search engine's heuristic engine. True, stock agencies don't have them, but again, the trade off is whether to achieve "good enough" with the less-frequently used stock agency or the "proper" method advocated by the search engines.

This is why the "proper" method achieves the best of both worlds: you will be indexed properly and given higher "credibility" with public search engines like Google, and you won't be penalized by the microstock agencies even though images might only use a handful of keywords, rather than dozens or a hundred.

The next question is how to get all those coveted links from other sites to direct traffic your way. This technique is not easy; it requires work. You need to write a lot, post to discussion forums, socialize and network, be on the "inside" with industry people, and above all, talk about what you know. And here's the real hidden secret, I'm not talking about photography. The discussion forums, industry people and the topics you talk about are best when it's something other than photography because it's highly likely that you're an expert at something other than photography.

Of course, if you are well-informed about photography and are regarded as a leader in the field, then go for it. But if you are, then you're probably not reading this... at least, not with the goal of improving your photography business. I am better known for my business analysis, which happens to be in the photography field, than I am for my photography as an art form. That I sell lots of images (prints and licenses) is not a byproduct of my artistic skills. It's the byproduct of having published so much about the business of photography.

The more you engage in discussions online and offer useful, insightful and meaningful commentary, the more people will link to you. Offer to write for magazines. Try even writing a book or two. Sure, it's an investment of time. What'd you expect? That it'd be easy?

The perils of taking advice from pros

2011-01-23T11:35:00.000-08:00

I got an email today that seems to be representative of a common thread I'm seeing. I included excerpts from the original sender and my responses:

In Chapter 7 you note that in 2000 you increased your image library, and had a big spike in traffic (2000 visitors/month). If you don't mind me asking, approximately how many images did you have online entering 2000?

I have no idea. And though I appreciate the motivation for your question, the milestone comparisons are inapplicable. The major reason my success back in 2000 was that there was virtually no appreciable photo content online. Anyone that put photos online did well. Most pro photographers were still shooting film, and the time and cost of getting that media scanned and online was a major barrier for photo imaging growth. While digital cameras were around, their resolution and image quality were too low to have much commercial value till 2003 (Canon's EOS 1Ds was the first camera that could produce an acceptable professional image quality for commercial production.)

So, whatever size my archive was, or photo quality, it was easier to succeed. So, don't look at my past as having any relevancy to today's market.

I tried to advise pro photographers to do this back then, but most were adamant that it would cause more harm to have images "stolen", and that film-based stock photo agencies were still the only viable distribution channel. It was this heated argument that propagated my postings (and my website) to other websites, which resulted in my getting so many links, which translated into traffic, which helped elevate my site rankings, which translated into sales.

(Ok, I'll admit it: I probably also had a lot of worthwhile photos to buy.)

A big part of my strategy is blogging on my image creation and some of the places I have visited where images were taken. I'm trying to be as search engine friendly and optimized as I possibly can, per your suggestions.

My suggestion is not to be "search-engine friendly", per se. It's to rank highly in search results. The two are not the same, and you don't achieve high rankings by having search engines merely find you and index you accurately. (That's being "friendly".)

Ranking highly in search engines requires other sites to link to your site. The value of those links are assessed by the ranking of those sites, which affect your ranking. Search engines are aware of people attempting to game the system through "link exchanges". Accordingly, you can reduce your own rankings if you try to agree with other sites to link to each other as a way of increasing each of your link counts. Those sites rank poorly, and so will yours, if you do link exchanges.

So the question is, who do you want to link to you?

Writing articles on "image creation" and "the places you've been" will attract mostly other photographers. And they don't buy photos. While it is certainly desirable to have highly-ranked photo-centric websites link to you, this is a very narrow market, and not one that will boost your overall rankings that ultimately attract image buyers.

If you're going to invest time into blogging, you want NON-PHOTOGRAPHY sites to link to you. How do you do that? By blogging about subjects that probably have less to do with photography as the other subject.

My advice has always been to be an expert in something other than photography. Write about that and cross-post your articles to discussion forums or other formats to attract new and different audiences. If they regard your knowledge and opinions as valuable, they will link to you, talk about you, and regard you as credible. This is what will raise your site's ranking.

Do I follow my own advice? Well, not as much as I should. Yes, my site has a lot content about photography (business and techniques), and yes, I rank highly for that. But again, I did this back in the 1990s and early 2000s, when such things mattered. It doesn't matter that much anymore. I would not be successful today by repeating the same steps I did back then, so don't emulate me just because I capitalized on what was at one time a successful technique.

More recently, I have a great deal of non-photography content as well -- mostly in the form of photos, of course. But here's where I've dropped the ball. I don't spend nearly the kind of time talking about non-photo subjects as I should. I am in the fortunate position where I don't really have to. And that's the part that doesn't translate to other, emerging photographers.

This leads to another point I've made often in the past: don't emulate other pros. What they do NOW, or have done IN THE PAST, often has no bearing on their current success, or yours. Most of them are unaware of this, and erroneously believe they have advice that emerging photographers should adopt.

See this blog post about asking pros for advice. Though it's about pricing, the concept is the same: pro photographers' opinions or experiences are not universal and cannot necessarily be expected to apply to anyone else--especially those still trying to build their careers or a presence.

There's also this related post: this one is about the perils of being a photographer's assistant, or having existing pros be "mentors." Most pros today were successful at a time where their experiences no longer apply today. Having their advice can be fraught with as much poor advice as useful, and emerging photographers cannot discern between the two.

My best advice for emerging photographers in this day and age is not to look at photographers at all -- look at general online business development. There are many texts and periodicals that deal with building business models that are more universal, and can better translate to a photography business than what narrowly-experienced pros can offer.

(New Photos) On the Nile: Cruising from Cairo to Aswan

2011-01-21T09:31:00.000-08:00

I just posted a new gallery of photos from the photo expedition I lead in Egypt over Christmas. You can view them here:
http://www.danheller.com/egypt

I also shot time-lapse footage of select scenes here:
http://www.youtube.com/watch?v=UKB6EmqoBjA

Day 3: Luxor Temples

2010-12-25T12:25:00.000-08:00

Day 3 already. These images are from Luxor, the main temple and Karnak.

http://www.danheller.com/luxor

Tomorrow we go on a boat down the Nile, and there's no internet access... apparently, for five days. What will I ever do.

Cairo, Day 2: The Old City

2010-12-25T03:54:00.001-08:00

Merry Christmas everyone -- here's pix from Day 2 of my photo workshop.
We spent the day in the Old City... great stuff to see.

http://www.danheller.com/cairo-2

Trip to Cairo: Day 1

2010-12-23T18:44:00.001-08:00

I'm on a new assignment, leading another photo workshop. This time, I'm in Cairo Egypt.

Rather than wait till my trip is done and it takes me months (or longer) to post photos to my site, I thought I'd post them here on a semi-daily basis as I shoot them. So, here are some select shots from today:

http://danheller.com/cairo-1

dan

Model Release Seminar: Tuesday Nov 9 (ASMP, SF chapter)

2010-11-09T10:33:00.000-08:00

I forgot to mention this sooner: I'm giving a three-hour seminar on model releases as the San Francisco chapter of the ASMP starting at 6pm ($20 for non-ASMP members, $5 for members, but then, there's free food).

Information can be seen at www.asmpnorcal.org

Flatter Stock Licensing Tiers

2010-10-26T09:14:00.000-07:00

I was recently sent email from someone who asked very good--and very common--questions, and I thought it might be apropos for my blog:

Do you think that a price does not depend on target audience? I imagine that for web use it has not a sense, but for books, newspapers, magazines, CDs: does not it have still importance in current market?

The current stock photo market is such that simplicity is king. For the most part, buyers are no longer accustomed to pricing tiers based on the criteria you mentioned above. Back before the internet, buyers and sellers had those pricing tiers because the economics permitted it. That is, buyers understood that different uses and tiers made it possible for them to get access to commodities that used to be under much tighter controls. In the 1990s and before, stock photography was sold through glossy, elaborately designed books; if a buyer wanted a photo of a tiger, there was a page with about 10-15 images, and that was the entire lot to choose from. When the supply of images and the distribution channel are tightly controlled, the distributor has much more control over the pricing structures.

Furthermore, the supply chain between image creators and users was more complex and expensive: there's the overhead of having slides sent (both ways), the overhead of scanning and touching up photos, personnel and expertise in design and technology, all of whom were skilled and nuanced trades.

The combination of a controlled distribution channel and an expensive supply chain implied a delicate balance in the financial flexibility between buyers and sellers, each wiggling up and down in price negotiations to settle at an equilibrium: a pricing structure that allowed lower-revenue editorial clients to participate alongside their commercial counterparts. This inherent inequality was balanced by those very pricing tiers, where buyers could plan their publication budgets so that they could put more money into images that appeared on more prominent positions (e.g., a cover shot vs interior pages), or to buy more or less "exclusive" content that fit their needs.

But then the internet and digital photography came into the picture. Here, the cost of creation and distribution of images went to zero, which subsequently opened up the channel to everyone that was previously locked out: consumers, hobbyists and semi-professionals. These two factors contributed to the collapse of the entire economic "reasoning" behind the pricing structures of stock licensing. Back in 1999, I said that it'd take about 10 years for this to filter through the economic ecosystem, and the supply/demand imbalance would erode those tiers, and the pricing structures would invariably flatten.

Indeed, publications no longer hire high-end photo editors with an art degree, skilled in design, and savvy in the business of creating quality publications. As lower-skilled (and lower paid) workers leveraged increasingly more sophisticated page-layout and print software, very high-quality publications can be created at much lower physical and employment costs. This has created a fundamental shift in the economics of every single business that uses imagery, not just photographers and agencies. Every company in the world uses photos of some kind at some point in the company's lifetime, and since companies employ people, one can say that the entire world's cultural attitude about imagery shifted: it's no longer considered a skilled labor, but that of a commodity, where just about anyone can do "a reasonably good job" (not that all of them actually do).

The net effect on the photo industry is a recycling of the photo-editor staff to an entirely different kind of employee. This new photo buyer is not only unaccustomed to any of the historical tiers of pricing rationale, but they are financially constrained to work within a budget that, like it or not, yields no material difference in the overall business. In a difficult economy, where companies share the financial challenges as the employees they employ, those who try to be the Good Samaritans and help the needy photographer only find they suffer at the bottom line.

Now, all that said, there's one overwhelming factor that can be used to preserve pricing structures: the fact that the most overwhelming cost associated with acquiring images is not the license fee of an image, but the cost of search and acquisition. The huge supply of images on the internet, and the exceedingly poor search mechanisms on all search-based sites (ranging from Google to the common stock agency) means that finding images is a very costly endeavor for photo buyers, irrespective of their "skill." As I've written in the past, it often takes anywhere from 1-5 hours per image for a photo researcher to find a set of images that exceed the lowest-threshold of acceptability for their needs. The actual cost of the license is negligible compared to the cost of search and acquisition.

(Note that the latest Pulitzer Prizes for economics has gone two to economists who've used the same mechanism to explain the disparity between the high rate of employment at the same time as there is also huge amounts of unfilled jobs. They came to the same conclusion: the cost of "finding where those jobs are" exceeds the feasibility for the job-seekers to go get them.)

Accounting for this economic reality, I have flattened my pricing tiers from the more traditional menu of editorial/commercial use and "placement", to that of a single metric: the size of the image. I don't care about anything else because I'm reflecting the attitudes of modern photo buyers: they don't care or understand the older pricing rationales and just want to get the image they want and get out. They are more prone to buy when the licensing mechanism is fast and simple.

Though my prices have also lowered a bit, they have not dropped nearly at the same rate as the pricing structures found in stock photo agencies, big and small. The rate of photo buying on my site has not dropped, despite the fact that my prices are 100-1000% higher than those on microstock sites. But don't let the huge percentage ranges fool you: just because I may sell an image for $50 when a microstock might sell the same image for $1 doesn't really mean anything to the photo buyer. That cost differential is largely irrelevant. They know that in order to save $49, they have to go back to the research stage, retrofit new images into their page layout, get new approval from clients, and so on. That's not worth the $49 difference.

What about exclusivity? Have you ever licensed an
image with a exclusivity clause for a certain amount of months/years?

Perception of exclusivity is way overblown. While all buyers love the idea of using an image that no one else will use -- which often causes them to "request" exclusivity -- the economic reality is that there's very little market for that. Whenever anyone asks for it, and I quote them any kind of upcharge, they always say, "nah, forget it." The issue of exclusivity turns most photographers into worry-warts, concerned that they'll fail to get the gig, or license the image, or scare away the client... And of course, they don't know what to quote, which they feel they need to do because the client asks for a quote.

My recommendation is not to worry about this, but instead, give a simple explanation to the client that the need for exclusivity is largely overblown. Unless the image was specifically shot for the client and contains very unique or proprietary information (people, things, or access), the upcharge for exclusivity will not pencil out to be worthwhile. In a global market of many images and many businesses, the risk of having the same image used by a competitor (or anyone else) is too low to bother paying the upcharge. Yes, I am aware of the famous 'oops' stories -- these are anomalies, not truly representative of the market.

... how could you manage everything before becoming a full
time photographer? I mean your previous job, photos, website, business
analysis, blog, wife and a child?...

I have always recommended that no one should ever enter into the business of licensing photography as their sole source of income. This is not the type of job that you jump into and instantly start making money. You should always start with photography as a hobby, build your inventory, establish your web presence, participate in social networking, and set up a stock-licensing fulfillment system. And do all this while you have a real job (or income) doing something else. If you go about your hobby efficiently and effectively, your licensing income will grow, and more importantly, be sustainable and predictable. Your traffic to your site should be a repeatable wave pattern (high traffic during the week; lower on weekends), and your sales should be similarly consistent. If this data is erratic, your business is not yet established well enough to rely on it as your sole source of income.

There are many other career-building aspects to this, and I cover them all here: http://www.danheller.com/biz-sense

The Obama Photo Copyright Controversy (Revised)

2010-08-16T23:58:00.000-07:00

NOTE: This posting is intended to supersede my prior blog post on the same subject. This article is a more concise articulation of the more relevant issue facing the controversial topic.

I was recently forwarded Peter Friedman's article titled, Fairey˙s Obama Hope poster copied nothing from Garcia˙s photo that could be copyrighted.

Normally, the arguments in this case are whether Shepard Fairey's artistic rendering of the image is an infringement of a photograph by AP photographer, Manny Garcia. But in this case, Friedman argues that the image doesn't have enough "copyrightable elements" for it matter in the first place. Under copyright law, works are ineligible for copyright protection if they do not contain enough unique qualities that would differentiate them from others. For example, photos of coins are generally not copyrightable unless there are unique angles, uses of light, or other qualities of a "creative" nature. Friedman argues that, while Garcia's photo may contain some elements -- though he also argues they are minimal at best -- Fairey's artistic rendering virtually removes them: that Fairey's image has few, if any, copyrightable elements. His article states, "the poster entirely changes these details by transforming them into a stylized combination of red, white, and blue. Moreover, it is plain the colors of the photograph are in marked contrast to the colors of the poster."

Friedman's logic concludes that if Fairey's photo has no copyrightable elements, then how can such a work infringe on any other work?

While an intriguing question, one that I hadn't heard raised before, the artist in me has a hard time buying into the notion. Fairey's is a very identifiable style, one that Friedman himself applies to his own image, as shown here.

Not only does Fairey's rendering enjoy its own protection under copyright, but the fact that it was derived from Garcia's photo means that Fairey's ability to use the work is limited. No one disputes that. Where the real argument begins is discerning the conditions where Fairey is limited, and where he's not. That is, unless he gains permission from Garcia, Fairey's use of his own rendering is limited to "editorial" uses, such as artistic display, political or social commentary, satire, and so on. On the other hand, "commercial uses" require Garcia's consent, such as when the image to advocate a product or service, or to promote an idea, including political or religious points of view. These are the types of uses that define "commercial use" as described by most state publicity laws. Granted, publicity laws and copyright laws are different, but the definition of terms are consistent.

And herein lies the ultimate question: is the Fairey "Hope" poster a form of protected political speech, or a commercial use? As Friedman points out, political speech is at the heart of the First Amendment, and people's right to express themselves--especially on matters of politics--is always given deference by the courts.

While a true statement, it's not quite that simple. Just because the Fairey image has been used in a political context does not necessarily imply that it's "political speech." And even if it is, the greater question is whether you can appropriate anyone -- or anything -- as a tool in that speech. For example, if the Fairey image were of a recognizable factory worker holding a hammer, and that person was an ardent Republican, we can be very sure that this person would sue Fairey for suggesting that he was an advocate for Obama. And the courts would not even begin to entertain the notion that this use of the image was "protected political speech." The First Amendment has its limitations, and this is such an example.

Although "property" (such as a copyrighted photograph) does not enjoy the same protections as people's rights of publicity, the point of the example was more to illustrate that the use in question is would fail a critical Fair Use test: it's an advocacy piece, and when advocating a political idea, you cannot misappropriate someone's likeness or their property without their consent. The ideas, opinions and expressions have to be yours, and yours alone. You have the right to express an opinion about someone in a political context, but misappropriating their property (or someone else's) for that purpose is not the same thing.

What if Fairey applied his artistic rendering technique to the Pepsi logo and added the phrase, "Obama's Generation." One can imagine that Pepsi would not take so kindly to having their logo misappropriated in such a manner.

Now, if Fairey's work were merely a piece of art hanging in a museum or an art gallery, courts have deemed this as Fair Use, regardless of the price that it may command, or even whether he copied it directly from Garcia's photo. ("Commercial" use is not not measured solely by monetary consideration.) Yes, one can appropriate another work, a person, or a logo without their consent, for purposes of artistic expression.

But which is the Fairey image? Protected art form? Or an advocacy poster? We have competing notions, but which carries more weight? To reconcile this logjam, courts often take into account is the predominant use? Is it used more as an art form? Or as a form of advocacy?

Or is Fairey just out to make a buck?

The Obama Photo Copyright Controversy

2010-08-14T12:33:00.000-07:00

I was recently forwarded Peter Friedman's article titled, Fairey˙s Obama Hope poster copied nothing from Garcia˙s photo that could be copyrighted.

Normally, the arguments in this case are whether Shepard Fairey's artistic rendering of the image is an infringement of a photograph by AP photographer, Manny Garcia. But in this case, Friedman argues that the image doesn't have enough "copyrightable elements" for it matter in the first place. Under copyright law, works are ineligible for copyright protection if they do not contain enough unique qualities that would differentiate them from others. For example, photos of coins are generally not copyrightable unless there are unique angles, uses of light, or other qualities of a "creative" nature. Friedman argues that, while Garcia's photo may contain some elements -- though he also argues they are minimal at best -- Fairey's artistic rendering virtually removes them: that Fairey's image has few, if any, copyrightable elements. His article states, "the poster entirely changes these details by transforming them into a stylized combination of red, white, and blue. Moreover, it is plain the colors of the photograph are in marked contrast to the colors of the poster."

Friedman's logic concludes that if Fairey's photo has no copyrightable elements, then how can such a work infringe on any other work?

While an intriguing question, one that I hadn't heard raised before, the artist in me has a hard time buying into the notion. Fairey's is a very identifiable style, one that Friedman himself applies to his own image, as shown here.

Not only does Fairey's rendering enjoy its own protection under copyright, but the fact that it was derived from Garcia's photo means that Fairey's ability to use the work is limited. No one disputes that. Where the real argument begins is discerning the conditions where Fairey is limited, and where he's not. That is, unless he gains permission from Garcia, Fairey's use of his own rendering is limited to "editorial" uses, such as artistic display, political or social commentary, satire, and so on. On the other hand, "commercial uses" require Garcia's consent, such as when the image to advocate a product or service, or to promote an idea, including political or religious points of view. These are the types of uses that define "commercial use" as described by most state publicity laws. Granted, publicity laws and copyright laws are different, but the definition of terms are consistent.

And herein lies the ultimate question: is the Fairey "Hope" poster a form of protected political speech, or a commercial use? As Friedman points out, political speech is at the heart of the First Amendment, and people's right to express themselves--especially on matters of politics--is always given deference by the courts.

While a true statement, it's not quite that simple. Just because the Fairey image has been used in a political context does not necessarily imply that it's "political speech." And even if it is, the greater question is whether you can appropriate anyone -- or anything -- as a tool in that speech. For example, if the Fairey image were of a recognizable factory worker holding a hammer, and that person was an ardent Republican, we can be very sure that this person would sue Fairey for suggesting that he was an advocate for Obama. And the courts would not even begin to entertain the notion that this use of the image was "protected political speech." The First Amendment has its limitations, and this is such an example.

Although "property" (such as a copyrighted photograph) does not enjoy the same protections as people's rights of publicity, the point of the example was more to illustrate that the use in question is would fail a critical Fair Use test: it's an advocacy piece, and when advocating a political idea, you cannot misappropriate someone's likeness or their property without their consent. The ideas, opinions and expressions have to be yours, and yours alone. You have the right to express an opinion about someone in a political context, but misappropriating their property (or someone else's) for that purpose is not the same thing.

What if Fairey applied his artistic rendering technique to the Pepsi logo and added the phrase, "Obama's Generation." One can imagine that Pepsi would not take so kindly to having their logo misappropriated in such a manner.

Now, if Fairey's work were merely a piece of art hanging in a museum or an art gallery, courts have deemed this as Fair Use, regardless of the price that it may command, or even whether he copied it directly from Garcia's photo. ("Commercial" use is not not measured solely by monetary consideration.) Yes, one can appropriate another work, a person, or a logo without their consent, for purposes of artistic expression.

But which is the Fairey image? Protected art form? Or an advocacy poster? We have competing notions, but which carries more weight? To reconcile this logjam, courts often take into account is the predominant use? Is it used more as an art form? Or as a form of advocacy?

Or is Fairey just out to make a buck?

Getty and Flickr: Prophesies Coming True?

2010-06-28T10:37:00.000-07:00

People have been emailing me copiously, asking for a statement in response to the new relationship between Getty and Flickr, where Flickr members and visitors can work with each other through a new program with Getty Images called “Request to License”. The details of this program are listed here. From that page:

When a prospective licensee sees an image marked for license, they can click on the link and be put in touch with a representative from Getty Images who will help handle details like permissions, releases and pricing. Once reviewed, the Getty Images editors will send you a FlickrMail to request to license your work, either for commercial or editorial usage. The decision to license is always yours.

Why are people asking me about this?

For years, I've been proposing that precisely this model be implemented. Most of my blog entries in 2007 and 2008 articulated this very model. The first was on Feb 13, 2007, in an article titled, "The future of photo sharing sites and agencies". There, I predicted the inevitable convergence between companies like Getty and Flickr:

I believe it will invariably happen that major photo agencies like Getty and Corbis can (and should) move into the consumer market. Consider what would happen if major stock agencies expanded their businesses by opening the flood gates and letting everyone in. By removing the barriers that require photographers to "submit images," and having a separate portion of their sites be entirely open, much like other photo-sharing sites are, they would give more options to buyers, and provide more opportunities (and greater incentive) for photographers to join at all levels. Getty owns iStockPhoto.com, which is a microstock agency that sells images for much less, but this is not a consumer-based, social networking style photo sharing site like flickr is.

The key here is in italics: microstock agencies are not social networking sites, they are therefore limited by both buyers are sellers than the social-networking sites. My premise for this logic is based on my years of research showing that 80% or more of licensed images is peer-to-peer, directly between buyers and photographers, not among agencies. You can read this research in the article, "The Size of the Photo Licensing Market"). The summary of that research is this basic truism: Most buyers find images on non-stock agency websites.

On Feb 18, 2007, I wrote how the photo-sharing and social-networking sites can capitalize on this opportunity in an article titled, "Two-Phased Approach to photo-sharing/licensing model". I said:

Phase One of this business will be where a photo-sharing site merely allows visitors to license images directly from the site. Phase Two will involve the distribution of the same photo assets to other sites, much the same way online ad sales are hosted (or "published") on other websites. ... For the sake of discussion, I'm going to assume that the approach ultimately adopted is the one I've suggested in the past: make it pure and simple by giving the user a toggle for setting whether his photos are (or aren't) permitted to be "sold".

And that's exactly what Getty and Flickr are doing now. Over four years later.

You may note that I said there was a two-phased approach. That second model will eventually become part of more photo-licensing business models. (In fact, it already exists, but among companies too small to get anyone's attention--partly because the technology and business models they've adopted do not properly understand and implement the true nature of photo licensing, copyright issues, and potential target markets. This is an aside for the moment; it may come up again when larger players eventually begin to consider the opportunities.)

Speaking of predictions, I remain steadfast in my opinion of the inevitability of what happens next:

In July, 2007, my blog post titled, "The Solution to Getty's Woes" explained how Getty can get out of its financial troubles by simply buying Flickr directly from Yahoo and using it as the main stock licensing engine. The article got into exceedingly detailed analysis of Getty's financial model (and troubles) combined with the explosion of available imagery on sites like Flickr that make this solution not only obvious, but inevitable.

On a directly related note, I called into question the life expectancy of the Creative Commons in this article (2008), where I again proposed that Flickr allow users the option of choosing between allowing their images available for free via CC, or to get income from their images. I said,

...it begs the question about whether enough people would choose the option to "make my images free"(CC) if it were next to the checkbox that says, "pay me a quarter if someone's dumb enough to buy it."

And then there's the buyer. If they were given the choice between "free images, with disclaimers and risks" and modestly priced images without such risks, it wouldn't be very likely that the "free" versions would be chosen very often.

The concept of CC would never survive under these two conditions.

Without getting too far afield, I have no qualms with the CC, per se. It's more about how simplistically it's been designed and deployed. It's just not sustainable in the real world business market. The problem is not the "license terms" and the structure of the legal contracts--those are all just fine. It's the fact that the system can be gamed so easily by both buyers and sellers, that it's too unreliable to be sustainable beyond a small handful of casual users (by comparison to the larger market of stock imagery). The true protections for both buyers and sellers is to leverage the copyright registration mechanism. That is, creative commons images that are also registered with the copyright office lowers the risk both both buyers and sellers, as explained in that article. Since no one is building copyright registration into their online business models, and the CC itself has a fundamental objection to the concept of copyright in the first place, the CC will be relegated to an historical footnote , bringing strength back to the for-fee licensing model. And which brings us back to why I'd always argued that Flickr should have enabled image licensing.

So, why is this all good for the photo licensing industry? I articulate this answer in the blog entry I wrote on March 15, 2007 in the article titled, "Photo-sharing-licensing sites leveling the playing field."

As more companies engage in the business of licensing images, photographers with credibility will gravitate to the sites that offer a better return on their money... In a way, this is how photo agencies started in the very beginning, only better: because photographers don't have to be "accepted," the playing field is much more level, and the market forces can be more free to let the money flow to those who really do merit the higher earnings (rather than at the whim of photo editors). The buyer, it turns out, is the best photo editor, and it will be pretty clear in short order which sites are hosting good, honest content.

I summarize with another excerpt from that article:

...the most basic, fundamental truism about photography remains: there are more people who have it as a hobby than as a profession, and the barrier to entry is low... the honeymoon period for Getty will end once photo-sharing sites become new outlets for photographers where the open market can decide their rates."

Model Releases: Pro Models and Their Agencies

2010-04-21T10:59:00.000-07:00

I got an interesting email from a fashion photographer that warrants some discussion:

A model agency booker recently wrote to me saying: "But if you want to use the images for editorial use, we ask that you ask us first before agreeing to the usages used for that magazine. In fact, all magazines require releases...even for editorials. That's where the release will come into play."

First, the quote that you included from the agent is a bit misleading, though he might not be aware of it. That magazines "require" releases doesn't mean that they "are required" to have a release for publication. It just means that many magazines have a policy to only publish released images, even though one isn't actually necessary.

As I will discuss, this creates more liability for them, not less. It's also a great disservice to the industry because it perpetuates incorrect information about how and why model releases work.

First, let's talk about context: Fashion photography is different from grab-shooting in the street because someone is specifically asked to pose in a controlled and staged environment, and to take specific pictures for a specific purpose. The model is not subject to a condition where he or she can be photographed "without being aware of it," like on the street. Instead, the model is only willing to do it in exchange for something. For example, money.

Now, if it were just money, that's one thing, but in professional fashion photography, it is often the case that models also insist that you (the photographer) and your assigns (those to whom you license the images) only use the photos for a specific purpose.

It's the phrase "..and your assigns..." that you will need to think about. I'll bring it up again soon.

What makes this situation different insofar as model releases are concerned is that the model has stipulated the uses of the images -- not the photographer. Thus, the photographer is now assuming liabilities. This is atypical for most photographers, who are used to being the ones who spell out the terms of the model release (and ask the subject to sign it).

In this inverted photographer/model relationship (from the norm), focus is now centered on the models themselves: they are the ones that are seeking protection...in this case, their professional careers. They don't want images of themselves used in ways that might compromise their modeling relationship with particular designers, advertisers, or even editorial relationships. They also need to control how they are portrayed in the press to the degree that they can. In this case, if they are going to be wearing clothing that would not bode well in publications, they would not want those photos to be published. That's why they are eager to assure that the photographers that take their photos are restricted in what they can do with the images.

If the model has an agency, those agencies would (should) instruct their clients (the models) not to attend photo sessions without requiring the photographer (or other agents there) to sign the agency's release.

Now I get back to the quote from the above agency representative, where he says, "for editorial use, we ask that you ask us first..." He can't enforce that without strictly saying so in the contract the photographer signs. That's why he says, "we ask..."

But, if he truly wants to enforce that policy of "ask first", he should stipulate this requirement into his template model release agreement that photographers sign. An even stronger provision is simply to state up front that the photos "can only be used under specific conditions," such as for a particular magazine, in a particular story, to be published on a particular date. By definition, this would exclude all other uses--including editorial.

Liability
Given all that, where does liability reside if the photo ends up somewhere else that isn't covered by that agreement? What about that editorial magazine?

Answer: it all depends on the language inside the model release.

If the photographer signs a release that lists specific uses only, and the photo ends up in an editorial story not covered by that release, the photographer--not the publisher--is the first in line for liability: he violated the contractual agreement.

What about the magazine? Aren't they liable too? Yes, but only if they were assigned the images and were made aware of the restriction of use ahead of time. That is, if they knowingly published an image in a manner that they knew was in violation of an agreement that they are a party to.

That's a big "if", and one that can easily be avoided.

Strictly from a legal perspective, it is in editorial publishers' best interests to not ask for model releases from photographers, because that would then make them aware of restrictions that they would then have to comply with. Any lawyer will advise clients never to assume liability of someone else's contract, even if it looks clean as a whistle. It just wraps you into the same risk as the photographer. This is precisely why most newspapers and other top-flight periodicals not only never ask for model releases, they indemnify themselves from any obligations that the photographer might have agreed to with the subject of a photograph.

So, let's say the photos are used in an editorial article on a particular line of clothing where the model does not have a relationship with the designer, there could very well be many displeased parties. In this case, the liability is not held by the magazine: it didn't violate anyone's privacy because it didn't perform the act of taking the pictures (or pay for it), nor has it violated publicity rights because the magazine or article is not a paid advertisement by the designer. Assuming that the magazine simply got a hold of the photos without agreeing to be "assigned" the image under typical license terms, it is entitled to publish them in an editorial context under the protection of the First Amendment.

That editorial publishers of all sorts even ask for model releases (or property) releases is silly -- they assuming more risk by doing so.

This is not the same as commercial publishers, of course. For example, if the same image were published in association with an ad for another product not covered by the agreement, that company would be liable for violating the model's publicity rights, and the model could sue that publisher for damages. The model would also sue the photographer (again, for violating the contractual agreement), but this is separate from the commercial publication of the image.

Remember again, this all falls under the premise that agencies and their models only agree to only be photographed under conditions where photographers sign releases that have language restricting the use of images to specific publications and uses.

No (or vague) Model Releases
Without such specificity, rights of the model and the agency begin to erode. On one extreme, there are very open and vague release, such as the ones most photographers clip out of books (including my book on model releases). Most pro models won't (or shouldn't) sign these, unless they are early in their careers and are still establishing themselves. (Once you become more well-known, you will then have a stronger brand that you will not only need to protect, but will also have more opportunity to capitalize upon by commanding a higher price for publication rights of yourself. Even editorially.)

If there's no release at all, then licensing an image to an editorial publisher is risk-free. That is, judges would assume that anyone that willingly sits in front of a photographer without a written release has willingly waived his rights of privacy. (This has nothing to do with commercial publication, however. Licensing is still permitted, because it doesn't violate a contract. Publication is a liability born by the publisher. For more information on this, see Model Release Primer.)

If a subject has an issue with an editorial publication of his image, it's usually the case that things are a bit messy. If someone were to bring a complaint against a photographer or publication, some kind of harm must have been done. (If no harm has been done, and no release has been signed, it's a losing case.)

If harm has been done, and no release is signed, a judge will gather other facts, such as an email that might have been sent beforehand saying, "Ok, I'll do the photo session for $50 if you promise not to publish them on your website." While a court is permitted to take this into account, it isn't an open and shut case--the judge has to weigh the two factors between the verbal agreement and the degree of harm that's been done. You can imagine extremes on your own. If it's a toss-up, courts (in the USA) generally give deference to First Amendment rights -- the right to publish -- over publicity rights. The hardest ones to judge are those that involve publication rights and privacy rights.

Good luck with that.

The summary is that professional models should almost universally be trained to provide their own model releases, but do so judiciously. If you're too restrictive, no one will want to work with you, nor will anyone pay you. (Remember, you have lots of competition.) Photographers don't necessarily "need" releases to protect themselves, but those releases will make the marketability of such images much better.

If both the model and the photographer have releases and there's a stand-off, it's time to negotiate: find what each party "needs" from a financial point of view. Don't worry about "liability." This misperception that releases are there to "protect" photographers has kept many photographers from capitalizing on their photo assets. Negotiation should really be about the scope of publication: use, geographic, and term (expiration time). Oh, and money. :-)

2009 Year in Review: Web Optimization

2010-03-24T00:44:00.000-07:00

In this second segment of my series, "2009: Year in Review," I discuss issues related to managing my web presence. Some of these methods directly result in income, such as advertising dollars, whereas others indirectly affect income, such my ranking in search engines or by directing traffic towards monetizable content. Nothing discussed here addresses my actual sales and licensing methods, which was addressed in Part 1 of this series.

Web Traffic and Advertising

Traffic to my site has marginally increased by 16% from the same time last year (2008). More specifically, I averaged about 15,000 visitors a day in 2009, but the number would have been much higher had it not been for a technical mis-decision I made during the summer months that dramatically dropped my rankings, which had to do with "keyword stuffing", discussed later. Normalizing for that, my traffic has been pretty steady at around 16-18K unique visitors a day, compared to 14-15K/day in 2008. (Stats can be seen here.)

While that may sound impressive, it's not that simple. There are a number of devils in the details, and sifting through the data is only half the battle. For example, the bounce rate (the rate at which people leave my site after viewing the first page) rose to 8.5%, and the average time on site dropped by 11%. In other words, people are leaving my site sooner than before.

One would think that this is a bad thing, but there's other data that suggests otherwise. For example, advertising revenue more than doubled; in some cases (some pages and topics) tripled and quadrupled. All those people "bouncing" away without spending time on my site are clicking on ads. For 2009, advertising revenue jumped to represent 17% of total income.

One might say that I'm losing potential buyers to advertisers, but that's not what's going on. Most of the ads on my site are not for photography prints or licensing, which is the lion's share of my online transactions. That is, people are clicking on ads because they decidedly do not want anything I have to offer. I don't care that they leave; it just so happens that they're paying me a effective "exit tax." Or rather, the people who are getting my traffic are paying that tax.

Indeed, this turns out to be mutually beneficial: advertisers whose own sites don't rank well for some search terms, actually get a lot more relevant traffic from my site than they would if they paid to get onto Google's search page directly. That is, they'll pay ten cents to a dollar per click to put an ad on my page (through Google's adwords program), compared to twice or three times that much to put the same ad on Google's search results page. They may not quite get the same number of total traffic, but they'll get much more relevant traffic that converts to revenue if they place those ads on my site (or any of the other top-ranked sites). This kind of advertising-indirection costs them less, they get better bang for the buck. Best of all, I get a cut of it. :-)

I should point out that this isn't always so straightforward for advertisers, because targeting a specific site can be costly (in the form of lost opportunity, not necessarily money) if that site isn't consistently well-ranked. That is, if they target a site that appears to rank well sporadically (because their content changes), they could get a boost of traffic for a short time, and then go dark. Since my site has been around for a long time and is generally stable, this risk is not a concern.

In fact, many advertisers come directly to me and pay me to put their ads on my pages, rather than going through Google. There are advertising aggregators that have clients that pay them to do this analysis, and my site is coming up more often in their radar. My advertising rates are not based on clicks or impressions; they're flat fee rates, which advertisers like a lot for a high-traffic site like mine.

This then begs the question: what was the actual end-user looking for that they landed on my site, even though I didn't have what they were looking for? Why am I ranked so highly for them? Isn't that a problem with the search results?

First of all, the bounce rates are still quite low. Google does accurately put users on pages that match their searches. Of the low number of people who bounce, it's usually because they used the wrong search terms in the first place, and Google couldn't possibly know that ahead of time.

Take the Olympics in Vancouver, for example. If you search for "photos of vancouver", I'm currently ranked #8 on Google. (Before the Olympics, I was ranked among the top three.) So, I get a lot of people looking for olympics photos, even though they didn't use the term, "olympics" in their search query. When they don't see such images on my Vancouver page, users click on an ad that gets them where they wanted to go.

Vancouver is only one of a long list of examples. At the moment, I score very highly for phrases like:

"black and white pictures" (Google Rank: #4)
"what kind of camera should I buy" (#6),
"learning photography" (#2)
"photography business" (#1)
"model release" (#1)
"star trails" (#1)
"fill flash" (#1)
"photographing people" (#1)
"selling prints" (#1)
"photography marketing" (#3)
"sahara desert" (#5)
"stairs" (#6)
"photos of doors" (#1)
"photos of new york city" (#3)
"photos of san francisco" (#1)
"photos of kids" (#1)
"photos of united states" (#1)
"photos of patagonia" (#3)
"photos of cuba" (#1)

These are but a few among hundreds of phrases that Google ranks my site and/or pages among the top-five. But the key is that these terms are generic and they themselves do not bring traffic that can be attributed to a single dime of sales revenue.

While they are good for generating advertising revenue, there's an even better benefit to ranking high for generic search patterns: Non-buyer traffic out-strips buyers by orders of magnitude, and any traffic--buyers or not--contributes to the overall ranking of my site. When people search using more specific terms (for content that they do want to purchase), my site will rise in those search results, yielding sales.

So the objective is to have as many pages rank as highly as possible. One key strategy here is that I don't particularly care to rank highly for any single or small set of search terms--that doesn't necessarily benefit me. It's just having my site itself be indexed well for whatever content the search engines deem appropriate. And therein lies the question: how do they determine what search terms should send users to my site? Since they cannot determine what's inside of a photo the way a human eye does, search engines look for other clues to determine the content of a page that otherwise has very little text: metadata.

Keywording

I've blogged before about keywording; it's a huge topic. I'm not going to reiterate points I already made, but to appreciate how and why I employ my keywording methods, you need to at least understand this very basic set of truisms:

Most image buyers use search engines first, stock agencies second.
Search engines act like "metasearch" for all the stock sites, as well as many other image sources, including mine, yours, everyone else's. It's best to use keywording techniques advised by search engines, not stock photo agencies.
Search engines are intelligent about search queries.
Unlike days long ago, they know all the synonyms that are related to a common root. So, you do not need to include the singular and plurals, all the variants of "dog" (canine, puppy, pooch, etc.), and so on. What's more, intelligent search is becoming more common, even among stock agencies. The need to stuff your images with synonyms and other related keywords to make your list "more thorough or complete" is gone. In fact, attempting to do so can backfire on you. (More about that later.)
Controlled Vocabularies are a complete waste of time.
There was once a time when such lists were useful, because it made the job of image search much easier for unsophisticated (brute force) search algorithms. Controlled vocabularies helped you use a small, consistent set of words, which kept you from using dozens of similar words that might come up with different search results when the user input search queries.

While that premise was useful, it only addresses half the equation: the weakest link in search is not you, it's the end-users. Or rather, the search queries they submit. These people are not going to conform to controlled vocabularies. So, in order to map their queries to your images, their input text has to be converted to root words anyway. If the search algorithm is going to do this to end-user queries, it can (and should) also do it with your keyword list. Forcing you to conform to a list becomes a waste of time.
Keywording should take only a few minutes and minimal thought.
It's very easy to over-think how people might find your images, or to worry that your images might not be found if someone uses a series of queries that you didn't think of. But this kind of over-thinking can negatively affect if and how your images are found. End-users learn very quickly to be very conservative in their search queries, or they will get a lot of irrelevant results, rapidly wasting their time. They may experiment with creative, conceptual, or "refined" queries to see what they get, but it doesn't take long to learn to "keep it simple." So should you. Keywords should include only the most basic, obvious, and prominent items in the photo. Search engines also rank the quality of photos (and the sites that host them) on their brevity. More than ten keywords will diminish a photo's rank because it usually means that someone is going to stuff the keyword list with unrelated words in an attempt to game the system. This is a common technique among photographers who submit their images to dozens of microstock agencies who do not enforce such restrictions, and who use brute-force (letter-for-letter) search algorithms. Keyword stuffing--also known as "keyword pollution"--has proven to be effective for such photo sites because it allows those images to be found ahead of other, potentially more relevant results for any given search.

In fact, I fell victim to "keyword stuffing" myself midway through 2009. In my automated keyword algorithms, which normally strips redundant or "similar" keywords, I had thought I was being clever by adding in location information (city, state, country) into the keyword list. Yet, what I found was that because the IPTC data already had these keywords, which search engines tap into, and because my keyword list grew (unnecessarily) by three more words, this dropped my rankings down by several notches, which kept me out of the "top fold" of search engine results. It's a huge deal dropping from #3 to #6 or #7 for a given search term, and you can see the results of this in my site traffic data over the summer of 2009.

Needless to say, this cost me quite a bit in traffic, which affected every other aspect of my business, from sales to advertising rates.

You can imagine, therefore, that "effective keywording" (so that images and website are deemed "credible" and ranked highly) is a hotly debated issue in the photo community. It's also one where entrepreneurs try to come up with solutions--some good, some not so much.

One example is a product "imense annotator" (annotator.imense.com), which has some interesting ideas, such as an image-recognition algorithm that tries to guess keywords that might describe the people in an image. It will do a reasonable job in ascertaining the ages, sex and ethnicity of people in a photo, and then attach those keywords to your images. Clever, and possibly quite useful more to a stock agency than an individual. This is because agencies have millions of images to process, none of which have been (or will be) seen by company staff. On the other hand, original photographers that shot the images could do this task quite easily on their own. One can only shoot so many images in a day, and since one has to eventually go through a manual (if not minimal) keywording phase anyway, one can assign the keywords associated with the "people" photos as part of that process. This shouldn't be all that time-consuming for reasonably well-disciplined photographers. And human analysis on such things is always going to outperform a computer. (Yes, I say this as an active programmer.)

(Note: The annotator only does people/facial recognition.)

All other aspects of annotator look and sound cool, but are considerably less effective in practicality. Again, these include "commercial vocabularies", "crowdsourcing" and "controlled vocabularies." As noted earlier, these ultimately contribute to the perils of keyword stuffing that search engines don't like--and which only serve to confuse stock agencies' less sophisticated search algorithms.

Another thing to keep in mind is keywording is often done once, and then you never touch those particular images again. Therefore, whatever you use as keywords today are likely to stick with your images long into the future. But technology doesn't sit still--especially image-recognition and search algorithms. For these, time has a tendency to speed by rather quickly. Before you know it, most search engines will be incorporating the same sort of algorithms like the annotator above. In fact, Google's own image recognition features are rather well developed, and can be seen in action if you use their Picasa image management solutions.

In any event, the point is that keywording is a classic case where "less is more." Images should have minimal base tokens in the keyword list; the search "intermediary" interprets the uncontrolled end-user queries and maps them to the minimal keyword list in your images. This is and will always be the most effective way for images to be found.

While I don't necessarily fault software companies for coming up with creative ways to "enhance" keywording, I draw the line when companies actually recommend methods and behaviors that are wholly counter-productive. An example is Cradoc Software's latest product, fotoKeyword Harvester, a product that does a form of semi-automation of keywording your images. While I am a fan of the company in many ways because it tries to also be the photographer's "coach" on many vital business matters, it has never been on the forefront of the photo business--rather, they seem to be stuck in the 1990s with many of them. Alas, most of their advice, while applicable 10-15 years ago, is well behind the times today.

In the case of the Keyword Harvester, the company sent out an article titled, "best ways to keyword images using concepts and attributes." A quote is: "You'll need to start paying attention to how images convey messages in advertising." They say:

One of the most valuable types of keywords for an image are things called Concepts. A concept is a term that describes non-concrete aspects of your image, an abstract idea. Concepts are used by advertisers to sell their product with the use of your image. They want the consumer to think of something specific when their product is thought of. (...) For example: Wells Fargo Bank uses images of cowboys, wagon trains, horses, and the wild west to promote their business. The concepts for these images are: excitement, freedom, trust, historic, strong, powerful.

There are several problems with all this. First is one I highlighted above in my bullet list: photo searchers (commercial or not) do not use conceptual search terms very often--at least, not with much success as they once did when the stock industry was far smaller, before digital images, and before the internet--a time when almost all stock sales were dominated by Getty Images. Back then, yes, conceptual keywords worked. And this was because Getty internally controlled all keywords for all images. Also, they had their own intelligent search, and they controlled the images in their databank.

Today, images are found in many places, are keyworded by arbitrary staff--or worse, photographers--and the consistency is impossible to centralize and manage. The direct result is that photo buyers don't search the way they once did. (This is an example of Cradoc seems to be stuck in the 1990s.)

It's easy to put this to the test: go to images.google.com and search for the "conceptual keywords" that Cradoc said represented the kind of themes Wells Fargo uses in their imagery. I tried every word on their list, as individual search terms, in pairs, in triplets, and as the entire group. Not one single set of results from these queries contained images that would ever be used by Wells Fargo. They are totally unrelated to all their business models. This is not unique; it's rarely ever the case that conceptual keyword searches yield desirable results. That's why most searchers don't use them anymore.

By contrast, if you search for images based on the actual elements used by Wells Fargo imagery -- cowboys, wagon trains, horses -- image search results show many images similar to those the bank actually uses.

Again, the lesson: keep it simple. Don't get clever. Do not try to anticipate what the searcher might use as search terms. Photo researchers are more afraid of you than you are of them. They are going to keep it simple, too.

I can verify this with my own statistics: My site gets about 19,000 search queries a day on my own search pages. Of the search terms I get, 99% are for very specific items. Furthermore, when someone actually licenses an image from me, and I track their search patterns that lead up to the sale, it is never the case that people use conceptual terms.

In preparation for this article, I interviewed one particular client about how he tends to search for images. He said, "I found that sites are so inconsistent about search terms, that I've learned not to use big words. Just be as specific as possible to the actual things I want to see in a photo."

When I asked him how he chose the particular photo he licensed from me, and what search terms he used leading up to it, he said he wanted a "futuristic landscape." When he tried that phrase (and derivatives, such as "future" and "cityscape") on Google, Getty and Corbis, he got nothing like what he wanted. So, he just got specific: "glowing buildings", which lead him to the image he licensed from my site, which can be seen here.

Keywording Methods

So, let's get to brass tacks: how should you keyword your images? Google has a document called, Google's Search Engine Optimization Starter Guide, which includes tips on optimizing your images for search. It all boils down to:

The image's filename should include the most relevant elements of the image.
For example, if it's a photo of a boy and a dog, use "boy-dog.jpg". If you have many such images, use sequences: boy-dog-1.jpg, boy-dog-2.jpg, etc.
Use keywords sparsely.
The more keywords you try to associate with an image, the more you dilute it, bringing down its "rank" and relevancy (and credibility) with search engines, or with given search queries. This is because search engines use two key metrics to determine how well a given image matches a search parameter: the ratio of matches between an image's keyword list and that of the search query, and the filename of the image. For example, if the user entered the query, "boy and dog", the search engine sees two words: "boy" and "dog." (It throws out filler words like "and.") Here, the image named, boy-dog.jpg has a 100% hit ratio of query terms with keyword terms, and the keywords were in the filename. Note that the actual photo itself may very well be that of a fish and a boat. (Google doesn't actually look at that, because, well, it doesn't know how.)
Avoid using synonyms and other "related" terms in keyword lists
That is, do not attempt to be thorough in describing images with keywords. That's not your job. Search engines already know how to do that. They've got thousands of programmers with PhDs doing that for you (and for the end-user). The more you try to "help," the more you're actually interfering with the process, which reduces your relevancy and ranking.

The good news about keywording is that proper and effective use of keywords is extremely simple and shouldn't require much (if any) thought or time. Using myself as an example, my workflow involves two phases: the edit phase (where I rename all my photos so that their filenames reflect their content), and the keywording phase, where I apply individual words to images--usually in very large batches.

For example, let's say I'm on a photo shoot of a boy and a dog. After editing out the stuff that gets tossed, I'm left with several hundred images, where I then name them just as recommended by Google: boy-dog-lake.jpg, boy-dog-bridge.jpg, boy-dog-1.jpg, etc. In order to assure the highest ratio of search queries to keyword terms, I try to limit filenames to two to six words, though most are either three or four. This is a difficult decision because if I use too many words, I may "match" more queries, but the ratio will be diluted. If I use too few words, I will rank highly for very narrow searches, but may miss more opportunities. This trade-off is a zero-sum game, so rather than try to game the system, I just be honest: determine what's in the photo, and use that as the filename.

Any words that may be "in" the photo, but seems to be less relevant are then added to the keywords list in the image's metadata. And even then, I rarely add more than two or three words, usually modifiers such as "young" or "funny."

Naming files is often very quick because most are batches of similar images. One only needs to browse a given gallery on my site to see the number of similar images that are shot together. The keywording process is similarly fast, also involving mass-assignment of specific, unambiguous words to large batches of images. My rule of thumb is that keywording thousands of images should take no more than 30 minutes.

Most any image-management software can add keywords; I happen to use Adobe Bridge, which is bundled for free with Photoshop or any of the creative suite products.

Note that if you inspect the images on my site, you may notice that they appear to have lots of keywords. Most of these keywords aren't actually in the images that I process--these are added later by an automated post-production algorithm that generates all my static html pages. I do all this to present hints to the end-user for suggested related search terms to stimulate new search ideas.

Maps

The newest addendum to my website is the use of Google Maps. Essentially, each of my web pages incorporates a google map to represent where every photo was taken. While it may seem frivolous, there's been great advantage to the maps. (It also wasn't entirely easy; Google set up the whole mechanism for the sole purpose of presenting maps based on specific street and/or mailing addresses. I have no interest in that level of detail; I just wanted to generate maps for generic locations, like city/state/country. Well, that isn't quite so easy because there are many streets named after cities, states and countries, and there's no way to tell Google maps that I'm not interested in street addresses, just general city maps.)

Though I instituted maps onto my site late in December, the effect its had on my traffic and ranking has been a surprise. Search engines seem to give extra boost to web pages that are geo-tagged--that is, they indicate location. When people search for images where the search parameters include a location, my pages get an additional bump. I've seen about a 10% boost in traffic two months after having introduced geo-tagging onto my web pages, and I look forward to seeing more data to quantify the extent to which geo-tagging has long-term benefits.

2009 Year in Review: Content Remains King

2010-03-17T14:42:00.000-07:00

In this first segment of my series, "2009: Year in Review," I discuss the role content has played on my business.

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 benefit—indeed, 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.

Assignments

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 charged—be it a lot or a little—is, 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 else—namely, 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 because—remember—the 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.

Still Photos

Over the past year, I've added about 30,000-40,000 new images, all
entirely from assignments. These include:

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.

Video

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 cart—buyers simply emailed me and asked to license images, and they'd send me a check.

Of course, that wasn't that unusual back then—few 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 mind—I 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 words—yuck!) 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.

Understanding Economics (for photographers)

2010-03-16T10:26:00.000-07:00

Of the emails I got from people in response to my article on the Prisoner's Dilemma (explaining how human behavior affects economics), two warrant public comment. One person said:

Photographers that take $200 assignments hurt themselves, disproving your thesis that people act in their own self-interest.

Ummm... How is it that we've established that they are hurting themselves? I personally have done assignments for $200 that involved spending 15 minutes photographing an individual for some personal use of their images. That's $800/hr., much better than most high-profile lawyers get. I've also done assignments for $200/day, but allowed me to get images that I was able to license for tens of thousands of dollars.

The truth is, such vague and open-ended propositions are, frankly, silly. Even entertaining the proposition of such singular and simplistic truisms about economics hardly warrants serious discussion. Therefore, those who do engage in these discussions are usually those who have the dual tendency of (1) believing the premise, and (2) of using it for political motivations. This creates a feedback mechanism where you do more of it... repeatedly and more passionately. The most immediate dividend is bolstering one's own image among the faithful. (See my article, The Economics of Controversy.)

It's not that people who dispel inaccurate economic theories are always intentionally deceptive. But there is a point where their own mental model of how things work becomes the filter by which all actions and statements are interpreted. If their basic premise is faulty, then this skews their perception of reality. Most importantly, it affects their ability to extrapolate simpler ideas into more complex ones, which would otherwise allow them to come up with effective economic forecasting tools. Is it really true that accepting $200 hurts yourself and the rest of the photo industry? Or does your intuition tell you that this is probably a bit simplistic? How does it strike you that most pro photographers believe this statement to be true?

And this leads to the other email I referred to:

Are there any important essays or textbooks that you think is worthwhile which distills a lot of what you have learned [about economics]?

I'd ruminated about this continually since I got it, and I'd even started (and discarded) several lists. Every time I come up with a list of great resources that help establish fundamentals, I then put myself into the mindset of an average reader (esp in the photo community), and I realize that it's not quite right.

For example, one of the items on the lits that I keep adding (and then removing) is PBS Newshour's Paul Solman. He is a "behavioral economist", and his continuing series on the Newshour program ("Making Sense" [of Financial News]) is must-see TV for anyone that wants to digest complex subjects down to the basics. To me, this is the easiest and most effective way to learn the fundamentals of economics, whether of a financial nature, or a personal nature. Yet, every time I send someone a clip from the show to explain things they don't understand, I usually get a response that their eyes glazed-over.

So, how do you teach economics to people who are predisposed not to understand it?

And that's when it finally dawned on me: There are two barriers to understanding economics. The first is to dispense with preconceived conclusions. Yet, this is often a paradox in itself. If your livelihood and financial future is at stake, there's a huge emotional hurdle that needs to be overcome to make sound decisions. It's like trying to teach good farming techniques to someone about to die of hunger: they don't have time or patience to wait a whole season or more for the next crop. They need to act now. They'll run towards the mirage on the horizon simply because it appears there's water there, despite the objective rational observation that mirages are well-known illusions.

The need for immediate results doesn't change the reality of economics. This is why I've always taught that photographers should never, ever enter into the business as their sole source of income. They should evolve into it gradually, until the income is more stable, reliable, and predictable. Anyone that complains that they aren't making enough money in photography has only themselves to blame for having dived into it before they were ready. There is no economic truism that others' actions or behaviors (such as taking $200 assignments) have hurt their careers.

The second reason people have these faulty notions about economics is more due to a primal human emotion: you're more powerful as part of a group than as an individual.

Since most photographers work for themselves, it's natural to assume that the best way to fight common adversaries is to unify: "all for one, and one for all". Once this mental model is in place, it becomes the sole and primary paradigm by which all observations are interpreted. Whenever anything comes up for discussion, it's no longer a question of whether the action itself makes sense, but whether it serves the larger goal of "unification." If someone accepts the $200 assignment, it's not whether or not it's a good idea, it's whether it supports the notion of unification.

Another common example is the question of "free." Studies continually show that "free" is the most effective marketing term ever. If you want to attract new business, use free somewhere in your marketing materials. Yet, most everyone in the photo community froths at the mouth whenever they see or hear about photographers taking assignments (or doing anything) for free. Naturally! As it runs counter to both the premise of "I'm hungry!", and "unification." Nowhere is the concept of "free" ever thoughtfully examined as a single element in a broader marketing campaign--an element used by literally every other business in the entire world.

Learning economic principles is one of the keys to developing good business techniques, including negotiating contracts, pricing products, marketing yourself, and other career-building practices. The good news is that the basic concepts of economics is really very simple -- almost intuitive. Indeed, the whole Prisoner's Dilemma experiment illustrates a truism about human behavior that should in itself not have to be explained--the lessons it illustrates should not only be self-evident, but one should be able to naturally extrapolate them to other models, such as the question about whether expecting photographers to stop accepting $200 assignments is actually achievable. One should not have to have an education in economics to intuitively realize that such a premise is impossible. Expecting masses of people to voluntarily resist accepting paid assignments is an unrealistic expectation of human nature. (The "genius" of the experiment is not so much the facts that were revealed, but that it could be explained so quickly and succinctly.)

For photographers to improve their own careers, and by extension, the health of the industry at large, they need to shift away from the notion that photography is governed by the same economic rules that apply to unions. Photographers cannot be expected to act in unison, and anyone that builds their business models on that expectation will be the first to fail. Secondly, understanding economics, requires an understanding human nature. The better you are at that, the easier and more intuitive economics naturally becomes.

Reminder: Cooperation is an Illusion

2010-03-14T04:00:00.000-07:00

Before I get to my series on 2009 (Year in Review), I feel compelled to repost an article I published in May 2007 titled, The Photographer's Dilemma: To Cooperate or Not?

I feel compelled to post this now because of a new swell of populist rhetoric in some blogs and discussion forums that preaches that photographers should stick together, and not take low-fee jobs (or work for free), because such actions bring down the collective value of the photo industry and encourage clients to expect more for less.

This very idea is pleasing to believe, and always goes over well with pro photographers, but it runs counter to many proven economic principles. One of the pinnacle truisms of economics is called The Prisoner's Dilemma, which not only shows that such cooperation never helps, but it actually harms those who cooperate more than those who don't. This famous experiment demonstrates the basic principle:

You and a friend have robbed a bank. You almost get off scott-free, except for an old lady who "thinks" she saw you, but isn't quite sure. The police round you two up, but because the witness is uncertain, you and your friend agree that the best thing to do is not confess anything. That is, by cooperating, you can each assure that you will both be protected. But, the twist is that the police place you into separate cells, and interview you separately:

"If one of you testifies against the other, and the other remains silent, the betrayer goes free, and the other gets 10 years in prison. If you both stay silent, we can't convict you on the bigger sentence, but we can get you on lesser charges, giving you six months in jail. If you both betray each other, then you both serve two years."

Each of you has two options: stay quiet, resulting in a lighter sentence for each of you. Or, defect from the pact. The table below illustrates your options:

	Prisoner B Stays Silent	Prisoner B Betrays
Prisoner A Stays Silent	Each serves six months	Prisoner A serves ten years Prisoner B goes free
Prisoner A Betrays	Prisoner A goes free Prisoner B serves ten years	Each serves two years

Because you're in separate cells, you have no idea what your friend is going to do. But here's where your mind plays logic games. If you knew your friend would stay silent, your best move is to betray, because you then walk free instead of receiving the minor sentence. If you knew your friend would betray you, again your best move is still to betray him, as you receive a lesser sentence than by remaining silent. Of course, your friend will think the same thing and therefore also betray you. Yet by both betraying the other, you both get a worse sentence than if you both stayed silent. So rational, self-interest plays into each of your decisions, making you both worse off than if you'd "cooperated" on the agreement by staying silent.

This experiment illustrates the most fundamental cornerstones of economic theory and has been tested in many different contexts, conditions, and demographics. It was originally conceived in 1950 by Merrill Flood and Melvin Dresher working at the RAND corporation, and became the basis from which John Forbes Nash derived his famed "Nash Equilibrium", which earned him a Nobel Prize for Economics. It has since served as the foundation for most businesses, governments, social policies, and many other aspects of everyday life because it reflects innate human decision-making. So long as there is no interfering body, policing of behaviors, enforcement of compliance, or any other factor to deter this natural human instinct, it is "natural" to serve one's own interests, and also to protect against harm from others by "betraying" them first.

If this is the case, why doesn't society collapse? Because we have an intricate and complex system of checks and balances. We have laws that keep people from stealing or harming each other, police to enforce them, social stigmas, and religious dogma, just to name a few. There's also the fact that society isn't necessarily a zero-sum game: people don't kill each other unless there's some gain in it. In fact, there's a great deal of self-protection in maintaining order and keeping peace.

What does this have to do with the photography business? Because there are more photographers than there is a demand for them. Therefore, it's a buyer's market: people will offer less and less, and there will always be photographers that will take it. Attempting to get photographers to "cooperate" is literally impossible. In fact, those who do cooperate will find themselves harmed worse, leaving an even greater proportion of those remaining unwilling to cooperate.

Unless there is a plausible, accepted, and recognized enforcement of compliance -- such as how laws protect worker's unions from both defectors within the union, and from companies to hire people outside ethe union -- it is literally impossible to effect change through mass cooperation. In fact, this is why union laws were created.

So why don't photographers form a union, or why doesn't the government set up some sort of pricing protection policy? The first answer is that photographers did have a union, but it was broken up in the 1970s for restraint of trade, which was triggered by two events: buyers were harmed because there was no competition in pricing. They had to buy photos only from union members, who, by law, were required to sell their photos at a set price. Secondly, photographers complained that they couldn't work because the union wouldn't let them in. So, too many people weren't working. A photographer's union caused far more harm than good.

As for the government setting up pricing protection, that's not its role or responsibility in society. It has never done such a thing, nor would anyone ever accept it.

Then there are those who feel that you just need most photographers to cooperate. But the Prison's Dilemma game has proven that the core, self-interest behavior has not only been established in small groups of people, but it has been shown that the greater the number of players, a smaller and smaller ratio of defectors is necessary to dilute the effects of the group. In any business model, whether it's a sole photographer, or a larger agency selling the work of thousands, this is this fundamental principle that instantly discounts all arguments made by photography interest groups that "sticking together" works. (That photo interest groups and educational systems continue to advocate this approach does more harm to those in the photo industry than anything else.)

In summary, photographers of today cannot possibly expect to achieve anything by attempting to cooperate with one another. Doing so will only cause more harm to those who try. Making money in photography is about developing a career, not by stringing together one paid gig after another. If you develop yourself as a professional, money comes, and you're paid on many qualities and skills well beyond "photography." If someone isn't willing to pay you more than the competition, you're either not worth it, or the gig is too simplistic to expect it. Real success is having a skill or quality that cannot be provided by the lowest bidder.

For a discussion on that, see Photography and Business Sense.

I'm now more valuable than Tiger Woods

2010-03-02T20:56:00.000-08:00

If my prior post (about my website being valued at $944K) hasn't made you puke with laughter yet, get ready for this:

tigerwoods.com is only worth $654,943.40. That's right, according to bizinformation.org, Tiger Woods' domain name is worth roughly a third of mine.

Good thing all those women from my past haven't come out and revealed our secret trysts.

On the other hand, such behaviors tend to help those of us in the arts. Hmmm.... maybe that's just what I need -- a little controversy to reveal my dark side. Or, in my case, I may actually have to get a dark side.

Sadly, I confess that I don't even have a simple "substance abuse" problem -- or, as they call it in my field, "performance enhancing drugs."

Hey, that's it! That's my controversy! I'm an artist that doesn't use drugs!
Let's see what happens to my site's valuation now! Mwahahaha...

I'm worth $1M now

2010-03-01T12:19:00.000-08:00

Someone forwarded me this link about the "value" of my website (danheller.com):

http://bizinformation.org/us/www.danheller.com

In short, the bizinformation.org says that my site is worth $944,079. They don't say how this value is determined, but one assumes that visitor traffic is somehow involved. If so, imagine how the value would change if their stats were more accurate. They estimate my traffic to be around 60K unique visitors a month, yet my web server logs show that, on average, I get just shy of a half million visitors a month. Their being off by 1 order of magnitude suggests that my site's value should be more like $10M.

I'm accepting offers. :-)

More seriously, this did prompt me to think about my site and terms that I never really talk about publicly. So, I'm going to produce a small series of posts (after this one) that discusses each of my various revenue streams in the context of 2009: a year in review, as it were. It turns out that last year, a great deal of long-past efforts started to materialize into actual revenue, so I thought I would report on them. Stay tuned.

That is, unless someone buys me out beforehand!

Interesting feedback to my "Climate Change" post

2009-12-20T21:34:00.000-08:00

I had an email exchange (and then a phone call interview) with someone that I found interesting and provocative. Here's the background:

Two postings ago, in Weathering Climate-Change Within the Photo Industry, I wondered what the reaction might be among a group that I call traditionalists (pros, trade organizations, pundits and bloggers) if it was substantiated that most licensed images did not come from pros, but were bought and sold on a peer-to-peer basis between everyday non-professional photographers.

Then, in the post that followed, Lying about Photo Licensing, I said that we are getting closer to actually learning the truth about the pro-to-consumer ratio in photo licensing due to advancing image-recognition technologies. In fact, because Picscout has already fingerprinted and indexed most images from all the major stock agencies, as well as the larger microstock sites, they could examine images on commercial websites and instantly calculate the ratio of images that came from a stock agency versus those that don't.

Remember, I'm not trying to find the number of images that are stolen, or that come from pros vs. non-pros. I'm only talking about the number that come from agencies.

If it turned out that, of all the images found on commercial sites, only 10% were known to come from stock agencies, it would turn the entire industry upside down. It would change everyone's perception of agencies' influence on everything from licensing control to price controls to how people promote themselves, career tracks, and most important of all, future investment. Attention would immediately be diverted to the question of where does that other 90% come from? Sites like Flickr (Yahoo) and other photo-sharing social networks would have representatives from major investment firms and stock analysts looking to buy them lunch and ask a few questions. And of course, execs at Getty would be getting phone calls as well, asking, "where the heck are you?"

So, then I get this email:

...Your suggestion that PicScout could put to rest the provocative question about what proportion of licensed images come from pros is a bit off. First of all, PicScout is hardly an objective source. It's sole source of income is from stock agencies, who themselves would not like to see such information become public if it turned out to be true. It'd be like cigarette companies agreeing to let its medical research data be released back in the 1960s. Second, even if PicScout were to do research, it's not like they're equipped to do objective research. Their list of commercial sites to search are carefully chosen to meet the objectives of their clients, the stock agencies. Are they looking at sites that are known to use agency images so they can be tracked and billed in an automated way? (PicScout's website says they do image tracking, which isn't entirely for the purpose of finding infringements.) Then there's the credibility of their image-recognition itself. There is no published information on false positives and false negatives. There has been no public scrutiny of PicScout's technology, unlike Google, for example, where objective observers can look at search results side by side with Yahoo and Bing.

Be careful of what you wish for: if PicScout were to actually do a survey, their results would be believed, despite these problems, and you would have a very steep, uphill battle, trying to dig your way out of this tainted study because the photo blogosphere would have a field day with you.

After this, the discussion went to the phone. He said that his company has financed research in the same areas I've blogged about: the trends of photo-based ads in magazines, pro-level camera sales, spot interviews with design firms, etc. And they have come to similar conclusions I have about the total size of the photo industry. But tackling it is very hard. It's not like finding a secret gold mine. Once anyone takes a new direction on the internet, all eyes are watching. And since this is only an area where a big player can go, no one wants to move till they know they can be way ahead of the pack when the others notice.

This prompted me to ask, "if you're speaking so bluntly to me about this, aren't you worried about word getting out to the existing stock agencies and other industry players?" To that, he pointed me right back to my own blog post, The Economics of Controversy: "there are just too many players with a vested self-interest in keeping things exactly as they are." He said, "You love talking about behavioral economics, and the stock photo industry is a researcher's dream. No one in the existing industry has either the technical or financial wherewithal to tackle a $25B market, but chances are, they will be quickly swallowed up and made small divisions within much larger companies that know how to scale up."

"Oh really... like the music industry? It's not as though they're dealing with the internet all that well," I replied.

To which he replied, "yeah, that's why everyone's scared to get started until they know they can avoid that problem."

Lying about Photo Licensing

2009-12-16T11:20:00.000-08:00

What was your annual income from photography last year? What was your average license fee? What kind of terms do you agree to? Do you ever give away work for free, or shoot an event gratis?

If you're like most people, your answers are highly unreliable, and most likely weighted towards the kinds of answers you would like to be true, especially if you believe you can give a "bump" in the right direction for the industry as a whole.

Unreliable answers from survey participants goes with the territory in the data analysis world, but in the photo licensing world, is it enough to distrust the underlying assumptions we have about the photo industry, such as the total market size, or the role of semi-pros and consumers?

The question rises to a new level given a similar awakening within the radio industry, according to this article in the New York Times (Dec 16, 2009). New, provocative and surprising insight about people's actual listening habits, versus what they claimed they were doing, has had dramatic effects on advertising rates, and even the existence of certain kinds of broadcasting.

According to the Times article, what has propelled the industry into a flurry of self-examination was a recent conversion from "measuring ratings through surveys to monitoring listeners electronically using so-called Portable People Meters."

Among the findings, the Classical Music market dropped by 10.7%, Talk Radio by 2.6% (and consists of 80% conservative commentary), and more people listen to "light rock" and "easy listening" than they ever admitted before.

"People tended to look at it almost like an election -- they would vote for the things they liked," said Jaye Albright, an industry consultant with Albright & O'Malley, a radio consultancy.

Classical music, being one of the largest music forms and radio station formats affected by the new data, is probably most closely associated with the photo industry because of the impassioned opinions by its own advocates. According to the Times article, classical music is perceived by its advocates as being an important civilizing force, and an "art form that is extremely related and important to our cultural history," Joseph W. Polisi, president of the Juilliard School, said.

But, as the objective and indifferent truth-telling meters indicates, strong belief in the culture and the importance of the art for does not necessarily translate to people's actual behaviors.

Saying you support a point of view, even though it's not backed up by actions, is one thing. Another is that people actually engage in behaviors they wouldn't admit to.

For example, more people listen to oldies, country and "light rock" than they have admitted in surveys. Especially men. In fact, under the survey format, 34.7% of men volunteered that they listened to soft rock, but when they were using the meters, it turns out that 40.1% did -- a 16% jump. This has a huge impact on the rates advertisers are willing to pay, and what stations are willing to broadcast. And this affects where investment goes, and so on.

Indeed, these discrepancies are consistent with findings within the television industry, when it moved away from volunteers hand-writing their viewing habits to being given electronic monitoring devices. As Arbitron (the ratings company) put it, "people overstate listening to stations they felt reflected better taste."

As an objective photo industry analyst, I immediately see an identical phenomenon in the photo industry. I've long argued that most in the photo sector use unreliable data collection methods, survey models, and sample sizes that have never represented the population at large.

To wit, most pro photographers and trade organizations cite two common sources for their industry data. Cradoc Software, makers of FotoQuote, a software application that helps photographers come up with tools to help price their work based on prior sales figures they collect from the industry. However, their data is collected from pro photographers who volunteer licensing information, which, as we should have learned, is highly unreliable. And it's made worse by the unrepresentative sample size of the population of those who license images.

Other perceived reputable sources include surveys done by trade publications like Photo District News, and those from Jim Pickerell of selling-stock.com. In those cases, data is collected from either traditional stock agencies or self-proclaimed pro photographers (as defined as someone whose income from photography is more than 50% of their total annual income). The fundamental premise here is that they are the prime and statistically viable representatives of the bulk of all licensed images.

This then raises this disturbing question (one that I've been raising for years): what should one make of his analysis if it turns out that agencies only make up 60% of the market? 30%? 15%? Or Less? Would stock agencies start focusing attention on consumers? Would non-photo related media companies start eying photo agencies and social networks as a new, untapped source for potential revenue? Might trade associations and publications shift focus to the consumer market?

Perhaps so, but they can't do it just yet. Knowing that something is wrong with the old data does not draw of map of what the correct data looks like. Real numbers still need to be gathered.

And we're getting closer to that all the time. Using image-recognition technologies from PicScout and Idée, the web can be crawled and images can be examined to determine their source. PicScout has the advantage here in two ways. First, they have already fingerprinted and indexed most images from all the major stock agencies, as well as the larger microstock sites. In one fell swoop, they could examine images used commercial websites and calculate this critical piece of information:

What ratio of licensible images can be attributed to a stock agency?

When I say "licensible images," I'm referring to image uses where there is no legal ambiguity. That is, I'm not talking about social networks, photo-sharing sites, personal web pages or other sites that might host images in a manner that could potentially be permitted under Fair Use.

(For the record, using someone else's photo on a photo-sharing site is not easily defined as "infringement" because it depends on how the image is displayed, or other claims made by the individual that put it there. Many such uses are protected under Fair Use, as they involve critique, demonstration, education, or other kinds of factors that may not constitute infringement. our goal here is to examine only sites where images use are not legally ambiguous.)

This quick snapshot of information might also give us a sense of which agencies are taking which slice of the pie. Are Microstocks really eating the mega agencies' lunches? What about the Creative Commons?

Obviously, this is not going to tell us about license fees, or whether the photos are sourced from pro photographers or consumers, or whether images were stolen or licensed. But, we can get a far more reliable picture of what percentage of commercial images are actually from stock agencies.

While PicScout is currently in the best position to do this analysis, and that the data is useful, there are caveats, as it suffers from two major setbacks: 1) it only examines "commercial" sites, and 2) it does not track real-time use of editorial images sufficiently to have a reliable effect on analysis results. These caveats are important because they cannot be used to draw conclusions about the industry as a whole--only about the use of commercial images buy commercial websites.

And while commercial images and uses are very important, it should be noted that the editorial market is far and away much larger than the commercial market for images, largely because more content is used, sites publish more frequently, and in larger volumes. It is also more common to use images from sources other than major stock agencies, since the abundance of such content is higher, license fees are lower, and liability risk for infringement is negligible. Gathering data about image use for editorial uses requires more frequent crawling, more frequent updates of editorial imagery served by both agencies and photographers and underlying technologies that PicScout does not say they perform.

But again, these caveats don't invalidate findings in the commercial sector. In fact, I think it'd be more like the quiet, soothing alarm one uses to wake up than the blaring buzzer of a dime-store clock. But either way you look at it, the industry does need to wake up, and this data can have the most sweeping effects on the general understanding we have about the photo industry like nothing we've seen before.

If so, what happens next?

In my last blog entry, titled, Weathering Climate Change within the Photo Industry, I posed the question, "How would the industry behave if it turned out that their assumptions about the industry was entirely wrong?"

Since it is fast becoming within our technological grasp to actually uncover this information, I strongly suggest that the pundits within the sector consider that question. Take a long, hard introspective look at such beliefs and consider how strategies would change if it turns out that its core understandings and assumptions are misdirected. It won't be long before even more advanced research methods will uncover even more detailed information, such as actual license fees, the role of search engines in the licensing path, effectiveness of keywords and other metadata, and so on.

This will raise the volume of that alarm clock even more. And there's a reason for such a clock: you don't want to miss the plane.

Weathering Climate Change within the Photo Industry

2009-12-11T10:00:00.000-08:00

Unless you've been hiding in the smog in LA, or deep inside a coal mining operation in Pennsylvania, or in an oil slick somewhere near Alaska, you've probably heard about the controversy over Global Warming. There's been a lot of bickering on whether it actually exists, but the key sticking point is what role humans have played in the process. Do they have a material effect on climate, and, if so, to what degree? Or is the world simply going through its normal cyclical swings that it's done for billions of years?

The answers to those questions dictate whether, and to what degree, we need to do something about it. But problem isn't so simple for many reasons and many levels. And it's the worst kind of problem to have because all the solutions are not only very expensive, but the consequences for the wrong decision--in either direction--can be dire. If the problem is real and we don't react strongly enough, global warming can have devastating effects on life itself. If the problem is overstated and we overreact by forcing new and expensive technologies and other changes upon world governments, there could be severe economic hardship that itself leads to worse conditions, such as social and political instability, which leads to famine, war, and possibly the end of Facebook.

Then again, we could just weather the storm till mother nature swings back to the kind of normalcy that we've become familiar with.

What does this have to do with the photo industry? Unless you've been hiding inside a darkroom since the 1980s, you've probably noticed that there's been a dramatic change in every aspect of the business, ranging from photo license fees, to distribution (the internet), to the legal and social sea changes. At the heart of this debate is what role--if any, and to what degree--has the "consumer" played in this climate change? And, how do we react to that? If consumers' role is real, do we alter our "best practices" recommendations as professionals, what technologies we use, how we deploy our imagery, who should represent us as an industry, set new strategies for pricing models? Do we actually embrace consumers as our partners as both producers and consumers of imagery within our business climate? Or, if the consumer's role is minimal, then how do we react to the deteriorating conditions we see?

Then again, we could just weather the storm till mother nature swings back to the kind of normalcy that we've become familiar with.

What the photography industry and global warming and climate change have in common is that they are excellent scenarios for those who study behavioral economics, the field of research that examines how cognitive and emotional factors affect people's decision-making. What people choose to do about global warming--or about the effects being felt in the photo industry--is based in large part by the backgrounds (and biases) of the participants. Odd though it may sound, the "hunches" that people use to make business decisions, stem from predispositions and prejudices shaped by formative events early in people's lives. They establish certain philosophical principles, which serve as one's compass in their business decisions. You don't see medical doctors successfully running cigarette companies, or vegetarians successfully running beef factories, or war pacifists successfully leading infantry platoons into combat.

The question for photographers facing the climate-change conditions within the photo industry is whether their predispositions would allow for taking those actions necessary to survive, unpalatable though they may be to their historical traditions.

We can forecast this in some way by examining how they handle discussions on key points germane to the fundamental issues being discussed. Do they hone in on these major points, or do they get mired in nit-picking unimportant details that don't affect the final analysis? What we find is that most disagreements are not really about details, but in the philosophical positions of the opposing side.

The true test of this can be seen when you ask people how their own views would change if they were faced with the hypothetical premise that their own position has been disproved. For example, how would climate-change skeptics propose we solve the global warming problem if we could wave the magic wand and say, "yes, humans are responsible for this, and the world is coming to an end quickly." Would they turn into born-again converts? Would they say, "You've convinced me. Now, let's put caps on emissions and force companies and countries world-wide to migrate over to clean-energy alternatives."

That won't happen. Of the discussions I've read in a variety of media, their response can be summed up this way: "How are we going to pay for changes that doesn't create a worse situation? We're already in a recessive economy, and this kind of investment will make it worse. Companies and third-world countries would harm the global economy worse than the housing bubble did in 2008, causing global economic collapse and massive unemployment, forcing companies and countries alike to swing in the opposite direction: migrating back towards the cheapest possible energy alternatives, which are more wasteful and harmful than today."

Then there's the other side of the argument: What would the climate-change advocates say if their premise was disproved? That the world's climate is doing whatever it will do, irrespective of human activity, and nothing we do will alter it. Do you think they would swing over and say, "Well, Ok then, let's just keep going on the track we're on."

That won't happen either. They'll say, "It's got more to do than just climate. All sorts of human ailments ranging from cancers to other diseases are the result of waste byproducts in the air, water and land. There are unsafe working and living conditions in every country in the world, not to mention the huge costs in clean-up efforts. There are lost economic opportunities in producing new clean-energy production, not to mention the future technologies developed as a byproduct of research and development. And then there's just the plain aesthetic toll on the environment. Waste is ugly, which itself affects social growth, initiatives and investment."

The truth is, there's legitimacy on both sides of the argument, but it's gotten so heated and partisan--as has our culture--that people feel compelled to simply dismiss the other side's ideas out of hand, and just argue minute details instead of substance.

This is why I try to avoid point-by-point arguments with people who have fundamentally different philosophical foundations. It's not that I disrespect their positions or philosophies--reasonable people can disagree. But discussing such things in an open forum can be fruitless because, even if there were hypothetical agreement on certain facts, opposing sides will simply argue any and all points.

For example, in a recent blog entry I wrote entitled, Why there's no one-stop shop for photo buyers, I postulated that the photo industry is "immature" because it has not yet achieved certain kinds of efficiencies that other, more "mature" industries have, such as electronics.

This prompted a response by John Harrington in his post entitled, One-Stop Shopping for Photo Buyers - Too Complex and Fractured. His post took exception to many of the individual details of my article. The argument strategy is a common one where the real goal is to undermine the underlying premise by discrediting the facts that lead to it. But the details he chose were not germane to the larger point.

For example, John says, ...photography has been in the marketplace for far and away longer than electronics; and later, the photo industry is mature, but fractured. He concludes by saying that photography is a different media than electronics, and that accounts for the differences.

All fine points, but individually unimportant to the larger argument. In fact, I would propose that we don't really disagree on the main truism: pricing inefficiencies exists, and that is due to in some part to a fractured market. Posturing a position of disagreement and discredit for the purpose of undermining a more fundamental principle that he disagrees with is one thing, but the net effect of his post is counter productive: it perpetuates the partisan divide. His readers will be even further convinced that I am off my rocker, and my readers will continue to nod their heads in disbelief that the pundits in the photo industry still have their heads in the sand.

This doesn't lead to addressing the real problems that our industry faces.

Thought we may disagree on the terminology we used to describe the conditions that we both see and agree on, what he didn't address was my larger thesis: why is the market is "fractured" in the first place? (I called it an "immature industry" to be in keeping with more conventional economic terminology.)

So, how do we get the discussion back on track? We can begin by addressing one fundamental disagreement that has fathered all the other disagreements:

What role does the consumer play in the global economic effects we're seeing in the photo industry?

Here are the opposing positions:

I'd been arguing since the 1990s that the internet and digital technologies created an environment where consumers would be playing an ever-growing role in the economics of the industry, and that if photographers don't accept this premise early on, and change certain fundamental business practices, perceptions, and other strategic relationships, they would lose control over their own domain. There would be a time when all economic, social and legal matters important to pro photographers would lie outside their sphere of influence.
The counter-argument has been (and continues to be) that pro photographers still account for the bulk of licensed images, and stock agencies for the bulk of image sales. Therefore, economic, social and legal conditions are all manageable within the pro photographer community at large. The challenge has rather been that it's a large and decentralized group of mostly independents, each of whom represent a large swath of disciplines. Getting consensus on how to address certain things may be logistically hard, but doable, and outreach is expensive and education difficult.

These diametrically opposing views of the industry is the source of many, if not every, disagreement I've had with those in the photo industry.

For example, On the topic of price inefficiencies and erosion, I contend that it's due to the huge and disproportionate number of consumers who've entered the market as both suppliers and buyers of image content.

The opposing view holds that it's because too many microstock agencies came online and pros and other agencies were forced to drop their prices.

(My retort to that argument can be found here.)

Depending on which of these two premises you buy into will govern decision-making for your own economic future (if you intend to make money as a photographer). And which of these two premises you choose can be predicted by behavioral economists: cognitive and emotional factors govern decision-making, and those decisions are based on philosophical foundations. My philosophical foundation rests in a belief in open markets, strong competition, and no reliance on peers or "all for one" cooperation to succeed. Therefore, I responded to pricing pressures early on in my career by altering my business model to focus on higher volume, rather than higher per-unit pricing.

The traditional industry professional has philosophical foundations that holds that pros still control the market--not the consumers--so to maintain price stability, cooperation must be maintained through solidarity, which implies not undercutting other pros, never give anything away for free, and acting as a collective in all matters.

You name the "event", and I personally will behave diametrically differently than the traditional pro: Creative Commons, Orphan Works, copyright protection, marketing methods, use of "free" in sales and/or promotion, the use of portfolios, and so on. Every single aspect of the photo industry will be perceived differently between me and most photo industry pundits simply because of this sole, root disagreement about the role of the consumer.

Yet, the elephant in the middle of the room is still a common climate-changing event: pricing, copyright compliance, and distribution have changed. Our greatest challenge is akin to that facing those in the global warming dispute: it's not whether we can come to agreement on basic, core points, it's whether we can move forward with proposed solutions.

I agree that disassociating the two is counter-intuitive. How can you come to agreement unless you agree on the points that lead to particular proposals? Well, the first thing to realize is that one's one philosophical biases may not yield the same perceptions on such points. The different use of terminology between me and John Harrington when referring to price inefficiencies, for example: an "immature industry", or "too fractured?" Does it matter? Yes, points are important, but focusing too much on them can stall forward movement. Sometimes, solving these issues is more like solving a maze: start at the finish line and move backwards.

The way to test that theory is to probe what the either side would say if the underlying premise (the role of the consumer) is or isn't true. I'll start:

Let's say that my premise is false: that the role of the consumer has not been substantial enough to affect pricing or other issues facing the industry, and that photographers have a direct and strong influence on shaping the future of the industry. In such a case, I would say that the basic philosophies of the trade associations and recommendations by pro photographers are well-considered and actually spot on. The real problems are political: there's lack of unity among the trade associations (they should be merged into one or two), there's too much homogeneity (dissent and differing views are not well-accepted), and there's a deficit of intelligentsia. (No one does true research or recognized economic modeling; most studies I've seen wouldn't pass muster in basic college statistics classes, mostly because of the sample sizes of surveys aren't representative enough of the population being studied.)

I've written longer manifestos detailing all these ideas, most of which were published in the 1990s, back when I did believe that the photo industry still had such control. (I was warning that, unless these changes were adopted, then the industry would lose control, which I believe happened in the early 2000s.)
I now put the question to the other side: "If you believed that pro photographers were so outnumbered by consumers as both buyers and sellers of photography, that pro photographers and trade associations has absolutely no material influence on all aspects of the industry--economic, legal, social and legislative--how would you alter your approach to addressing the "climate" problems in the photography environment?"

You have 30 minutes. Use a #2 pencil. Go.

If your answer to that is, "If we're entirely powerless, what point is there to answering the question. There's nothing we can do!"

Au contraire, mon frere. There's plenty you can and should do, and these come in two forms: inward and outward.

Looking inward, assistance to photographers should include helping them better compete under conditions where their main competition is no longer other pros who will recognize traditional professional courtesy. Marketing, pricing, promotion, assignments, contract negotiation, and everything else necessary to succeed at photography is different when you're dealing with a base of photographers that don't recognize past professional principles. I won't get into the details of that here; my books and articles from my blog index already discuss these in depth.

Then there's external outreach. I'd recommend pro photographers and trade groups try to recruit consumers, to get them into the fold, to be more and stronger advocates for the cause. Initial tasks would include lowering membership fees to $25/year, advertising and promoting photo trade organizations in consumer trade publications, having photo trade publications highlight and profile consumer-photographers who themselves can serve as role models for others, contracting with mass consumer marketing and PR organizations to help re-educate traditional pros and trade groups to better understand consumer behaviors (as buyers and sellers of photo content), and so on.

In short, one must appeal to non-professional photographers en masse, and you do that by understanding their personal goals and desires, not by trying to change and mold them into the old world.

And it's this very premise that will alienate most pros and trade organizations. Their visceral and palpable response is rooted in the core philosophical rub--a disagreement of gargantuan proportions. Pros and trade groups will not be happy that consumers will not accept the traditional pro photographer mantra. Consumers and non-professional photographers are not opposed to "free" to promote themselves--because it works. They are not opposed to "undercutting competition"--because that's how the open market works. They are not worried about entering photo contests that ask for "rights grab" terms because this is what gets them visibility. They are not opposed to "work-for-hire" contracts, because those pay the bills. They are not going to sign up for a "solidarity" mindset, because a successful market is one that advocates strong competition. Photographers must dispense with the "union" mindset.

Now, I fully appreciate that all this is a hard pill to swallow. But, the climate is changing--the question is, "what are you going to do about it?" If one does not accept that the consumer's role is significant, there's not a whole lot of discussion to be had. But, if one does accept the premise, the industry's philosophical paradigm must shift.

The behavioral economist in me predicts that most pros would simply bow out of the business all together. Their "cognitive and emotional faculties" would not accept such a premise easily, and the cognitive dissonance would compromise their philosophical foundations.

Then again, we could just weather the storm till mother nature swings back to the kind of normalcy that we've become familiar with.

Off-topic: Gift Cards

2009-12-05T09:19:00.001-08:00

[ Update: The New York Times wrote this column several days after I posted this entry. It's full of detailed industry data. ]

Though I never talk about it, I had a consulting contract a very long ago with a company that wanted to do something in the credit card business. I was involved for about a year, and the while the idea itself was great, it never got off the ground because of a critical "last puzzle piece" that couldn't be solved. I eventually did (and filed a patent), but it was after the company fizzled, and I had no desire to enter into the "payment" business. So, there it stays in my history pages.

But just today, I was talking with someone that said the following:

"I've heard that prepaid debit cards are really bad gift ideas..."

This prompted me to vent a long-standing issue I've had with credit card companies.

The main reason people don't like gift cards is because when the card gets down to about $10 or less, they become virtually unusable. Although you can go to a store and say, "charge the first $7.43 on this gift card and the rest on this regular credit card," it's very rare that people do this. And you certainly can't do that online. So, your $50 gift turns out to only be worth $42.67, and Visa/MC makes a handsome15% profit.

In this sense, gift cards to visa are the victim of their own success. People see the lack of value in the cards, and don't adopt them nearly as much as the card companies would like (or had expected).

The question is, what can card companies do to raise the rate of adoption while not giving up too much on the margins? Remember, the card companies *don't* want you to use up all your credit--otherwise, they give up the margins that makes them worthwhile (to the card company). And they don't suddenly gain new customers just because someone uses a gift card.

Now, one could argue that, as long as they make the same 1-3% margins on the gift cards as they do with regular cards (this 1-3% is the rate that the merchant pays on the total cost of your order), that should be good enough. Well, administration of the gift card program is a bit more expensive, and besides, there's plenty of room to optimize margins anyway. So, don't get me wrong: I don't fault the companies for using gift cards for profit motive at much higher rates. I fault them for not being more intelligent about this in ways to service both themselves and us, the consumers who could benefit from them. Their challenge is to increase overall revenue by finding the sweet spot in the increased adoption vs. the decrease in margins.

The way to do that is by making it easier to use that unused credit in high margin products or services, such as a visa-run online store where they sell products from co-marketing partners (where the co-marketing effort yields more revenue). This would be especially useful for non-physical goods, such as downloadable products, like music, games, movies, etc.

Or, allow gift card holders to apply unused dollars to their Visa Rewards program, which is pretty good, albeit under-appreciated, largely because most people opt for other programs with their visa cards, like airline miles (see below). This would do more to raise adoption rate of the program and potentially convert users to their "real" card. (That should ultimately be one of their prime motivations, yet it's not effectively promoted that way.)

Card companies should also consider developing helpful payment services that make it easier for online retailers to accept multiple card payments, or partner with paypal or google to allow users to register these cards in exchange for a portion of the margins.

Industry research shows that most "reward" programs usually yield the consumer about 1% of his money back, but getting that value is not entirely easy, nor is it immediate. It takes time. A research study I read in the NYTimes some years ago showed that the best programs are those that simply pay you cash back--even at 1%, this was best for consumers. Ironically, airline miles yield the least return, but people opt for them because having more unused miles gives other benefits like premier status that allows access to airline clubs at airports, and advanced positions when upgrading and other things -- all these require high mileage values creating a disincentive to ever "spend" your miles. This makes the "statistic" that credit card airline programs yield low rates of return a bit murky.

The point about reward programs as anyone in the consumer business knows, it garners much more revenue and profit than the 1% you give up to attract the users. Yet, gift card programs don't even attempt to tie into this. Such programs and co-marketing efforts could be more profitable if the card company was willing to make only 5-6% margins (instead of 15%) and offset that with a 10% increase in the rate of adoption, if they were only kinder to the consumer.

Ok, that's my vent. This is not a topic (or field) I will be watching at all, unless it happens to come across the mainstream press. I'm more than happy staying out of this business.

Time-Lapse of the Sky over Puglia, Italy

2009-12-01T11:15:00.000-08:00

Once again, I have new time-lapse videos up on YouTube, and the latest is this series of scenes from Puglia, Italy (the southern "heel" of the boot):

If you don't see the video displayed above, see this link.

On a separate note, I'm also offering a 50% discount on print orders, and an additional 10% off on book orders through Christmas. Use the discount code "xmas" when placing an order.

Why there's no one-stop shop for photo buyers

2009-11-29T14:23:00.000-08:00

I got an interesting email today from someone that prompted me to address a question on many people's minds: why hasn't a single website emerged as the "primary" place to license images? As those in the photo industry know, Getty sells quite a bit, and microstocks fall behind them, followed in turn by a smattering of pro photographers and others who do well as individuals. But, with the trillions of photos on the web, and with the sheer magnitude of opportunity, what's really the barrier to growth?

Here's an excerpt from his email:

do you think that there could be an issue with just straight up too much content for buyers (all buyers)? Say for example - there was a website that everyone knew was the place to buy and sell images for any sort of use (commercial, etc.)? Couldn't there still be too many shots of a 'dog'? ... if all the buyers/sellers universally knew this was the place for images - wouldn't the back-end functionality of a site like this take an army of programmers to design? I have to wonder why something like this doesn't already exist or is in development by a major player like google?

Saying that there's too many photos out there is like saying that Google can't index the web because there are too many sites. And thinking that there could be a single go-to site for buyers and sellers is like saying that there's could be single go-to site to buy electronics. There aren't because there's competition, etc. But, the reason why there's a viable, stable market for electronics (unlike photos) is because there are mechanisms in place that help establish price points, distributors, manufacturers, and so on. In short, it's a mature industry.

The same cannot be said of the photo industry for a variety of reasons.

To begin, it's not that there's "too much content" it's that there's no reliable mechanism for sifting through it. Go to images.google.com and type "two men shaking hands" -- a common image search for business purposes. Though the matches are generally accurate, the results are also entirely arbitrary. We have no idea if these are popular images, or they are shot by famous people, or if they are "current", or even whether the source (website) is ranked highly.

The same is true for every website that displays photos--buyer website or not. "Arbitrary results" is why buyers have trouble finding what they want quickly and easily. Yet, despite the huge number of sites that talk about "swine flu", a quick search on that topic usually gets you exactly what you want on the first page. You can even misspell it -- say, "swing flu" and still do well.

So the first problem that people have to solve is search. And this is irrespective of where people go. Now, people can argue about whether real buyers go to search engines or to stock agency sites, but the technology barrier exists nonetheless. Who's going to solve it? It cannot--by definition--be a stock agency. Why? Because they will not (and cannot) return results that are photos they cannot represent.

Whether now or in the future, search engines will be how most people (yes, buyers) find photos.

Now that's not to say that companies like Getty couldn't solve the problem. In fact, they should. To do so, however, they would change their business model from being an exclusive seller to one that acts as a proxy for others -- a grand middle-man, much like how Visa and Mastercard merely enable transactions with an infrastructure. They don't actually participate in the transaction itself.

The reason why Getty won't be coming to the table here is that they suffer from two basic errors in their understanding of the photo industry: first and foremost, they don't see the market outside of their existing world of traditional ad/media buyers. Yes, that's a big industry, and Getty services them adequately. But it's tiny in the broader world of image licensing transactions. And this leads to their second grave misunderstanding: the belief that the best way to service buyers is to have limited content that's hand-edited by seasoned photo editors.

This is not in keeping with the internet today. As we have all learned in the past decade, Web 2.0 means that the "crowd" is the editor, and order among the crowd is achieved by applying intelligent ranking algorithms, tracking their behaviors, and mining user preferences to glean predictability. Getty doesn't do this. No one does this. (Well, google does with their regular text search for non-image content.)

Getty's model of knowing and understanding what buyers want is fine if you have one-to-one relationships with them, and that's what Getty's good at. I'm not suggesting that Getty doesn't keep what they have in-house. It's what they don't have -- what needs to be built -- that they lack, and what the industry needs.

For the industry to become "mature", there must exist two main functions: (1) a search and ranking system that returns reliably accurate results beyond any measure we see today, and (2) a predictable and viable pricing model that represents a true market-maker commodity market.

Granted, these are not simple problems to solve, but there is precedent for similar algorithms. For instance, Google took quite a few years before they came up with just the right mix of variables and weightings to determine which web pages match a given user's search criteria. A similar list of factors can be derived to determine quality image searches in a variety of contexts.

In the photo world, everyone looks to metadata (such as keywords) as the primary factor, but that's quickly morphing into something else. It's a longer discussion to have, but it sums up this way: google stopped looking at web pages' "keywords" field in metadata because it became unreliable--the system can be gamed, and bad players were ruining the reliability of google results by lying about the content of their web pages. Google solved this problem by no longer looking at web pages' keywords settings, and did their own semantic analysis of web pages to determine what keywords should really be associated with them.

It's not that "keywords" themselves will go away in images, but the future of image search will go well beyond user-editable metadata. Factors like "age" (current-ness), supplier, number of views, frequency of (published) use, and automated programmatic analysis about images to assess various conceptual attributes as well. Hard? You betcha. Yet, just as it took google years to come up with their "hundreds of variables" that determine a web site's ranking for any given search term, so too will effort have to go into determining the relevancy of any given photo search.

There are various image recognition algorithms that can begin to move in this direction, but once you get into the science of it, the field is much broader than people think. There are proximity algorithms to determine if two images are the same, there are content algorithms to determine image characteristics (color, textures, emptiness, focus, etc.), and pattern recognition (faces, emotions, objects, and other patterns). Underneath every image recognition algorithm must be a hierarchical database of seed information to spin the world into motion so that trillions of images can be automatically processed from web crawlers continuously.

And this science isn't just to determine search relevancy: it would also be used by an auction-based system to set pricing for a trading system, exactly like how google prices keywords for its advertising system. This is not simple college algebra, but it's also not science fiction. Similar models have been built to create efficiencies for more complex markets than photo licensing. (Personally, I envision a structure similar to the formulas used for pricing stock options. Here, rather than having a big/ask market of quotes, prices are derived from external data based on aggregating a weighting of historical pricing patterns for images with similar characteristics.)

So, who's going to do it? Therein lies the $64,000 question.

Here, there are two problems: As just described, there's a lot of technology here, ranging from all the various image-search algorithms to the pricing analytics. This by itself is already way beyond what any one company has done. So, whoever's going to attempt this must likely be large enough to go on a bit of a buying spree.

Secondly, there needs to be a general realization that there's money to be made. This is difficult when the cultural behaviors around photos is to share, steal, or do whatever you want. Most investors don't really see the "vision" of a viable worldwide market with these sorts of things become further embedded in our online social fabric. This, despite the fact that research shows that photo licensing is still a $25B industry anyway. Comprised mostly of peer-to-peer transactions, it is now precisely how the online advertising industry was before Google.

More reading on the true size of the photo industry can be found here.

Google could solve both problems outlined above, but that would introduce another problem: They are in the advertising business. If they were to enter a business that monetized content on the web, it would bring into question the objectivity of their search/ranking algorithms, which is the only reason people trust their advertising model. That is, buyers and advertisers believe the pricing model because Google currently has no financial interest in monetizing the content on any given site.

What the world needs is a search engine from a company whose business model is not to sell advertising. Yahoo is becoming a much more likely candidate for something like this (as I'd noted in this blog post), but the catch-22 here is that if they were that visionary, they'd have started this kind of development with their Flickr property years ago. Yes, Flickr could be a good launch pad for such an endeavor, but Flickr's too busy with other things to bother with such fantasies.

Then there's Microsoft: they have the money and the infrastructure to actually accomplish this feat, especially given their efforts to build a good search engine. Their physical and political proximity to Corbis (started by Bill Gates) could also be a substantial contributor to the transaction and pricing models that will be needed.

But I dont' have faith that we'll be seeing headlines in these areas anytime soon. That may change with the evolution of Web 3.0... For that, see this post:

http://www.danheller.com/blog/posts/economics-of-migrating-from-web-20-to-30.html

Marketing Tasks vs Positioning Strategies

2009-11-07T08:49:00.000-08:00

In a discussion forum on LinkedIn a while ago, a photographer in the UK named Clare-Louise posts a question, "What's the best way to market myself?"

The responses come flooding in: "Put your best portfolio together and send it to as many people as you can," writes one. "Do a direct mail marketing campaign," says another. "Build a great flash website," chimes a third. "Write about yourself in a blog," echoes the crowd.

All these ideas are those you've no doubt heard a million times, and many people swear by them, citing personal anecdotes to success. Yes, one should do these things. But that's not saying much. Everyone does these things. If you were to interview a room full of lottery winners, each will tell you their technique. But as you know, picking numbers is, despite the claims of the winners, nothing but luck. And so is photography, at least insofar as the marketing is concerned.

It's not that some photographers or their works aren't genuinely "better" or more appropriate for a given client than others. There are differences. The randomness comes in from the sheer volume and noise received by those who sift through it all, because they are flooded with portfolios and emails from people just like you. No matter how much you tweak, or categorize, or improve, or anything else to differentiate your photography or your presentation, the huge volume of noise that photo buyers/editors get means that such attention to detail is not going to yield much more of a difference than random chance—that someone just happened to be in the right frame of mind when he saw your portfolio.

Yes, you will find the winners that say, "I wouldn't have gotten that job had I not sent in that portfolio!" But what about the hundreds or thousands of others that did exactly the same thing, but didn't get hired. If you were to look at their contributions, you would be hard-pressed to see such a discernable difference as well, helping you appreciate just how arbitrary photo editors and art directors are.

Predictably photo buyers would strenuously disagree with this. They genuinely believe that they have unique insight into which photographer is the best one to hire. And in their minds they're right because of their own track record; their ratio of success to failure is so high because they're smart.

This is what I call this the inverse-lottery game, where almost every ticket is a winner. For them, the photographer they choose will likely do a good job because, despite what they'd like to admit, almost all of them would be perfectly suited. It's like the game that toddlers play where they pick from a tubful of rubber duckies that has a star taped underneath. In their world, they pick a duck, turn it over, and surprise! They win! They really think they knew what they were doing. But the reality is, all the ducks had a star.

That's OK. Let them think that. Here's where your strategic planning can be put to best use: When you contact someone, don't even mention photography. Instead, discuss business. Keep in mind this truism: A great photographer with bad business skills will rarely get work, but a mediocre photographer with great business skills will rise to the top.

Note that I'm not saying you shouldn't send in portfolios and try to establish first contact. You should! But that's not the whole picture. The problem with this approach is that it's based on a faulty premise: that getting hired is all about your skill as a photographer. The point is, these are tasks, not strategies.

Marketing tasks is one thing. Positioning is another. Most photographers don't position themselves. And positioning is how you establish how you are perceived as a whole, not just as an artist. Whether buyers know it or not, they have bias towards individuals that are in tune with their businesses and the issues they face. Positioning yourself as such a person is your goal.

Effective positioning can be done in an infinite number of ways, each of which involves writing and speaking authoritatively on matters pertinent to your target clients. You need to articulate a vision statement about their business.

If you really want to jump ahead of the class, you need to make yourself stand out in ways that make you more than just a photographer--you need to appear as an expert in the business of your target clients. You want to be seen as someone that can help with their business objectives by offering the "outside expert" insight, to help them see the forest for the trees that they can't do because they're in the woods. You need to offer perspective from a broader industry outlook because you have your fingers on the pulse of many companies, perhaps even their competitors.

It may sound like I'm suggesting you to actually be an expert, or to sound like a CEO. I'm not. I'm merely suggesting you talk about things you know, and use them in your promotional materials, especially in ways that are either independent of photography, or which use photos only as examples to illustrate business points. Not as a demonstration that your photography is great. (You already do that with your portfolio, website and other stuff.)

The advice above usually throws off most artists right off the bat. They think it's entirely counter-intuitive to talk about anything except photography if that's their ultimate goal. Worse, they vastly underestimate their knowledge and experience in the fields of their own photography, and they certainly underestimate the relevancy of this knowledge, especially when they are emerging in their careers and trying to get work. When I've done individualized consulting for those who get "stuck' in their careers, simple discussions on these subjects often reveal that their insight and analysis on matters in their subjects is quite advanced.

So, let's now look at Clare-Louise that started this discussion. Her website, which is at www.clare-louise.co.uk, is full of self-produced images, but you'd never know it--they look like pieces she's done for other clients. So when she posted her question to the LinkedIn forum, I was curious as to the story behind the story.

When we started talking, I probed into what here interests are, what industries she knows, her experience and expertise, and so on. This got her talking about topics that she thought was mundane and unimportant; to me, her knowledge was way over my head. She clearly knew about fashion design much better than I did, and I've known some good fashion photographers. I can only imagine she'd hit it off very well with photo buyers or editors.

Her problem was that she was only contacting them as a hungry and unemployed photographer. The psychology aspect alone put her much further behind everyone else. If, instead, she approached prospective clients with a more business-oriented approach, she'd get much better responses.

So what should she – or anyone – do? Positioning is key, and that's done by demonstrating your knowledge and expertise about a subject. Obviously, blogging is the best way to do that. If what you say and think is truly useful and wise, then your career will follow. You need to talk about stuff that buyers are interested in. Don't talk about yourself, your personal life, or what you enjoy about photography. Buyers don't care about these things -- they won't even go to your blog. You want people to land on your blog as a search result they did on a keyword that you talk about.

Another good way is to frequent discussion boards on the subject of your expertise, not photography discussion boards. Get to know people in your industry, network with them, socialize with them, and join their professional associations. If you know who's who in the field of your photography (not the photography itself), you'll have much better insight into where opportunities are.

Let's say you're a fashion photographer that focuses on children's clothing, and you wanted to contact a potential buyer at Sears. You Google her name and see what she's written, where she posts things, a blog she might have, or any other mention. Now, imagine what response you'd get if you started with, "I saw what you said about last year's catalog. Did you see the line-up for kids this fall? The fashion magazines are calling it a big departure for the pre-teens, and I hear Macy's is stocking up ahead of the curve. What do you think?" She wouldn't possibly know that this is a pitch from a photographer looking for work. This is just business banter between colleagues in the same industry.

You are more likely to not only get a reply back than if you just sent a cold-call email asking to send a portfolio. You're starting off as peers, not the master-servant relationship they're used to. Here's your opportunity to foster the relationship. The nature of your discussion will start off on a professional level, far from what this person would have ever expected from a photographer--certainly not a new and inexperienced one. Your goal is to show that you know this topic because you're experienced and informed on the subject (even if you aren't—you're also learning). Before you know it, something about "photography" comes up in conversation, and you'd be in a much better position to posture as someone she could use.

So, yes, contact clients, send portfolios, write a blog, have a sexy website. But those should be minor and incidental tasks that you take up every so often as a regular course of business. Spend your time and resources developing serious and valuable materials focusing on your knowledge of the businesses and industries that are the focus of your photography. Once you have those things, you can reshape them any one of these marketing forms long into the future.

I discuss this topic in much greater detail in my book, Profitable Photography in the Digital Age, which can be found at http://www.danheller.com/books

Might Picscout Ultimately Cause Yahoo to Acquire Getty?

2009-10-16T11:06:00.001-07:00

I realize the title of this blog is rather provocative. But let me lead you through this.

It all starts with David Sanger's blog on picscout's new Image Registry and Image Exchange, which is the system that Picscout uses to index images and bring buyers and sellers together through third-party licensors. David makes insightful comments on three critical points.

First, his point #2:

Picscout aims to take a percent of sales, noting on their site: “ImageExchange acts as an online affiliate program, sharing image-licensing income between PicScout and licensors.” This will reduce the percent that goes to the photographer.

David is not the first to observe this, but it illustrates how the big picture is being missed. The premise begins with the fact that the universe of images users (some of whom are active buyers, but most of whom are not) use applications that produce documents (digital and print). Those applications are developed by third party Independent Software Vendors (ISVs), such as Adobe or Microsoft. If the applications that ISVs produce adopt the Picscout API to hook into the registry to identify images the user is using in his document, those users will not only be automatically notified they are using copyrighted images, but will also be given the opportunity to license them. This concept isn't far-fetched--exactly the same thing is done when users try to view movies or listen to songs on some devices.

However, because such a thing is not yet done for images, it has the potential to transform the stock licensing industry. If enough ISVs adopt the API and hook into the registry, a critical mass of users will be invariably recruited into the photo licensing economy. The more ISVs that adopt this API, the more applications will be using them, which casts a wider and wider net of users... who themselves become image buyers.

Here's the hitch: those ISVs will not adopt the API unless they have a stake in the game. That is, a cut of the license revenue. Unless someone has another carrot to wave in front of those ISVs, that's the only way to get them to participate in the program. If ISVs don't adopt the API, this whole discussion is moot. No one uses the registry. Game Over.

Therefore, the game is to capture the ISVs. And the only financial incentive they can possibly have is to participate in the licensing model--that is, a rev-share. This has the even greater advantage of giving the ISV even more incentive to get their own users to license images. The more they license, the more money the ISV makes. The ISVs will not just promote these features, but they may make it pretty darn difficult for users to avoid these features.

Imagine what Adobe would do if they had the ability to get a cut of a $10B economy if they just added a feature into InDesign that assured that the photos being used in any given document was properly licensed.... much the same way an iPod assures that the movie it's about to play has been purchased.

This is the same model I've described in my article, The Economics of Migrating from Web 2.0 to Web 3.0: convert the vast majority of image users into image buyers, and sales volumes go way up.

So, that David observes that photographers' percentage of royalty goes down is a true statement, but one that clearly misses the big picture. Obviously the ISV rev-sharing cuts the pie into smaller slices, but a smaller slice of a much larger pie.

David then makes another keen observation in point #7 about Picscout's underlying technology:

Evaluating an entire page of thumbnails is time-consuming. Each thumbnail must be downloaded and analyzed by the PicScout servers before returning index comparison results...

Though David only cites the Google search as an example of how users expect "speed," this is only the tip of the iceberg. Picscout's web browser plug-in that examines google searches is merely a prototype to demonstrate how the API works. Once again, the real goal is to capture ISVs.

But David's observation is more prescient than he may have thought, for performance is probably even more important than rev-sharing by ISVs. If their apps degrade in performance by using the Picscout API, they won't use it, irrespective of rev-share.

The technology Picscout has introduced is clearly first-stage prototypes to introduce the business model and be the first on the map. Yet, it's also Picscout's Achilles Heel, as there is a race about to ensue.

Let's not be naive: Picscout is not the only company on this track. Image-recognition is a science that's akin to text search: there are many ways to do it--some better than others--but it only needs to perform to minimal threshold for the business model to succeed. Many other factors dictate success or failure. Sure, though Picscout may have superior image-recognition algorithms, that part isn't the crowned jewels. Indeed, there are many companies with image-recognition algorithms, Google being one of them.

The real challenge is to build a network protocol that can communicate image information between a client and a server as quickly as possible, using as little network bandwidth as possible. Then, this mechanism needs to scale up to service huge volumes of requests from huge numbers of applications on the net. Picscout may be the first to introduce the proof-of-concept and a prototype, but the real race is on the back-end... as David pointed out.

On the surface, this would seem difficult -- and it is -- but it's hardly new. All large-scale social-network sites do this on a regular basis, from twitter to facebook to Flickr. Though cloud-computing is mature, the real barrier to entry here is the costly capital investment necessary to run such a service. There are many players in the field that already have this infrastructure. By comparison, Picscout would have a harder time ramping up to that level of computing resources than it would for a larger company to find some sort of image-recognition technology (if they don't already have one).

For now, the game is Picscout's to lose, since they're first. But "first" players often find themselves in catch-up soon thereafter. If they even moderately demonstrate viability in the concept, much larger players (such as photo-sharing sites) who have such resources already will be quick to swoop in.

Lastly, David notes in his point #3:

If buyers find it easier to find images through web search they will move away from distributor sites for search, and only use the distributor site for the final licensing.

Yes. Exactly. But that's nothing new. It's been that way since about 2002 now, a fact that I've been pounding on since that time: The vast number of licensed images are done on a peer-to-peer basis directly between buyers and photographers. Stock agencies have suffered because they've missed this point, and have since struggled in trying to figure out how to fight their way out of the paper bag.

But that struggle will end without their having to do much about it. With the combination of image-recognition and web-crawling, the emerging business model Picscout is attempting is now a Fait accompli. That is, David is correct to say that stock agencies of today will become nothing more than hosting sites and clearing houses that supply inventory to other middle-man sites (like Picscout) that do the real job of pairing buyers and sellers.

But is this really a bad thing? He says it in a way that suggests that agencies somehow preserve stock prices. Let's not forget that if ISVs and others realize there's money to be made, they don't want to under-price inventory too. If you want to preserve price stability, convert the social-networks from photo-sharing into photo-licensing businesses.

I've nothing against agencies, but their future will require them to do two things they never did before--in fact, that they avoided: rank well in search engines (so that end-users are more likely to find content in the first place), and attract as much content as possible. That is, stop being editors. Let any and all images in, and let the natural ranking abilities of search engines and social-networks be the real editors. To date, stock agencies have neither sufficient content volume or web-ranking in search results, nor do they employ social-network aspects to their sites to attract users in high volumes. (Again, their head was in the sand for too long.)

So the question is, who can do this? Answer: Photo-sharing social networks.

Back in 2008, I posted an article titled, Stock Photography, the Consumer, and the Future that forecasts this very phenomenon. Once the realization that there's lots of money to be made by creating a streamlined and automated image-licensing mechanism, the sleeping giants of the photo-sharing social networks will awaken and bulldoze over the traditional stock agencies in ways that no one would have believed.

Indeed, I wrote in January, 2008 in an article titled, Pulling the Flickr sword out of the Yahoo stone:

Flickr is one of the very few photo-asset powerhouses on the web that could monetize its content in ways that would exceed even modest expectations.

In fact, I also wrote in an article titled, The Solution to Getty's Woes that Getty should acquire Flickr for this very reason.

But times have changed considerably since then -- Getty has shrunk in size, and Yahoo! has recovered handsomely. Getty could never acquire Flickr now... but if this whole business model of using image-recognition as a vehicle for licensing images shows promise, then I wouldn't be surprised if Yahoo! starts casting devious stares towards Getty.

Hmmmm......

Picscout's IRC - commenting on other people's comments

2009-10-09T15:00:00.000-07:00

When Picscout announced its new Index Registry Connection (IRC), the blogosophere has been abuzz, and with it, personal emails directly to me requesting public commentary.

Though I'm no longer affiliated with Picscout (past VP of marketing), I feel compelled to chime in on the subject. However, I obviously have information and insight that I'm not at liberty to discuss. This is a bit frustrating because some of it would help dispel some of the myths and misunderstandings that many people have about the IRC. However, there are a few things I can say that will merely help steer people in the right direction, at least insofar as their overall understanding of the stock photo market and the IRC's relationship to that. A great deal of this is based on blogs I've posted over the years, all of which pre-dated anything Picscout is doing today.

What we know, and what Picscout has announced, is that they are in the first stages of a technology that will someday be used as the foundation for new business models yet to be discussed. Those who've expressed concern about the IRC at this point have done so based on rather erratic speculation. According to Picscout, the IRC is just an index. It's currently being populated, and they are building an API for application developers to attach to the index to get information about images. Yes, Picscout has made a preliminary prototype that uses this API -- the firefox plug-in -- but one can assume that more applications will have access to that API at some point in the future.

But this hasn't caused some unfair and somewhat simplistic criticism of the browser plug-in. It has been ridiculed as a "bad way to reach image buyers" and that "no one really wants to add a plug-in just to see who owns an image." True, but Picscout didn't characterize it that way. It's just a prototype sample to demonstrate how the IRC can work. One can reasonably assume that, over time, many third-party applications that use images -- especially those used by image buyers -- could incorporate this API as well. There's nothing secret here; this is precisely why technology companies build APIs.

There are also those who've critiqued the basic premise of an IRC. That's like criticizing Google and Yahoo for creating technology that "scans and indexes the web." As image-recognition algorithms evolve, it's natural to index images and track on the web. That there may also be an added element that points to a "licensing agent" for those images not a "good or bad" thing--it's just something people can use. It can become better or worse depending on many other factors.

For example, similar models are already in use. All major media publishers (music, film, video, and news organizations) employ some sort of recognition technology to identify their content, which is then used to track their copyrighted content online. That some of them have been used in unpopular ways is true, but it's simplistic to throw the baby out with the bath water. There are also benefits to those mechanisms; they enable device-makers and others in the supply chain to create popular and useful tools to play such content on devices ranging from MP3 players to TV set-top boxes. The ease and convenience of instant-viewing of movies, songs and other content is a direct byproduct of such technologies applied in non-combative ways.

The difference with PicScout's IRC is merely that Picscout doesn't "own" the content they crawl and index, as opposed to media publishers that only do their own content.

But there's another important difference that the IRC does that other publishers don't do -- it provides for a new pathway within the communication channel for a potential "user" to legitimately acquire arbitrary content. I spoke of the inevitability of this sort of thing back in 2007 and 2008 when I outlined business models that would evolve as image-recognition engines such as Picscout's and Idee's grew powerful enough. In fact, my entire article, The Economics of Migrating from Web 2.0 to Web 3.0, predicted precisely the kind of IRC model that Picscout has now announced.

It's true that Picscout hasn't yet announced details of its intended business models, but just like the inevitability of the IRC in the first place, there's a very limited number of business options available, each of which are similarly predictable. (I identified a variety of such models in the article above.) The real question before us is not what Picscout might do, but how well they do it. Choosing the right partners, technology back-end, marketing, and competitive differentiation will all be instrumental in their success. After all, both Google and Yahoo attempted the same technology and business models, but only one succeeded.

Another concern I've seen raised by some industry watchers is how the IRC will affect stock pricing. John Harrington's post was one of several that expressed concern over the inclusion of CC (Creative Commons) images into the index. (CC attribution allows publishers to use images for free, in exchange for credit attribution). The concern that CC images are "free" and will thereby affect market prices is mis-attributed. I've written extensively about the myths of how "free" affects pricing--you can read them in the "Pricing and Profit" section of my blog. Those articles basically highlight common and repeating events that show how open-market pricing mechanisms has a tendency to optimize price points. Don't get me wrong--there is a concern about CC images, but it's not because CC images are free.

The problem with CC images is more tied to the legitimacy of the images in the first place. This, too is something I've written about a lot before, but I can summarize the basic problem this way:

The CC is used mostly by consumers who neither understand or care one bit about the legal complexity and liability that can come from publishing CC-attributed images.

It's also the case that those who CC-attribute their images don't believe their images would ever be licensed. Lastly, CC photographers don't think about it--they just assign CC attribution with indifference, much the same way one clicks on the Agree button on license agreements for new software purchases.

It's important to recognize the mindset of people who currently use CC-attribution because it forecasts how their behaviors might change under different market conditions. And that's where the IRC comes in. If the IRC shows that people can monetize their images in ways that were previously unavailable to them, they wouldn't be so indifferent to CC. In other words, CC photographers do not universally share the political focus and determination that Lawrence Lessig has. They are not an army of political adversaries that have it out to dispense with copyright. Most CC photographers are largely unaware that they're part of someone else's agenda. The simple smell of money--of easily accessible money--will convert most CC users into regular photographer-contributors.

Because of this, I think it'd be good for Picscout--and good for photo pricing--to be inclusive of the CC community. But there's another, entirely different problem with CC that negates this advantage... for now.

The problem is, where there's profit, there's also greater incentive to game the system. As such, CC presents a significant risk. The misunderstanding and indifference by the consumer public about CC is what allows bad actors to step in. You can read about that in more detail here. The game is to give a CC attribution, and then deny that "you" are the one who gave it. Either the photographer or the user of the image can do this dishonest act. An arbitrating judge would never discern between a lying photographer looking to swindle the publisher, or a lying publisher, looking to swindle the photographer. In the event of a dispute, the dishonest player usually is the one who wins because he knows the game.

Therefore, users of CC images have to trust that the CC attribution on the images they publish is legitimate, and that's not very practical. Combine the effects of these bad actors with the social phenomenon that consumers are in the habit of attributing the CC license to any image they touch--including those they do not own--the result is a time-bomb waiting to explode: when all those mis-attributed images are used by naive publishers seeking to use "free images" through the the IRC, the lawsuits start flying.

It's not as though "most" CC images are mis-attributed. The problem is that it's an unknown number. And the risk for Picscout is that even a small number can result in a PR nightmare. If a disproportionate number of images in its index are CC-attributed, it'd be like being in a dark room full of thieves when the lights go on: you not only can see what's been stolen from you, but who stole them. If most of the goods are CC images, people learn to avoid the room if it attracts thieves. Buyers would do more than just withdraw from using CC images, they'd avoid Picscout's IRC entirely.

The same would not be said of "traditional" infringements--in fact, quite the opposite. If the large majority of the IRC index contains validated works from credible suppliers, the IRC's reputation not only goes up for the buyer, but it would attract more business partners. Here, infringement claims would be regarded as proof and legitimacy of the system.

The issue of CC credibility points to another important factor in IRC's success: managing copyright in general. First, I'll dispel the silly notion that the IRC can be used as a vehicle for easier and more frequent infringements. The IRC is not a search engine, and infringers wouldn't use the IRC if their intent is to infringe. The IRC is just used to identify information about images a human finds through other means. That is, you already have the image--you just want to know how to properly license it.

The legitimate question is whether the IRC actually helps increase licensing. And this gets to a critical point people have asked that Picscout has yet to answer: Will infringements be pursued? As a general point of interest for industry watchers, protection of copyright is one of the most critical cornerstones of copyright economics. There's a direct relationship between copyright enforcement and compliance, which itself is due to the direct relationship between copyright compliance and social norms.

In other words, most copyright infringements are because certain behaviors are regarded socially acceptable--the norm. Infringements of photography are not usually because people want to save money through stealing. To understand the economic effects of this, understand that music copyright compliance trends finally turned positive when music labels struck deals with music companies to create ways for consumers to buy music more easily. And that wouldn't have happened had the music labels not been aggressive in pursuing infringers. I address that issue thoroughly in my article, Proposal for Privatizing the Copyright Registration Process, where I write:

...there's a lesson in behavioral economics: Consumers don't fear copyright infringement consequences, companies do. Markets don't grow by educating individuals about copyright; compliance is achieved--and business grows--by creating convenient and automated mechanisms that make both access to and use of content easier. The recent announcement by Apple and record companies to remove copy protection mechanisms in songs further reflects this economic reality.

That cornerstone of economic viability--pursuing infringements--must be real and present in some form, or there is no economic infrastructure to sustain a licensing business model. What makes this problem hard for photography is that, unlike music, which is protected by music companies, the common photographer does not attempt to protect his image copyrights. Worse, photo agencies do not step in to protect images the way music companies do in any significant manner. Even large stock agencies are puppies compared to the pit-bulls of the music industry when it comes to protecting copyrights. And photo industry trade associations literally do nothing--this, compared to the recording industry trade associations that vigorously pursue infringements.

Photography infringers steal because there is no social norm dictating otherwise. Most are totally unaware that they are doing something wrong. The IRC can lead a potential buyer to a licensing agent, but unless that agent is also prepared to protect that asset, social norms won't change. And people don't build new technologies to support licensing mechanisms unless they know social behaviors will participate in that system.

While the IRC can be used as an infringement tracker, it's unknown as to who is going to pursue infringements. And that's the elephant in the middle of the room. If the culture of stealing images doesn't change, too few people will use the IRC sufficiently enough to justify investment in its growth or participation by third parties that have to choose whether to invest time, money and resources into supporting the Picscout API.

By contrast, if someone does pursue these licensing/infringement conditions, it gives incentive throughout the entire supply chain to participate. Buyers would be more diligent about licensing images to avoid infringement suits, causing more photographers to use the system to track their images, causing more agencies to get more images into the system to increase the rate of licensing, and more third party applications will build IRC access tools into their programs.

In summary, all the critiques of the IRC that I've read are premature. But that doesn't mean there aren't serious questions and challenges ahead.

Z-Mail is now open source

2009-10-08T00:08:00.000-07:00

This posting has absolutely nothing to do with photography. but I have nowhere else to post it.

That said, many photographers are also computer geeks, as I once was. This announcement is a brief peek into my past life as a computer weenie.

The rest of this posting is from the README in this location:
http://www.danheller.com/zmail

Wed Oct 7 22:22:13 PST 2009

INTRODUCTION: This directory contains the open source version of Z-Mail, plus the original MUSH source code from which Z-Mail was derived. I was the original author of both programs, though not the sole contributor. More about that in the HISTORY section below.

Z-Mail is an email client--that is, a program a person uses to read email. It was, in fact, the first commercially available email client based entirely on internet protocols. In the late 1980s and early 1990s, there were plenty of free email clients for unix, but in the commercial realm, all other email programs used a proprietary networking protocol and mailbox format, and they required a gateway to connect to other email systems on the internet. Z-Mail had none of these problems.

Z-Mail was released into the open source community back in 2005 by Netmanage Inc at my request. (Again, see the HISTORY section below.) My goal in putting Z-Mail online is not to revive it. It's more to keep it alive in the public record; to create a form of historical document and to provide first-hand glimpse into the source code of a bygone era. If someone wants to use it, be my guest.

SOURCE CODE: There are several trees of the program in this archive, and they contain source code only--no binaries. The "lite" version (ozmaillite) is the source without any GUI code. That is, it's tty-only. Other than that tree, the other source trees are very similar, with the differences being minor changes introduced by individuals for reasons I am not privy to. Since I wasn't the one who did those revisions, nor do I even know who did them, I can't really say what those differences are.

One thing I've learned: the "latest" version is not necessarily more stable than earlier versions. That may be the case for some parts, but I recall instances where old code "did the right thing" under some circumstances than newer code.

Note that none of this is probably that hard to figure out for someone who truly wants to take a hack at it. Just start with the latest build, and if something doesn't work, backtrack.

Until recently, I have built and used zmail successfully on various systems ever since the early 1990s without having to examine the source code. But when I migrated from a redhat linux to a debian system this year, zmail suddenly failed to build anymore, and I found myself unable (and uninterested) in dealing with it anymore. So, I punted and resigned to using gmail.

HISTORY: In 1985, I started a software project that involved, among other things, creating an internet-based email client that had multiple user interfaces: a traditional text-based (command-line) prompt, a "cursor-driven" interface for text-based terminals, and what was then a new graphical user interface for Sun Workstations. (Sun had just introduced a more usable and formally written API for the underlying windows and graphics displays. At the time, it was called, "SunWindows.")

My mail client was called the Mail User's Shell -- aka MUSH. It's main feature was that it was built using abstract modules, each of which had program entry points from a light scripting language. This design allowed the core functionality to be separate from all its various user interfaces--text or graphical. It also made it possible plug in or out features that would allow it to be light (and diverse) enough to be portable to all UNIX platforms, as well as most any other operation system... including MS-DOS 1.1. (Yes, a 16-bit OS running on a PC with as little as 64K of RAM.)

Fast-forward five years: much interest in the program had compelled me to start a company with my then informal co-developer (Bart Schaefer) who was just graduating with his PhD from Oregon Graduate Institute and needed a job. He could have had many jobs, but he agreed to join me in founding Z-Code Software; our flagship product was called, Z-Mail.

Over the next two years, we evolved Z-Mail from the MUSH code base by adding a new GUI, beefed up the underlying core technology, enhanced the scripting language, opened up to MacOS and MS-Windows 3.1, supported various forms of POP and IMAP, and even created an extension to IMAP called Zync -- the Z-Mail Synchronization protocol. (Though the Zync server was never really released, it did address many shortcomings of IMAP that have never really been addressed since.)

Z-Mail also supported open network-based directory services, and true MIME-based email attachments. (In fact, MIME had actually evolved from more informal proposals from a variety of prototype email clients, including Z-Mail's.)

From 1990 to 1993, our program and company grew in popularity and notoriety, winning "Product of the Year" awards from various industries across all computing platforms, from PC Magazine to the UNIX workstation markets. Virtually every major corporation in the world used Z-Mail at some point, though admittedly, only a few deployed it company-wide, or beyond several thousand users. Z-Mail was most especially popular among IT executives who were stressing about their transition from local-area networks to internet-based architectures. (It takes time to force a locomotive to change tracks.)

What made Z-Mail popular was that it worked everywhere, it worked consistently, and it never crashed. It was (and still remains today) the most ported email client ever--if it had a CPU, we probably had a version of Z-Mail that ran on it. Sadly and mistakenly--and over the objection of my employees--I "sold" the company (some called it a "merger") with another, larger (and publicly traded) company, Network Computing Devices (NCD). The intention was that we would leverage their 410 employees and 65 sales offices worldwide. Alas, As many had predicted, we fell victim to the classic problem of clashing cultures between that of a more staid, publicly traded hardware company, and that of a more limber and entrepreneurial software company. I left within 3 months, and NCD had all but collapsed shortly thereafter.

Before its own demise, NCD sold Z-Mail to a company called Netmanage Inc., who at the time were in the business of selling Windows-based networking and productivity applications that ran over TCP/IP. At that time, Microsoft did not embrace the internet yet, and was still promoting their own proprietary network as the "network of the future," allowing companies like Netmanage to rake in the dough that MS didn't think existed. Among Netmanage's suite of desktop applications was their own email client, which they then renamed as Z-Mail (once they bought the rights to ours), and shelved our original Z-Mail product (save for providing support to its existing customer base).

But this wasn't to last long either, as Netmanage also fell into hard times in the years after Microsoft finally adopting the internet, both literally and figuratively. The original Z-Mail then found itself in a state of suspended animation; even though it wasn't seeing the light of day, Netmanage still owned the rights. I had lobbied intensively for five years for them to release Z-Mail to the open source community; they finally did so in 2005. (See http://www.danheller.com/zmail/netmanage-letter)

Though I had finally gotten my hands on it again, it wasn't the joy I'd hoped it to be. I had already embraced my new profession (photography), and didn't really want to put a lot of time into "relearning" Z-Mail. So, I wasn't comfortable assuming a technical lead in re-releasing it to the open source community, or of coordinating developers. Past engineers familiar Z-Mail had moved on, and my partner Bart was always suspicious of the "open-source" proclamation from Netmanage, so he wouldn't touch it either.

So, there it sat. And has been sitting. Until today.

My posting the source code here is something I should have done in 2005, but was selfishly indifferent to Z-Mail by that time. I've never been concerned about Bart's fear of liability -- I spend a great deal of time in the world of intellectual property, rights, copyright, trademark, and related matters, and I know there's no risk. Furthermore, I'm the one putting it online, so Bart and/or anyone else can feel absolved of psychological stress. No one but me is doing this.

Lastly, I'd like to give a nod of praise and acknowledgment to those who worked hard to make Z-Mail succeed, while also apologizing for my having inadvertently sentenced it to an early death. Had we waited just a few more years, we might have at least benefited from the irrational exuberance that shaped the tech boom of the 1990s. After all, if Microsoft would buy hotmail for $500M, surely Z-Mail would have gotten that much from Netscape. :-)

Time-Lapse of Milky Way over Crater Lake

2009-09-04T08:50:00.000-07:00

In what appears to be a repeating series, I've developed another time-lapse sequence of the Milky Way passing over interesting places. This time, the subject is Crater Lake National Park in Oregon.

If the video frame above this text is not visible, you can view it on youtube using this link.

On shooting time-lapse videos, the most common question I get asked is why I shoot these with a still camera and not a video camera. There are many advantages to shooting with a still, but the two most important ones are resolution and image processing.

First, shooting with a 21mpx camera gives me 5600 pixels horizontally, which allows me to pan and zoom within a sequence in ways that cannot be done using traditional video cameras. The sequence of the crescent moon setting in the video above is a good example: there are three zoomed views of the moon in the video, but they were all part of the same series of still photos. I shot with a 400mm lens, but was able to crop down to get an effective 1600mm lens without losing any video quality. I could have even gone further and stayed within high-def video quality.

Second, the fact that these are still photos allows me to use batch processing in photoshop to reduce noise, to bring out detail in shadows and highlights, and color correction for mixed light sources with different white balances, such as mixing incandescent (lightbulb) and natural light. None of these are possible using video-editing software.

And that's only the beginning.

I've been getting a lot of interest as well in leading a photo workshop dedicated to doing time-lapse. If I do, it'll probably be in the SF bay area (where I live). Of course, I always do this sort of stuff on my travel photo workshops that I run for Wilderness Travel. If you're interested in learning more about those, see their website or call them and ask.

E-Book edition of my model release book

2009-08-28T11:28:00.000-07:00

Many people have asked whether there's an e-book edition of my book on model releases. I didn't know it, but it turns out, there are at least two editions.

There's a version for the Kindle, which you can find on amazon.com
HERE. The price is $16.49. If you're a kindle user, you're either a big fan of the device, or you're not. I have only seen them; never used one. But I do know that these devices don't render photos very well (or even if photos are rendered in this edition of the book at all). If anyone has purchased this copy, please email me and let me know.

Alternatively, you can get a PDF of the entire book, allowing you to read it on the computer using a PDF reader (which everyone has), which has great search features to get directly to the question(s) you're wondering about. The PDF version also provides great rendering of the photos. You can find it HERE.

The price of the PDF edition is actually identical to that of the printed version of the book -- $29.95 -- which turns out to be more expensive than what you pay for the book pretty much anywhere else online. On my site, you can buy it for less than amazon.com.

If you're curious about what I'm talking about, you can read quite a bit of material on my website:

Another Time-Lapse of the Milky Way

2009-08-25T22:27:00.000-07:00

Some readers of my blog may recall the Time-Lapse Movie of the Milky Way I shot last year in the Sierras. Not to outdo myself, but I had to try again. This time, I spent a week in Idaho, and gathered this series of time-lapse images of the milky way. I then strung the best bits together into a 2.5 minute movie, which I posted on my YouTube account. (Note that's a real thunderstorm mid-way through.)

For some reason, the video box shown here only showed the regular (low-res) frame. You can go to the video page directly and click on the "HQ" (high quality) button in red to see the movie in all its glory.

Photography and Public Domain: Part 2

2009-08-07T00:56:00.000-07:00

**Synopsis**
The general perception of "Public Domain" is that if something is available unfettered on the internet, it's free and can be used however one chooses. Most people's perceptions of photographs is like that of random scribbles thrown out for fun, amusement, socializing or to communicate simple, generic information. Most people are unaware when others are using their photos. Nor do they care if they find out. In fact, they're often honored. Virtually no common consumer is paid when others use their images in ways that should require their permission. These collective facts give pause to the investment community for participating in a wide-spread infrastructure that would create licensing mechanisms for photos (such as there is for music). (The only such infrastructure is comprised of a small set of stock photo agencies that do not target the broad consumer market.) This then leads to a great volume of photos that are left both unmonitored and unmonetized, yet are still used in ways that should require consent from copyright holders. The lack of understanding of copyright and Public Domain means that a great number of images are infringed, intentionally or otherwise. Given that, the stage is set for malicious players to exploit these conditions by fraudulently misrepresenting the "status" and/or the "owner" of an image. This can be either to entrap infringers (by suing those who publish such works), or to infringe upon works and defending claims of infringement by saying that the works were declared "Public Domain." Fraudulent misrepresentation of copyright status is not only profitable, but it's the type of scheme that can be easily scaled up due to the enormity of images on the internet and the widespread ignorance and apathy the public have to the problem. The economic ramifications have lead to a stealth kleptocracy that few people are aware of, all within a sub-economy that few participate in. This creates a negative economic feedback loop that perpetuates the problem, further distancing any possible interest in solving it. The solution is not a matter of the law, nor awareness of the law, nor understanding of the law. It lies in the underlying mechanisms and incentive programs defined by the government that would encourage public participation, and would stimulate investment in the infrastructure that would allow fair-markets to compete lawfully.

In part one of this two-part series, I discussed how the term, "Public Domain" is finding its way into the mainstream press. But the topic is a bit obtuse, and press coverage is frequently biased and misinformed.

One of the unintended consequences of this is an erosion of people's general understanding of Public Domain, and by extension, copyright itself. This has had important ramifications on economic and legal events affecting all industries related to intellectual property. It might seem like a stretch to connect the dots in such a dramatic way; this article walks through those connections, beginning with an overview of how the public behaves today, and ending with proposed solutions to the problem.

As will be illustrated by examples and reports below, the vernacular use of the term "Public Domain" has become synonymous with "publicly available." Most people think that if they can copy stuff from the internet in an unfettered fashion, there's an implicit "grant of use" permitted by the author. This, unlike music files, which most people know as being illegal to download without payment, even though some do it anyway. The perception of photos is perceived quite differently; most are surprised to learn that images carry the exact same copyright restrictions and protections as music does. After all, how can a snapshot taken by an infant while he dunked his father's expensive digital camera into the fish tank have the same legal protection as a newly released song by The Rolling Stones?

Oddly enough, they have identical protections in the eyes of basic copyright law. Of course, few people know this. In fact, most believe that unless expressly stated otherwise, photos found on the net are free to use in any manner one chooses. An example of this is reflected in this New York Times article called, Flickr as an Interior Decorating Tool. Here, the author discussed how she likes to go to Flickr and print out her favorite photos to decorate her walls. (Hint: this is technically a form of copyright infringement.) The author's act is more than just reflective of the general public's misunderstanding of how copyright applies to photography, but the article perpetuates these misgivings and helps further establish its acceptability--the social norm.

A UK study further illustrates this through empirical research, drawing the same conclusions. This study became itself a topic in the blog, Plagiarism Today, which concluded that if copyright is to be better understood, "it needs to be built on the back of a robust understanding of common law."

That conclusion, however, misses an important and critical truism about societal behaviors: people don't comply with most civil laws because they are aware of them or even understand them. They comply because compliance is often "built into the system" by default. There are a variety of mechanisms built into day-to-day life that make legal behaviors not only easy, but second-nature, which are reinforced by social and economic "reminders."

A current example of this can be found in how people deal with online music. When Napster was first introduced, people infringed on music universally, all but ignoring cries of foul by the recording industry. When the RIAA started suing individuals for downloading music, people's behaviors didn't change; instead, they viewed the music industry with disdain.

It was only when music labels decided a different tack did people's behaviors begin to change: the companies cooperated with device makers to create simple, convenient and automated mechanisms for users to purchase and play music seamlessly and instantly. This was the first event that slowed the upward trend of music piracy, and an increased the revenue generated from online music sales.

The lesson is that copyright compliance it's not about cost, and it's not about legal awareness or education (or even ethics). For consumers, it's about convenience. Once this lesson was learned, the next experiment took place: the removal of copyright protection schemes on songs, allowing people to use their existing purchases on other devices they own. By further assisting users in enhancing the "music ownership experience," the music companies were rewarded by another increase in purchasing trends.

It's very true that law plays a pivotal role here, but it's the larger companies that were driven more by the threats from one another that stimulated the development of those mechanisms that promoted copyright compliance by the masses.

What does any of this have to do with Public Domain? Well, people steal (even inadvertently) when the system doesn't provide mechanisms for easy compliance. The perception that most photography is in the Public Domain is largely because there are no industries--and therefore, no mechanisms--available to the general public of consumers to comply with photo copyrights. With no infrastructure, there's no economy.

At least, not legitimate economy. The reality is that photography is protected, and it does have value, and infringements are lucrative. If no one's there to claim any of these benefits legitimately, it seeds the ground for bad actors to come in.

The Dots that Lead to Trouble: Corporate Infringement

Though the music and movie industry still suffers from stolen works, the proportion of images that are "stolen" (to those that are legitimately licensed) is significantly higher, and is on an upward trend. This, even though the copyright protections for music and photos are identical. But what makes this significantly worse is that, unlike music that's stolen by individuals, photos are stolen by corporations. This type of infringement is a double-whammy because corporate licensing of photos on a per-unit basis can be in the hundreds to the thousands of dollars (compared to a $.99 song); and because the infringement claims against a company can be in the tens of thousands of dollars.

When no one but malicious players are aware of this, trouble is around the corner.

The dots that lead up to all this begins with the fact that photo copyrights are owned by individuals, not a small cooperative of large companies that can collaborate on industry-wide practices (i.e., music) and can exert pressure to preserve copyright compliance. Individuals have legal leverage only in protecting themselves, which they rarely do because of their own misunderstanding of copyright and of Public Domain.

Next is the perceived value of photos: most consumers use them for utilitarian purposes (socializing, personal photo albums, documenting inventory, etc.), and photos are taken by any idiot with a camera, not just professionals, like musicians are with music.

The combined lack of perceived value and lack of preventative action then leads to the application of this understanding from one's personal life to one's professional life. That is, consumers also work at companies, and their behaviors at home translate to their job duties. If they use other people's photos (and allow others to use theirs) in their personal life, they behave similarly when using photos in the documents they produce at work.

By comparison, there are few if any copyright infringement cases against corporate use of music. Obviously. Everyone knows music cannot be used in commercial ways without seeking permission from the record label. You never hear of a low-paid intern downloading a song and embedding it in a car ad that's broadcast on network television. Even a consumer that illegally downloads songs from the internet knows better than to do that.

The same cannot be said of photography--studies consistently show that 5-6% of photos sold by stock photo agencies are infringed upon by corporations for ads in high-profile magazine, newspapers and the web. Since stock photo agencies (who do go after infringers) represent only about 15% of all licensed images, one can assume that the ratio of photos stolen from non-professionals is much higher, if only for the fact that most online photos have no preventative measures to stop infringements like stock agencies have.

Even when stock agencies sue, it's not educating society with massively sweeping information campaigns. By and large, people still infringe photos because it is, at worst, considered a cultural faux pas--a social misdemeanor. Akin to wearing white after Labor Day.

A recent story highlighting this involved a Missouri family whose photo became a billboard ad in the Czech Republic. The family learned about the use of their picture only because of a random coincidence -- a college friend in the Czech Republic happened to see the sign. What makes this story so revealing is that it illustrates just how unusual it is that the family found out.

While it's a nice, gentle piece that ran in the "lifestyle" section of newspapers (because no one filed a copyright infringement claim, or sued for violating publicity laws), this might not have been treated so lightly had it been a stolen song. It'd have been in the business section, and more serious analysts would have been doing math to figure out what the impact might be on record industry. The mild news coverage of the stolen photo had a subtle effect on perpetuating the general perception that there's no serious harm done in using someone's photos found from the net.

The last dot in the sequence is the one that completes the picture: enter the con artist. It doesn't take a genius to connect the dots to see that all such copyright violations really are eligible for hefty damage awards, and no one's there to claim them. Because most people don't think there's value in their photos, and the fact that there are billions of photos on the internet, thieves can causally peruse the web in search of photos, and users of photos. Given that the infringement rates are so high, and given that both users and publishers of photos are so poorly aware of copyright, the cherries are ripe for picking.

Crafting a solution to the problem is not just a matter of erasing the dots, nor applying the law better, or making people more aware or educated. It's about instituting mechanisms that allow the free market to provide methods and incentives for people to participate in the system, both as buyers and sellers of this highly under-monetized (and overly exploited) copyrightable work.

In the Beginning...

We begin with the basics. The Berne Convention for the Protection of Literary and Artistic Works states that a work is automatically copyrighted the moment it is produced in a fixed and tangible form. For photography, it means that, the moment the shutter button is released, the photographer automatically becomes the copyright holder. No other action is required--no registration, nothing.

Some people are aware of "copyright registration", but erroneously believe that such registration is required to get protection. It's not. Registration does provide extra levels of protection by allowing copyright holders to receive higher damage awards -- called "statutory damages" -- but this is entirely separate from basic copyright law and the protection it provides. Yet, what copyright registration does is advance people's understanding that copyright is important and valuable. It'll be important to keep this in mind while crafting solutions.

In any event, all photographs are copyrighted (by definition) the moment the pictures are taken. For a work to not be copyrighted is highly unusual, and, in fact, more difficult to achieve in practicality than one might think.

The most common reason would be that its copyright term has expired. See this article for details; it basically lists dates of expiration for when old photos fall into the Public Domain naturally. These photos are those that were shot long before modern copyright law was enacted.

Another way a work can be in the Public Domain is if the photo was taken by a government employee (or contractor) "as a part of that person's official duties". For example, photos shot by military photographers are in the Public Domain.

For everyone else, there is no clear and precise mechanism defined by law or any other government resource for one to release images into the Public Domain. (Foreshadow: this is the source of all the problems.) Therefore, it is virtually guaranteed that every photo you've ever seen on the internet is copyrighted by someone. If you aren't aware of that, you're not alone, and it therefore suggests that most the photos you see online should be licensed (such that the photographer is compensated in some way).

For a work to genuinely be in the Public Domain--a status where a photo has no copyright holder, and therefore, can be used by anyone for any purpose--is extremely unusual. So unusual, that one can pretty much assume that virtually no photos you come across online are in the PD.

In fact, in the research I've done for this article, I found that almost none of the copyright experts I spoke with could articulate a confident explanation of how you can rescind your copyright ownership to a work. In fact, most questioned why I would ask such a question--as though I were leading to something else. One person even refused to answer the question unless I stated why I would even want to do such a thing.

Ironically, the recommended method is oddly and deceptively simple: A copyright holder simply states that his photo(s) are in the Public Domain. Yes, it's true--that's all that's technically required. In Stephen Fishman's book, The Public Domain, he writes,

There is no prescribed formula for dedicating a work to the Public Domain. The author or other copyright owner simply has to make clear his or her intentions. For example, stating "This work is dedicated to the public domain" on a book or article's title page would be sufficient. It's not even necessary to make the dedication in writing. It could be done orally, but it's always best to write something down to avoid possible misunderstandings.

While this is all that the "law" technically requires--and there are many legal cases supporting this presumption--the reality of today's social and technological environment makes the application of such law and prior precedent inapplicable in many developing trends.

Take the case of Capitol Records, Inc. v. Naxos of America, Inc., 372 F.3d 471 (2d Cir. 2004). In essence, Naxos copied mint condition patters that contained classical music from the 1930s and sold it on CD. The music was, for all intents and purposes, in the Public Domain (having fallen out of copyright). The sales of the music wasn't contested at first, but when Naxos' sales grew just a bit too much, Capitol Records finally sued for copyright infringement (under common law) and won.

The legal assessment of this case suggests that, just because something may appear to be in the Public Domain, it doesn't necessarily mean that a user of that work is entirely protected.

An interesting summary and discussion (though a bit sensationalized) can be found here, which includes a notable analysis from Norman Lebrecht here.

While prior legal rulings may hold legal weight and standing, they aren't going to prevent or slow down bad behaviors. Social behaviors trump the long arm of the law when the population's actions surpasses a certain critical mass and there are no attempts to curtail the actions by others.

This is the very problem with the Public Domain concept: it hasn't been updated to reflect today's society--or rather, people's understanding of the term. PD was defined at a time when there was no internet or electronic media of any sort. It also hasn't been perceived to need revision since few people actually proclaim their works to the Public Domain. There is no financial incentive to do so, and the few who've released works voluntarily are usually well-known artists, collectors or philanthropists. Hence, their "donations" were never questioned, or disputed. The authors were credible and their lack of legal action against users of those works further underscored the legitimacy of the works' copyright status. In short, there's rarely ever been serious risk.

The two key notations above are risk and credibility, which go hand in hand with copyright and safety from litigation. Today, if someone wishes to publish most any kind of work--even those perceived to be in the Public Domain--there's risk because the credibility of the claim or the claimant can be in doubt.

Liability of Publishing Copyrighted Works

Under copyright law, the publisher of a work assumes all responsibility of liability if the work was not properly licensed from the copyright holder. If the work is not in the Public Domain--despite some random person's claim otherwise--the original copyright holder can file an infringement suit against whoever publishes the work. For a publisher to be truly "safe" from liability, he should get direct consent from the copyright holder. (Bookmark that phrase in your brain--you'll see it again soon.)

You may ask, "What's the real-world threat here? How and why would someone falsely claim that some photo that they don't own is in the Public Domain?"

Remember, the online world is full of malicious people looking to siphon money from the naive and vulnerable. People can be both when it comes to online scams, ranging from the Nigerian email schemes to more modern methods of preying on the jobless (as described by this article in the New York Times).

In the case of "The Public Domain", people's naivete plays right into this, and the malicious agent can leverage this misunderstanding on both sides of a copyrighted work. The less malicious example is less common, and isn't used to siphon money so much as to get a free pass to steal: by falsely attributing a Public Domain notation to a photo he wants to publish, his defense is prepared for later if the copyright holder were to challenge him. "Hey! That's my photo! You infringed." To which the response is, "What? You own that image? When we got it, it said it was in the Public Domain. We can't be held liable for that!"

To a judge hearing this, would he believe the claim? Or would he see through it and realize he's trying to use the image for free--robbing the original copyright holder of his license fees?

Or, perhaps the malicious player is setting a trap: luring an unsuspecting publisher into thinking he can use a photo for free, after which, a bogus copyright infringement claim is filed (with the intent of collecting a settlement)? The exact same exchange between parties -- the same dialog -- can take place when the copyright holder (or the person posing as one) is the malicious agent.

In both cases, misrepresentation of the image takes place. The problem facing any court is determining which side -- the plaintiff or the defendant -- is the malicious player.

What makes the crime all the better is that the judge has to consider a third possibility: that neither side making a false claim at all. The false claim of PD could have been made by an entirely unrelated third party which no one can possibly find. Which of these three scenarios will a judge choose? Would his ruling be consistent across all cases? Would it set precedent for future rulings? No matter what, the advantage is in the hands of the bad actor, because he has little, if anything, to lose.

Making matters more attractive to bad actors is the volume of images. There are billions and billions of photos on the internet, millions of which are passed around so much, it's nearly impossible to know where any one of them originated. By the same token, the original copyright holder probably doesn't know either. Therefore, pretending to be the author of an image is almost guaranteed to be believed.

It reminds me of the now-famous New Yorker cartoon, where two dogs are at a computer, and one says to the other, "On the Internet, no one knows you're a dog."

The Microstock Scheme
This scam with photography is not new; it started a few years ago in using a slightly different scheme, one that was also more profitable at the time than it is now.

About five years ago, microstock photo agencies sprang up in larger masses that gave rise to this problem. These companies are like traditional photo agencies, but are much more lax, semi-automated, and deal with micro-valued photo assets. They sell millions of images submitted by photographers, who in return, receive a percentage of sales. Scam artists started submitting stolen images to these agencies and collecting those royalties. What made this possible is that virtually no stock agencies require proof of ownership, or even that photos be registered with the Copyright Office as an extra level of assurance to image buyers. Stock agencies bear no risk; they have photographers indemnify the agency by warranting that they are the photographer. The warranty may or may not be true, but it doesn't negatively impact the agency, and the bad actor doesn't care--only the buyer is harmed here.

There are already documented cases of this (a few of which can be found using a variety of search terms, such as "stolen photos microstock"). Although most stock agencies don't want to publicize numbers, it's no secret that the problem is getting worse, since the systems are largely automated and there's no way to know whether a submitted work is stolen. It takes very little effort to pull this off, and it's very easy for the thief to shield his identity sufficiently. In the meantime, he collects royalties on the images he submits.

And don't think I'm giving anything away here--cyber-criminals are way ahead of all of us. In fact, the above method is now seen as less lucrative than other related schemes. Most legitimate photographers earn only a meager $10,000 or less per year with most stock agencies, and those are the successful ones. (PDN Newswire publishes surveys every year.)

If you're a thief, you're thinking, why bother with stock agencies and collecting license fees from legitimate buyers, when a greater payload is achieved by threatening copyright infringement against publishers of photos that the con artist has claimed.

Though the problem is far from pandemic, let's not forget the phishing schemes were at one time rare anomalies, too. Once an easy way to make money is found, thieves are entrepreneurial in how quickly they perfect and automate the system. And phishing turns out not to be too different in principle than the scheme here: lure a naive user into believing a frightening claim. "Login to your bank site and reset your password now!" Anyone that would believe that would also believe, "You've stolen one of my images; copyright infringement can be quite expensive, but I'll be willing to settle out of court, saving both of us time and money."

The Creative Commons Scheme
In fact, I cited long ago how this can be done using Creative Commons licenses. The CC is a series of license agreements by which copyright holders permit users to publish their works for free, provided that author credit is given as a byline (among other options the CC optionally provides).

By adjusting metadata in the images to proclaim Creative Commons status, and spreading them around photo-sharing websites rather than stock photo agencies, the game is to entrap licensees who seek CC attributed images, and then sue them once they publish them. As before, the claim is "I never attributed those photos with a CC license! You've infringed!"

The Creative Commons' role in contributing to the growing misunderstanding of copyright is complex and unfortunate. The stated objectives and wider ambitions of the CC are worthwhile, admirable, and valuable to society, but unless handled properly (by paying attention to the side effects of its popularity), it can lose favor if its downsides are realized.

The CC's popularity is more directly augmented by social-networking sites who promote it for their own economic interests: They derive revenue on traffic, advertising, and membership fees--not from content. The more end-users share content online, the more traffic the site gets. The Creative Commons license fuels the rate of photo-sharing, which helps the site, but perpetuates the greater misunderstanding about copyright. The complex agreements behind CC are never read by individuals, who also don't understand the opportunities they give up. Nor is it in anyone's financial interests to warn potential users of CC works that they are assuming some liability in the event the CC attribution is not authentic.

The Public Domain Scheme
How does Public Domain factor into this?

Like Creative Commons, the use of PD works is free. But that's not really the critical detail here. What's shared between these forms of content attribution is that they are the only two ways in which publishers would use works without obtaining consent directly from the creator of the work (or authorized assigns).

Remember when I told you to bookmark the statement that licensees are safest when they get direct consent from the author of a work? Now is where that applies. Again, under copyright law, the publisher bears the liability of using works. And when liability is in play, someone has economic incentive to exploit that legal fact for profit. The consequences are so onerous, that even the threat of an infringement causes wallets to open and cash to come flying out, just to make the problem go away.

What both the Creative Commons and Public Domain have inadvertently accomplished is the creation of a huge liability gap, through which a Mack truck can be driven.

I repeat again that both mechanisms were conceived with good intentions. Of course, it's by design that the Public Domain and the Creative Commons are set up to avoid direct, one-on-one contact between the publisher and the author of a work. This would be the best way for people have their works widely and frequently used by others for free. But this very aspect of those copyright vehicles is leading to misuse and abuse.

And therein lies the paradox. There's an old saying, the road to hell is paved with good intentions. And in the case of CC and PD, the pavement materials used for this road consist of photos and fraudulent claims of ownership and copyright status.

I can speak to this from personal experience. Of the 40,000+ images on my website, I often find anywhere from 1500 to 3000 instances of my images on other websites (not counting those who legitimately license from me) at any given time. And though I can't reliably track infringements on a real-time basis, it's very common for me to find my photos on someone else's site, or on a photo-sharing site like Flickr. In such cases, it's almost always an innocent consumer who's just copying and posting photos they like from various websites they've visited (totally unaware that such copying is a form of infringement). In some cases, I find that my photos' metadata records have been altered in various ways, showing different authors, different locations, and yes, different copyright status, including both CC and Public Domain claims.

In most cases, it's unlikely that those changes were made by the person that presents the page. (I can usually tell by gauging the sophistication or naivete of the person I'm emailing.) Rather, my photos were most likely copied from my site by someone else first, who modified them, and then passed them around the net before the unassuming Flickr user found them.

Could those have been the original malicious players? I've no idea, but one can only speculate what other motivations there may be.

On those occasions where I find my work is being infringed commercially, I always hear one of several excuses by the infringing party in their attempt to absolve themselves of responsibility (and liability): "It said it was in the Public Domain (or had a CC license)." "We got it from a CD that has royalty-free images on it." Or, "Our graphic designer got it from another supplier." "We have no idea where we got it."

As the true copyright holder, I have no idea whether they are telling me the truth. All I know is that I'm not getting my license fees for their use of my image. If their excuses are to stand, they just got away with using a photo without paying for it. One of us is about to get screwed. Who should it be?

It turns out, the law is on my side--it's their responsibility to assure they licensed a work properly from the original copyright holder (or his assigns). Which brings me full circle to the problem. The publisher always assumes risk using photos that they didn't obtain directly from the source. And when most people are so massively uninformed about Public Domain, that risk turns into reality from improper licensing practices.

All this leaves the whole purpose and benefit of Public Domain in doubt: What value is there to it if, in practicality, no one can necessarily trust it?

Solutions?

By this point, you may be thinking of The Orphan Works Act (OWA)--a new proposed legislation that gives limited protection to certain kinds of publishers who may inadvertently infringe on a work because they were unable to identify or locate the author of a work. Though the OWA doesn't actually do what most people think it does, it still doesn't apply here because the bad actors are employing a scheme that involves posing as a copyright holder and threatening a publisher with an infringement suit--not actually filing one.

The legal costs in defending any claim (even a bogus one) is always greater than ending the dispute with a settlement of some sort. Even if an infringer would be protected by the OWA, he still doesn't want to spend lots of money in court defending himself. He will settle.

So, OWA doesn't really protect publishers the way copyright holders have thought it does, nor is it going to be a deterrent for bad actors to fraudulently masquerade as copyright holders. (Besides, the reality of the OWA is that its beneficiaries are different types of organizations, for only certain types of uses.)

So, there's nothing in the current legal system that can really be done to avert these kinds of schemes, given how easy they are to perpetrate and to hide from (especially overseas).

However, history has showed that illicit activity like this is ameliorated when there's a legitimate, mainstream infrastructure that engages the general population. When people are more participatory, they become aware when something appears out of place or suspicious.

The problem with Public Domain is that it's so rare and people are so uninformed about it, people can be lured into a moral hazard. This is a term used in economics that describes how people will do risky things if they perceive they are guarded against the consequences. Here, people think Public Domain applies to things that aren't actually in the Public Domain, so they do risky things with those works.

If people were more engaged in the copyright process, both as creators and users of works, they would be more cognizant of their own behaviors, as well as those of bad actors. To get them more engaged, companies need to invest in systems, mechanisms and infrastructure that creates an economy around photo-based copyright. But the reason none of this exists is because no one can build a business case that gets around all of the unique problems that photography presents (as described at the top of this article).

The only entity that can create such conditions is the government. And this is done not through law or education, or even by financial investment, but by changing certain key policies that give incentive to companies to participate in the system. Their participation spreads to consumers who participate as both buyers and sellers of photo assets.

There are two ways to address this problem. I've already addressed one in considerable depth in my article titled, Proposal for Privatizing the Copyright Registration Process. In short, the government would allow private companies to handle the processing of copyright application forms that people submit with their photos. Currently, a tiny percentage of works are submitted for registration, but if private companies were allowed to process those applications as Copyright Registrars, they would have economic incentive to promote their services, which in turn, informs and encourages consumers to engage in copyright registration. This leads to products and services that people would use to protect their rights--which may include licensing services (like that of a stock agency, but on a massive scale).

The byproduct of such a mechanism would be that people would be far more aware of what copyright is, and where its different from Public Domain, leading to far less confusion about both. Social behaviors would also be more copyright-aware -- people would be more aware of their own photos, which translates to behaviors in the workplace: they'd be more aware of using others' photos as well. This isn't because they'd have a sudden burst of ethics or sympathy, but because they'd be familiar with how the system works. Just as they wouldn't illegally use a song for a TV ad, they also would be aware that they'd need to license an image from the original copyright holder (or his assigns) before putting it in a magazine ad or brochure.

The next thing the government could do -- which could also be independent of the Copyright Registrar proposal above -- is to provide a brand new form for formally releasing the copyright to a work into the Public Domain. This process could be similar to the standard copyright registration form that people use to formally declare their ownership of images. (In fact, there could be a form that combines both to save time for those users who wish to release copyright before even owning it.)

The formal process substantiates authenticity. A potential user of a work he thinks is in the Public Domain would have resources available to him to formally verify it. Similarly, an author could monitor whether his works are being wrongly claimed and classified by others.

The credibility is also backed up by the fact that such registration would be underscored by federal laws, which carry hefty fines for fraudulent claims or representations. (Currently, the fine for fraudulent copyright registration filing is $2500.) It is a long-standing observation that most criminals avoid violating federal crimes, not just because penalties are punitive, but the federal aspect ups the stakes considerably... this, especially if there's a past history of criminal activity, which can even lead to jail.

As a side note, it just so happens that the Orphan Works Act mandates the creation of an online database of copyrighted works. It could very well be extended to include works the people release into the Public Domain.

Obviously, this would have no effect on works that have been in the Public Domain due to expiration. Needless to say, they could very well be treated as they are today, on a case-by-case basis through the courts.

As for the Creative Commons, this is a matter that has nothing to do with the government, or Public Domain, unless the government wished to institute a new derivative form of Public Domain that was a hybrid between copyright ownership and free use and distribution--something like what the CC is. But that's an idea for another blog posting another day.

Anyway, the CC's liability is similar to the PD, but the solution is slightly different because of the lack of government participation. I had proposed a particular approach in a blog entry on January 13, 2008. There, I proposed that the Creative Commons create a registry where authors and publishers alike would register their works (and intentions to use them), so as to authenticate and document who's doing what. That plan was intended to be a stop-gap measure, but it doesn't actually stop a bad actor from fraudulently claiming a work to be in the Public Domain. (There's nothing more unique or preventative about a CC registry that carries with it the heavier weight of a federal crime.)

In other words, CC works still suffer from the credibility question, and that can be addressed by merely requiring that works with the CC attribution also be registered with the Copyright Office. This not only reduces risk for all parties because the credibility of copyright registration is substantially higher than that of a CC registration, but the penalties for violating CC terms and conditions escalates to statutory damages because of the copyright registration. This would effectively bolster the overall perception and enforceability of CC works. They would be better perceived as "safe to use."

The natural objection to such a proposal is that, since few people ever register their works with the copyright office, participation in the CC would dry up. The CC could alleviate that concern by integrating its own registration process with that of the copyright office. That is, by registering with the CC, you would automatically register the work with the copyright office as well.

This tie-in could actually encourage more people to use the CC, both as contributors and publishers of such works.

Summary

My long-standing view of copyright, economics and law is that the "system" works when there are checks and balances that give credibility and protection to the intentions of all who touch copyrighted works: authors and users alike will participate in a system that is less subject to unfair exploitation, which yields positive economic benefits and reduces economic risk. This, in turn, fosters investment into mechanisms that help facilitate and expand on such opportunities.

In the end, the free market will find the balance between what's paid for, and what's free. But without such mechanisms, the state of affairs today is like the Old West: the rustlers rule.

Photography and Public Domain: Part 1

2009-07-25T21:51:00.000-07:00

The term, "Public Domain" has been a recurring theme in the press these days, and the issue (and all it touches) is rather complex. And, as this article will illustrate, it can affect a great many in the realm of copyright and intellectual property, which by extension, has profound economic consequences.

As if the topic weren't complex enough, photography shakes things up even more because of its nature as being both an art form and a kind of "photocopy machine." Is a particular photo of another work merely a "copy", or is it a unique copyrightable work all its own?

That question is at the core of many disputes and misunderstandings, and depending on which side of the fence a given court judgment may go, it can establish precedents for how other copyright cases are judged.

Mix it all up and you get a Mentos-and-Diet-Coke effect in the flogosphere, where bloggers oversimplify positions, skew facts, misrepresent opponents, and pontificate their opinions to rally their core supporters.

Needless to say, there's a lot at stake. So, when reading articles about the matters, it's important to understand certain basic principles.

A recent case that's made it to the mainstream press illustrates how all this materializes: Britain's National Portrait Gallery (NPG) is threatening to sue Wikipedia for copyright infringement for not taking down 3,000 high-resolution photographs that Derrick Coetzee downloaded from the NPG website, and placed on Wikipedia to serve as head shots for important historical figures. The works of art are very old paintings, which are in the Public Domain. But the photos of the paintings are new, and, as the NPG claims, are copyrightable works.

The news made headlines, and the flogosphere took over. As a benign example, there's this quote in a UK photo blog supporting the NPG: "Owners of Public Domain images are in general under no obligation to put them on the web, and (they) have every right to charge a fee for supplying files, and to impose a suitable license on their use."

Another blogger added: I'm a British taxpayer and I'm delighted by all this. Don't we, the taxpayer, own the images?

First, no one owns works that are in the Public Domain. (By definition, the term means "not subject to copyright.") The authors' misunderstandings appear understandable--their statements assume that because the paintings are in the Public Domain, so are the photos. Or because the institution may be funded by the government, the photos are PD.

But neither assumption is true.

It'd be one thing if these blog comments were isolated. But, none of the photo blogs I've read fully address the central question of uniqueness. Instead, they use these similarly incorrect assumptions for a purpose: to suggest that photographers' photos could be stolen the same way, and therefore this event "harms photographers."

No one disputes that the paintings are in the public domain. It's the status of the photos that's in question. And you can't tie the two together quite so simply because there is a difference between a photo itself and what it's a picture of. A photo is a derivative work from the original, and it's true that it may not be distinct enough to have its own copyright status. But that in itself is not a threat. But it is the point of discussion. As far as copyright law is concerned, if it's unique enough, a photo could be protected by its own copyright status (so long as certain other conditions are met). If not, the photo is considered "identical" to the original work, in which case, it inherits the same copyright status -- whether that's its owner, or "the Public Domain."

What people should be addressing are these two questions: What constitutes originality? and How can this affect copyright more broadly?

Let's begin with a simple example: Say you took a photo of a hilly landscape; you own the copyright to it. Now let's say you licensed it to someone who then used Photoshop to add a car and a waterfall into the image. That person created a derivative work from your original photo. Under copyright law, he own the rights to his rendering of the photo, and he can do whatever he wants with it--provided it's permitted under the license terms you granted to him. (Most of the time, these terms indicate that he can publish it for his own use, but not grant the use of the photo to third parties.)

The pivotal point to consider here is that copyright does not transfer from original works to derivative works, or back again. Just as he has no right to redistribute his version work to others, you have no rights to redistribute his version of your photo either. This, even though you own the original photo. His photo is unique from yours and has its own copyright protection.

Now, let's consider "Public Domain" in exactly the same scenario: If the same guy used a photo that's in the Public Domain, he has still created a derivative work, just like before. And, like before, he owns the copyright to his newly created derivative work. That is, he controls the licensing rights to it, and consequently, can prevent others from either using it or relicensing it. If someone wanted to use his derivative work, they'd have to license it from him. Otherwise, it's copyright infringement.

By the same token, he has no claim to the original work just because he owns the copyright to his derivative work. That is, other people can still use (and redistribute) the original work (not his rendering).

In short, the two are solely independent--the status of one doesn't affect the status of the other.

Now let's put it into context of the NPG and Wikipedia case:

The Paintings are in the Public Domain.
The photos are derivative works.
Wikipedia used the photos.
Q: Did Wikipedia infringe?

You'd think that they did infringe because of how I set up all this: I suggested that the "derivative works" are unique from the originals, and therefore, separately copyrightable works. And, that's how misinformation gets disseminated, especially if a commentator has a particular bias he wants his readers to believe.

However, recall that there's still a factor of originality. The question before a court is whether the photos of the paintings are "distinct" from the original paintings. If so, then the photos may be copyrightable--hence, not in the Public Domain. (Wikipedia infringed.) If they are not distinct, they are considered the same as the original works, and are therefore in the public domain. (Wikipedia did not infringe.)

What's your view?

Many people think that because paintings are uniquely different art forms than photographs, each is uniquely different. But there's also the argument that photos can be merely "photocopies" of other works, which is not a form of originality.

Now consider this example:

In 2007, Getty Images created high-res scans of negatives of famous public domain photos, and then licensed those images in their stock library. When people started using those images without licensing them, Getty sued them for copyright infringement. Their claim is that, as part of the scanning process, they removed dust and scratches, thereby creating derivative works that would produce much better prints than the originals would. Therefore, Getty's scans are unique from the originals, making them separately copyrightable. Do you agree? Or are they the same as the originals, causing them to inherit their Public Domain status?

Needless to say, this story got a lot of attention in the flogosophere--meaning that most people ripped a new breathing hole into Getty. Now we're in the Mentos-and-Diet-Coke territory.

An example is in this article titled, "Getty Claiming Copyright to National Archives Images and Selling Them."

The bias is evident in the headline itself. Here, the commentators focus almost entirely on whether the original works are in the Public Domain, giving little credence or attention to the fact that Getty's edits could constitute "uniqueness." The article is also highly slanted by falsifying Getty's claim: it leads the reader to believe that Getty is claiming copyright to the images in the National Archives. But that's note true. Getty is only claiming that their scans and subsequent alterations are protectable derivative works. That is the question up for debate, and it's a legitimate one. It's entirely irrelevant that the original photos are Public Domain, other than to note that if the courts decide that the scans are not original enough, then they would inherit the status of the Public Domain works.

I'm not weighing in on how the courts would decide in such a case, though no one has yet to challenge their claim in court. I'm just observing that what should have been the topic of debate, wasn't. And as a consequence to the slanted portrayal of the company and an intentional perpetuation of misinformation, most photographers feel that Getty's actions are more than just unethical--it could happen to them. That is, if Getty gets away with this, and if Wikipedia gets away with that, then any photographers' images are next: that someone could make some kind of "frivolous photocopy" and then disseminate it without compensating the photographer.

This is nonsense, and such fears are based on false assumptions on two levels. First, both cases here involve "Public Domain" works, not works whose copyrights are still owned by the photographer. Second, the fallacy that a "photocopy" is easy to justify as a unique, protectable work--one in which an infringer can use to justify copyright infringement.

As the reader should have already learned from this article, even if a photo were deemed to be unique from the original, then it doesn't mean that it can be re-licensed or redistributed. It only means that the new work's restrictions are limited to those permitted by the owner of the original: if the original is in Public Domain, there is no owner, so the derivative work can be used for any purpose; but if it's owned by someone, that owner must explicitly grant usage terms to the licensee that created the derivative work. Unless you declared your own photos are in the public domain (which is not easily done, a topic I'll address in my next blog post), no one can just make derivative works of your photos and do what they like.

Determining whether a derivative work is unique is not easy to analyze, let alone decide. I dedicate almost an entire chapter to it in my book on model releases. In the section on Property Releases, I discuss the case of Bridgeman Art Library v. Corel Corp, which is probably most similar to the NPG v. Wikipedia event, and which illustrates why the analysis is not so cut and dry. The first paragraph on that page above summarizes the case in a manner that initially appears (to the casual reader) that it's a done decision:

On November 13, 1998, this Court granted defendant's motion for summary judgment dismissing plaintiff's copyright infringement claim on the alternative grounds that the allegedly infringed works -- color transparencies of paintings which themselves are in the public domain -- were not original and therefore not permissible subjects of valid copyright and, in any case, were not infringed. It applied United Kingdom law in determining whether plaintiff's transparencies were copyrightable. The Court noted, however, that it would have reached the same result under United States law.

Yet, subsequent events (described by the paragraphs that follow), show there is a great deal of debate on various matters that put the whole issue into question. The details of which are not relevant to this article.

The simple fact that so many in a position of knowledge can disagree so strongly is also reflective of the fact that many court decisions are often split, even among the judges who decide these cases. The reality is that drawing simple conclusions on such matters lead to incorrect decisions on matters of commerce and policy. And no one does themselves (or the industry) any good by focusing on matters unrelated to the pivotal questions at hand.

In Part 2, I will discuss the matter of Public Domain more directly, and why photography is the odd and unusual case, distinctly different from all other copyrightable art forms.

Photo Agencies and The Stock Industry: a Matter of Proportion

2009-07-21T22:08:00.000-07:00

In my blog post, "There are Lies, Damn Lies, and Statistics", a series of email replies inspired me to post a follow-up. I'll get to them at the end, but first, a recap:

In that article, I mentioned how a Shutterstock survey focused on a small, select group of traditional image buyers to gauge their purchase expectations over the next year. I went on to say that it is the result of surveys like this (and others) that most stock photo analysts draw the wrong conclusions about the nature of the broader stock photo marketplace, which itself leads to a trickle-down effect of misinformation throughout the industry. In this case, the Shutterstock survey lead many to conclude that the industry is growing. And this perpetuates another misperception that agencies represent the lion's share of sales and revenue, which itself leads to the misperception that making money in stock requires joining an agency.

Each misperception leads to another, and another, and another, until finally, the industry is full of chaos and confusion, myth, and suspicion.

For now, I want to clarify that, just because it's easy to see how most analysts misinterpret information, it doesn't necessarily mean that it's easy to know how to do it right.

A primary example of this can be found in a July 18 article in the New York Times business section, titled, A Matter of Opinion?. The issue is how credit rating agencies were giving high marks to the very companies that were ultimately responsible for the credit crisis that lead to our current economic meltdown. After facts were uncovered, many feel these credit agencies should have known all along that banks and other institutions were engaged in speculative and complex financial instruments that would lead to this.

And that's how I feel about those who cover the photography industry. The evidence is so overwhelming that the predominant view of the stock photo industry is so wrong, that it is flatly irresponsible of the press and analysts to perpetuate that view. It's also important to point out that this is not the company's fault. Their survey and their data is just fine -- their goal was to illustrate other points more german to their businesses. The problem rests entirely within the press and blogosophere who are inappropriately using that survey to support (and perpetuate) incorrect conclusions about the industry at large.

First and foremost: The stock photo industry does not revolve around stock photo agencies. Though there are no scientifically viable surveys that show the total size of the market -- and therefore, the proportion that agencies may represent -- there is a great deal of asymmetric information (indirect data gathered from independent sources) to support the premise that agencies' role is minimal.

I've written many articles that cite multiple data sources that suggest that most stock imagery is licensed on a peer-to-peer basis--directly from photographers. Even though many of these individuals do tiny amounts of licensing annually for themselves, it's their collective economic activity that has far more gravitational pull on the industry than the entirety of stock photo agencies combined. (They are what my books call the "dark matter" of the photo industry: you don't see them, but they are there, and they account for over 80% of the stock photo universe.)

Once taken into account in discussing and analyzing the nature of the stock photo industry, a great many assumptions and other factors are instantly called into question. For one, the effects of pricing and other actions taken by agencies. If, even for the sake of argument, one assumes they are not the center of the universe, but rather, involuntarily pulled by everyone else, how they are presented and covered would not just change industry perceptions, but it could have a trickle-up effect, putting more pressure on industry executives to make better, more economically viable decisions that lead to industry growth.

As for the stock agencies themselves, I have no qualms about how they conduct their businesses, per se. True, I think they leave a lot of money on the table with their pricing, and I think they miss out on a great deal of consumer opportunities, but I don't think this harms the market at all--again, they do not "set trends", they are inadvertent followers of larger forces. I also understand well that running a profitable business is difficult, and growth is often fraught with risk. The graveyard of companies that tried to migrate to a consumer-oriented business is crowded.

Nor do I have an issue with how they market themselves. There was absolutely nothing wrong with the Shutterstock survey that I alluded to in my prior article. Shutterstock's business is to sell stock imagery, and their survey happened to focus on a particular market segment that they felt was their primary buyer base. That this segment of buyers (narrow, though it may have been) happened to show certain behaviors that also happens to underscore Shutterstock's future prospects shows that Shutterstock has a bright future (at least for the short term).

Also, the PR agency that helped promote the message, Morton PR, was particularly honest, insightful and articulate, not just about the survey itself, but in its own recognition that the survey was not (and did not intend to be) reflective of the industry at large. Not every survey is designed for that purpose, and Morton was uncharacteristically open about this, as compared to other PR firms that have contacted me as representatives of other stock agencies.

I also happened to point out that iStockphoto also had a banner year, and is showing signs of improvement for next year as well. This fact being anecdotally supported by a comment from Lee Torrens at microstockdiaries.com on his own bump in sales, despite the fact that he hasn't increased his submissions to any stock agencies.

So, if that data isn't representative of the entire market, what kind of conclusions can we learn about industry trends? And what data do we use to learn this information?

In the spirit of setting expectations correctly, I can address these questions by proxy: my replies to the emails I get on this subject.

First, there's the most common question: "How does a photographer succeed at selling stock if not through agencies?"

Begin by dispensing of the premise that agencies are the de facto channel for stock photo purchases. You can (and should) sell directly yourself, irrespective if whether you also sell through agencies.

As an added note: I strongly discourage anyone from signing an "exclusive" arrangement with an agency that did not reciprocate by prepaying minimum royalties. After all, this is standard boilerplate contract language for book publishing. Why allow a stock photo agency better rights than a book publisher?

Once you take out the exclusivity clause, you can and should sell your images through any and all channels you can. Including--and especially--your own website.

Selling your own stock is easier now than it ever has. Many applications allow you to build your own stock site, that even the most technically squeamish can produce. It's beyond the scope of discussion to address that; I talk about it more in length in this article, which also happens to be in my book on building a photo career.

The barrier to success in stock photography is less technology as it is psychology. Most don't think it's possible (the "agency" fallacy), or they just don't want to put the time and resources into it. There's also a misperception of time: that sales should come right away. Or that they'd come sooner with an agency. No -- It takes time for your stock images to derive revenue, regardless of where they are for sale. Yes, the revenue curves are different between a personal site and an agency site, but "different" isn't necessarily better. After one year, you may get more revenue from an agency site than yours, but over five years, you're sure to get more from your own site. This is usually because you will charge more on your site (because buyers are more willing to pay higher prices--a factor that most agencies don't really understand yet), you will keep more of the revenues (in fact, all of your own revenues), and your own site will likely get more traffic to your pictures than the agency's site will.

The assumption that the agency is going to do better for you and every other contributor is naive. There's going to be an uneven distribution of traffic to contributors on agency sites, and there's a 90% chance you're going to be on the short-end of that stick.

Which leads to next question I get: "It just doesn't seem to me to be that smart to be in a situation where you give away 80 to 90% of your profit. I want to create something where I keep 80 to 90% of the profit."

Stock agencies get 90% of the profit because they're doing 90% of the work. If all you do is take pictures and upload them, then all you deserve is 10% (IMHO). The value of stock photography is not the photo. It's getting it sold. If you go to the effort of creating your own website, generating traffic, building a buyer base, then you too can earn 90% of the profit (the 10% you don't get goes into your cost of setting it all up). I talk about that in my two articles on stock agencies, here and here.

This next email question represents another misimpression about stock sales: "...discussions among a number of us who primarily do landscape, scenic, wildlife photography [...] lead us to think that there is no significant stock market for this type of work. What are your thoughts?"

Most stock photo sales are done in vast, wide, disparate and unstructured transactions around the world. There actually is a very big market for landscapes and scenics and wildlife photos, but there are also billions of such images from millions of photographers too. Even bad photos sell. The problem isn't that there isn't a market--it's getting noticed among the crowd. This leads to two points, one of which I've already made: getting noticed and ranked is a function of building your own personal site and personal presence on the internet.

The second point is that stock photography should not be regarded as a vehicle for generating lots of money with little work.

Stock photography touches many people as either a buyer or seller of a photo. So much so that it is so thinly distributed among people around the world, it's fool-hearty for an individual to approach it with high expectations.

So, what does all this say about selling stock photography as a form of personal income?

For so long as the industry remains chaotic and unmanaged by any central body, stock photography will also be unstructured. There will be little innovation that helps sort, rank and distribute photos based on merit--it'll remain as it is now: arbitrary. And just as you should not rely on buying lottery tickets to sustain an income, neither should you rely on on stock imagery when it is so highly subject to sales channels that are diffuse and arbitrary.

In this day and age, stock falls into Truism #4 of my list of The Five Truism about having a Photography Business, which I originally wrote in 1998. Truism #4 says Diversify Your Business. Only a very few who truly know and perfect the stock photo marketplace should do nothing but stock. For everyone else, you don't "succeed" at stock so much as you use your existing imagery from other sources to augment your income.

Most who sell stock -- even well -- do it as fun way to earn a bit more from their hobby or as a lifestyle business. That's how it was for me for well over ten years of my photo career. And as I am more into consulting now, it's that way for me again.

In closing, I will summarize by quoting my last blog:

Turning a blind eye to the rest of the stock photo universe affects decisions about where to put marketing dollars, where to do research into buyer behaviors, pricing, and business development. If it were generally accepted that the market were larger, agencies could form partnerships with other media licensing agents, social groups and legal networks that reach that larger market.

"There are Lies, Damn Lies, and Statistics"

2009-07-17T23:24:00.000-07:00

There's another old saying about statistics: "The biggest liar in the world is a politician, and the second biggest liar is a statistician."

The root of these witticisms comes from the fact that statistics can be used to support most any argument. It all boils down to what your message is, and what details within the statistical data set support that message.

In marketing, this is called positioning.

An illustration of this can be found in two recent news items. One from microstockdiaries.com reports iStockphoto having publicized their expectation to reach $200 million in 2009 revenues. By comparison, the official figures for 2007 were $71.9 million. A huge gain, clearly.

Secondly, a survey from Shutterstock shows that 40 percent of graphic designers are using more stock photography in 2009 as compared to last year, and 32% of them say they will be using even more stock images one year from now.

In each case, the respective companies want to present data that not just supports the notion that their sales are growing, but that the ingenuity of their business strategies is paying off.

From a marketing perspective, the stats are genuine. However, it's the broader interpretation by the analysts and the press that makes the data deceptive. Is stock photo pricing on the rise from the $1/image bottom spearheaded by microstock agencies a few years ago? Is the industry really growing by the same proportion represented by the increased revenue growth? One needs to churn through the numbers and deconstruct surveys to determine what, if anything, can be learned from this.

I contend that most all photo industry surveys leave out too much critical information to draw good, if any, conclusions. In fact, one could draw entirely opposite conclusions for some surveys. For example, one main unstated detail about the Shutterstock survey is the company's subscription service. Here, a buyer can pay $1 for a photo, or he can sign up for a subscription, where he'll pay $250 a month and download 25 photos a day. On a per-image basis, the economics of the math is quite attractive. Yet, chances are likely that most subscribers never use all the images they download. If one were to calculate the images actually used, they're most likely paying far more than the $1/photo price they could have gotten if they stuck to pay-per-use model.

Of course, the picture gets muddier still, because not all image prices are entirely $1 either. (Prices go up with size.) The fly in the ointment for those analyzing the statistics is that it's impossible to know how much buyers use what they've downloaded. One fellow blogger told me, "It's like an all-you-can-eat buffet: Do people really eat more than if they just ordered off the menu? How you can you tell?"

Of course, with digital imagery, it doesn't matter--you never run out of inventory. Shutterstock makes $250 regardless of how much the customer downloads, or how much he actually publishes. The only thing the company wants to do is optimize the amount of money the customer forks over. And the more attractive the "deal" appears, the more likely he'll pay.

So the surveys that Shutterstock does only has that one objective: to enhance that marketing message. Everyone else, however, is using this information to get a pulse on the health of the stock photo industry. And to do that, we really do need to know how many photos the client is publishing.

While we can't know directly from buyers, we can look at broader industry data on advertising purchases and editorial print to get a rough idea of the health of the industries that use stock photography. And, as we all know, ad sales and printed editorial pages are shrinking. So we can naturally assume that, even though "traditional buyers" may be paying more for subscriptions--as Shutterstock and iStockphoto have told us--buyers aren't using more images than before.

These contradictory trends (higher revenue from stock agencies against lower image usage) should be a strong hint to industry watchers that what they thought (and have reported and blogged about) isn't what's really going on.

While stock photo industry executives can be applauded for making more money, the fact that clients are actually paying more to publish fewer images would suggest that these companies have always under-priced their inventory--that buyers have all along been willing to pay more. It's like the all-you-can-eat buffet: if the price for a full dinner on the á la carte menu is $50, and the buffet price is $5, what affect does it have on the buyer if the price doubled to $10? Probably not much. And this is precisely how most image buyers feel about most stock photo prices, too. They're already too low to care if the price happens to double.

This is yet another illustration that most all stock agencies never put any science behind their pricing strategies. I've blogged before about this before in my article titled, The myth that microstock agencies hurt stock photo pricing.

The question still remains, just what is the sweet spot for pricing? That is an entirely different matter, and the aforementioned article above discusses the science of pricing in much more detail. Ultimately, the article concludes that the problem is that no one does true, statistically viable surveys on who the real buyers and sellers of stock imagery are. Almost all price surveys out there are retrospective--what happened in the past--and are limited to a very small and unrepresentative sampling of the stock industry on the whole.

And that's why Shutterstock's own surveys can ultimately lead to more self-destruction than the temporary uptick they may have gleaned from the marketing message.

Viable Sample Sizes

Unfortunately, there's a more disturbing fact at hand. If the Shutterstock survey is representative of anything, it's that it is typical of the kinds of surveys usually done by everyone in this industry. And the major errors are that their sample sizes are far too low, and the people they survey do not represent a random distribution of buyers. In this case, Shutterstock asked only 300 "successful art directors and graphic designers" (according to the survey report) about their buying habits.

Why only "successful" ones? Unsuccessful buyers are still buyers, and there's plenty more of them than successful ones. One can even argue that "unsuccessful" art directors probably overpay for images. (Another quote, this one from P. T. Barnum, "There's a sucker born every minute.") And if there are more of them, it would suggest the market will bear higher prices than what people currently see. The real question is, which group represents a more accurate sampling of industry buyers and their behaviors?

The PR firm that contacted me about this survey (Morton PR) said in response to my query on the matter:

...the survey doesn't include the average consumer ... many professional photographers obsess about the importance of the design community as an image marketplace.

And this type of thing is at the root of a systemic problem with the stock photo industry: The obsession with the "traditional" buyer.

What is it that constantly reinforces this misperception about the stock photo industry? To illustrate, ask yourself this: What percentage of the cell phone market is represented by the iPhone? Most people think it's rather large. All you hear and read about these days is the iPhone and applications for it. Everywhere you look, people are hunched over their iPhones, thumbing away... often while driving.

Now, let me broaden the question to include all smart phones, such as the Blackberry and all the Palm phones. What percentage of the cell phone market do all smartphones represent? While most people think these devices account for 80% of phones, the reality is that they all collectively add up to only 10%.

The false impression that people have of the cell phone industry is a byproduct of several factors: hype, consumer buzz, and the news media. The psychological effect all these have on human perception translates to our subconsciously looking for smartphones: because that's all we hear about.

The same thing is true of the photo industry: all the "news" gravitates around stock agencies. And by consequence, everyone thinks that's the only important part of the industry. And this belief creates an echo chamber and feedback mechanism, resulting in even more news coverage, bloggers, photo forums, industry trade groups, and of course, survey methods.

A classic (and consistently repeated) example of how this misperception is perpetuated by press-analysts can be found in the article, Will Hobbyists Take Over? Here, Jim Pickerell addresses this question by examining only stock agencies. He concludes:

An examination of iStockphoto's top sellers reveals that those making the most the sales are very active stock producers, not part-time shooters. Over 70% of those with images on iStock have had five or fewer downloads. They are the hobbyists.

The assumption that iStockphoto is a viable representative of where most people buy stock images is more than just incorrect, the agency represents such a very narrow niche of buyers that it is probably least representative of any single buyer demographic. Yet, the constant focus on iStockphoto (because it's the largest of stock agencies) is like the iPhone of the cellular world. Accordingly, his statement perpetuates the misinformation that the company sells the lion's share of images worldwide.

The evidence against this is overwhelming. Even traditional research in the year 2000 showed that only a third of licensed images came from stock photo agencies. The rest were purchased directly from photographers. In those days, only pros were selling stock images--consumers weren't really that engaged in online photo sharing to a sufficient degree to affect the market. But has that ratio changed towards or against agencies over the past ten years? What with the growth of photo-sharing social networks and high-quality digital cameras, why would one think that the ratio of stock image sales would remain in the hands of pros, or even the stock agencies?

Pickerell's observation of iStock's sales and the distribution of pros/hobbyists is quite easily explained: most pros heard of stock agencies, and have traditionally use them, so it's natural that they gravitate there. The same with the photo buyers who use them: they go there because they always have. They all happen to be the native species to that particular economic ecosystem -- it shouldn't surprise anyone that "hobbyists" won't go there, or do well there. That iStock may have many "hobby-like" members is nothing compared to sites like like Flickr which have have millions upon millions of users. And many of them sell stock quite well.

As for the buyers, the story is much the same. We don't expect to see many non-traditional buyers go to agencies either, since they traditionally never have. And since agency's websites rarely come up in general search results for most search patterns, there's no sign that this trend will change much in the future.

Ok, But So What?

Indeed, fear may be at the heart of all this. For if one to were actually do a proper study proving my point, what then? How would that change things?

More to the point: What's the alternative to a stock agency? Though many photographers sell on their own sites, it's not necessarily easy to do. It's a saturated market, and it's hard to get instantly noticed. Most photographers either can't, or don't want to build their own sites, nor have the patience or wherewithal to wait for their site to increase in google rankings so their images are "discovered." Which brings them all back to agencies (not that they do any better with them, by the way--it's just easier to fail with an agency than it is to fail entirely on your own).

The same is true for the traditional photo buyers: they've used stock agencies for years as well, and typically choose the kinds of images produced by those particular kinds of photographers. Tracking the behaviors of buyers who don't use agencies is, admittedly difficult. How do you find them? True, they're everywhere, but that doesn't necessarily help.

Difficult though it may be to target the consumer-photo-buyer, it doesn't mean they don't exist, or aren't worth trying to track. And it certainly doesn't mean they don't have a very large tidal effect on the market as a whole. They deserve attention. Ignoring them is, and always has been, the greatest reason why the stock photo industry has been struggling. There's more to the stock universe than agencies.

It reminds me of the quote from the Blues Brothers movie, where Elwood (Dan Aykroid) asks the bartender, "What kind of music do you usually play here?" To which she responds, "Oh, we got both kinds. We got country and western!"

Turning a blind eye to the rest of the stock photo universe affects decisions about where to put marketing dollars, where to do research into buyer behaviors, pricing, and business development. If it were generally accepted that the market were larger, agencies could form partnerships with other media licensing agents, social groups and legal networks that reach that larger market. (Getty's relationship with Flickr is in name only--there's been no actual change in how business is done. They only want to get access to rights-managed images from a uniquely small and select group of photographers. In short, it's a marketing ploy, not a true embracing of the consumer market.)

Discovering Buyers and Sellers

If the wider stock industry is so large, who are those photographers? To name a few: Wedding photographers, sports shooters, and many other "pros" (as Pickerell defines them) who have begun selling their inventory as after-market stock over the past five years. Do they get more than 50% of their income from stock sales to qualify as "pros" in Pickerell's definition? No, but they're not hobbyists either. And they certainly account for a great deal of sales.

An internal survey done by a magazine that I once wrote for showed that over 75% of pro photographers that don't "normally" shoot stock sell over $15K of stock licenses annually. This isn't a lot of money by Pickerell's definition of a "pro stock photographer" -- or, for a photographer that focuses solely on stock -- but it certainly represents a healthy chunk of stock sales that he dismisses from his calculations. The circulation for that magazine was over 50,000 at the time, which means that 37,500 people earn $562,500 annually from stock sales. While not huge by itself, it's one (small) magazine. Extrapolate to all pro photographers everywhere, the numbers get impressive: 500,000 photographers would generate $5B in stock sales annually, and Pickerell's data doesn't take into account.

And those are the pros. What about non-pros, who outnumber all pro photographers by orders of magnitude? We don't know specifically because no one has done that kind of survey. (Doh!) But, we can look to other data that might suggest what that might look like. For this, I revert back to the question of who the buyers are:

The Small Business Administration says that small businesses account for 80% of the american workforce. If so, this segment of the US economy must easily overshadow the "traditional photo buyer". And it would be naive to assume they don't license imagery. So, where do small businesses get their images?

A survey I did in 2007 of individual stay-at-home graphic designers and page-layout contractors (many of whom were part-time) shows that they purchased an average of $10K of images in the past year for their small-business clients. They create ads and brochures for professional services (doctors and lawyers) and family-owned businesses (drug stores, hardware shops, restaurants and cafes), among others (sometimes including larger corporations).

In fact, smaller companies were five times more willing to pay higher license fees than larger companies. This should also be no surprise, as big companies have weight and negotiating skills. WalMart negotiates for lower wholesale prices from suppliers, for example. On the other side, consumers are willing to pay higher per-unit prices as a general rule anyway. Consider ATM fees, which are usually $2-3 per withdrawal, regardless of the amount. Most consumers withdrawal $20, making the fee 10% of the transaction. Richer people withdrawal up to $200, reducing the fee to just 1%.

If stock agencies really wanted to improve per-image pricing, target the consumer. While they say they do, over 75% of the buyers I surveyed never heard of "stock photography" as a business. (Several thought I was referring to "stock footage", as in film reels.)

Of those who were familiar with stock-photography as we know it, only 60% heard of Getty. And only 10% of them used Getty. (In follow-up interviews, they heard of Getty because those are often the by-lines for newspaper photos; not because they purchased from them.)

So, where do they get their images? The #1 answer: "Google". Most people use the internet to find images, and extremely few image search results are from stock agencies. They bought directly from the photographer. Those photographers were not necessarily pros either. One woman said she expressly avoided buying from pros because they make the purchase process too difficult; they would require her (and sometimes her client) to sign lengthy license agreements. "It's just not worth the time. The cost of the image isn't the problem, it's the hassle."

If they're buying images and avoiding pros, one can only assume these are "hobbyists."

The #2 answer for where people buy images was specifically characterized as "Local Photographers." In follow-up interviews, the pattern is the same: friends, wedding photographers, art photographers (found from local galleries), referrals, and even their own photography.

The average purchase price per image from these hobbyists: $150/image. A price even Shutterstock would envy.

Was my survey representative of the industry at large? Not according to the rules of statistical sampling and random choosing of participants. I make no claims about the science of my methods. I conducted my survey by tracking down and interviewing the people who created the brochures that I receive from local businesses in my mailbox everyday. I also find those who create tri-folds that you find in hotels--the kind that advertise helicopter tours over the Grand Canyon. Things like that.

It's also not the first time I've done this sort of thing. But I get roughly the same results every time. It's admittedly not scientific, but the consistency of the responses certainly suggests that the "traditional" surveys done by industry analysts and trend-watchers is questionable.

Another fact my survey continues to support is the already-established truism that most stock sales are done on a peer-to-peer basis. That is, the buyer goes directly to the photographer. And this is also why it is hard to truly nail down the exact size of the stock photo industry. Unlike cell phone sales, where data is gathered by organizations that mine quarterly reports from publicly traded companies, photo sales are not done entirely through known entities who are required to release this information. (Heck, they may not even know themselves, because it's too "casual" as an income line item.)

Spending Habits

Having a better sense of who photo buyers and sellers are is one thing. But another important element is the analysis of their spending habits. This is another area where most traditional surveys fall quite short.

For example, surveys should break down buying habits by industries: which buy more, and which don't? Certain sectors do quite well in recessionary times, such as consumer staples, beverages, entertainment, to cite only a few. Would these companies show a trend towards one kind of photo source for imagery than those from other industries that don't do as well, such as construction, transportation, energy, travel? You can imagine that the old GM suppliers are probably not buying a whole of ads or spending marketing dollars, but companies that sell to grocery stores are probably buying a heck of a lot of imagery for their marketing programs.

Another data point about spending habits that's missing from the Shutterstock survey is "patterns." It showed that photo buyers "used more stock photography than they did a year ago." But that presents more questions than answers. The statement says nothing about total dollars spent on photography, or the distribution of how those dollars were divided. One naturally assumes that money has been diverted from one kind of photo expenditure (such as assignment) to stock. But that's just an assumption -- the survey didn't ask that.

For instance, if buyers spent 200% more on photos than last year, but only 10% more of that went to stock photo purchases, then it is still true to say that they "bought more stock than last year," even though their spending on other photo sources was even higher. (Of course, this is just a hypothetical to illustrate flaws in the survey methodology. I doubt this was actually the case here.)

The Business Paradox of Doing "Real" Research

In a follow-up interview I did with Felicia Morton, the president of the PR firm that helped orchestrate the survey and who represents Shutterstock, we discussed the difficulty in conducting what I would consider to be a viable study on the subject. The challenge is that a broad and detailed survey is expensive, so someone has to fund it. I asked whether someone would conduct the survey and sell the data to photo buyers. She said it was unlikely -- that companies like Nielsen Research wouldn't do it because they wouldn't think there's a sufficient number of buyers.

Seems obvious. Coincidentally, I had just such a client and would have been willing to pay for this research. So, I followed Felicia's lead and tried to contact someone at Nielsen to see what it would take to do the kind of research necessary to get a much more accurate handle on who really buys and sells stock images in the USA?

But, no one would return my call. I called two other national research firms, and one returned my call, and we spoke at length. But I was asked not to quote them by the time we got to the end of it. What I can say is that there is a general perception that the stock licensing industry probably is as large as I've always said ($20-25B), but the research firm doesn't believe existing players in the industry have any desire to either purchase the data, or (more importantly) to have the data out there if it were true. (This is why the firm didn't want to be named.)

Why would existing companies want to maintain the status quo if it were known that the stock industry were 10x larger than people think? Because it would require them to rethink their entire business model, which they would not be able to afford, which itself could compromise their current position. Therefore, with no one to buy the data, there's no financial justification for doing the research.

We also priced it out: it'd cost about $200,000 to do a real, nationwide research survey of consumers in determining what actions they've taken that might constitute a financial transactions involving stock image licensing.

Needless to say, when I reported this back to my client, he balked. His main concern wasn't so much the price (not that it would have happened anyway), but something more surprising: if the market really is $20B, everything changes. The big risk: one has to actually penetrate that market, or it might compromise the company's existing market position. It's hard enough to compete against companies that are already bigger than they are, but if it were known that there's far more fruit on the tree, then the bigger companies are already in a far better position to grow, ranging from financing to partnerships, and so on.

The question seems to have shifted now. It's not whether the market is so big, but rather, is it too big to tackle? Unless and until someone comes up with a business model that can successfully service the consumer-oriented stock photo buyer and seller -- which itself would require a monumental investment for a small company -- no one's going to try it. And if no one tries it, no one's going to spend money on a survey that shows the true market size. Moreover, no one wants that data to known, or it'll force the issue, and everyone's at risk. The industry is locked in its own self-imposed a stalemate.

This is not only understandable, but history has shown a similar phenomenon: again, in the cell phone industry. For years, not one of the major cell carriers was willing to "open up" handsets to allow consumers to download applications, not because they didn't think there was opportunity, but because it would disrupt their existing business models, which had been fine-tuned to a science. Furthermore, no one was willing to do the research to determine if there might be growth opportunity. Anything that might cause them to change their existing models was deemed as "risky."

When Apple finally disrupted this assumption, the model changed, and with it, so did the industry. Well, sort of. Cell carriers really haven't lost the stature they had before, but it sure has cost them considerably to weather the transition. But the real reverberations are being felt in the handset market -- all carriers (except for Apple) are suffering unprecedented losses. (The financial section of the July 16 edition of The New York Times had sequential headlines of reported losses by cell carriers.)

So, what will it take for the stock photo industry to change its ways and realize the potential of the consumer as both buyers and suppliers of stock photo content? It's unlikely to be spearheaded by an inside photo trade organization or stock agency, and the stock industry analysts, bloggers and pro photographers are locked into the position politically that the universe "is and always has been about agencies and pro photographers." (See my blog on the Economics of Controversy.)

It'll most likely be an outside player who sees the untapped opportunity of the global opportunity with stock imagery, much as Apple disrupted the cell phone industry. (An event that no one could have predicted just a few short years ago.) One thing for sure, whoever does shake the ground for stock, it will start by funding a statistically viable study.

I've predicted on my blog and in interviews that I think it'll be an existing media licensing company that merely expands its content library to include still images. They're already big, and they already have business models that include "consumers" as both producers and buyers of content. The stock licensing market is potentially enormous, and the existing stock agencies are drastically undervalued (because they don't recognize the industry as large.)

then again, I've heard of no rumors so far.

Free seminar on model releases

2009-07-07T10:48:00.000-07:00

For those living the in San Francisco Bay Area, you can come and hear me give a presentation on model releases, courtesy of the ASMP, on July 14. (It is purely a coincidence that this is also Bastille Day; please, no fireworks inside the building.)

Event details are here: http://www.asmpnorcal.org/drupal/?q=node/780

The event is free for ASMP members. Non-members: $10. I'm not getting paid for this--I'm donating my time. I will be selling my model release book, but again, I don't make money on it--I sell it for the same price I buy it from my publisher: $20. The advantage to buying it at the event is no sales tax (I'll eat it), and no shipping charges.

Oh, food is also free. It's good, and lots of it. In fact, if you're a starving photographer, you can come just for the food at 6. I will be there early to meet, greet and argue with.

An API to the Copyright Office?

2009-07-01T13:13:00.000-07:00

I got the following email that I thought I would just post directly here to my blog (with my response).

Have you heard anything further about the USCO possibly switching to a "reseller" system for copyright registrations? I've been hearing a rumor lately that they are about to start beta testing a program.

It was mentioned in this presentation for one:

http://www.c-registry.us/CEPIC/MILE_Orphan_Works_Solution_060309.htm

I can't find any formal announcement on the USCO site nor have I been able to find any other stories on this. I don't subscribe to every single mailing list though. Have you heard anything?

With respect to the c-registry.us site (the link you sent), on slide #4, the "reseller" program they refer to is not the same as the "copyright registrar" proposal I put forward. More on all this in a second. But first, it should be made very clear that "c-registry.us" has absolutely no affiliation with the copyright office. I am constantly getting questions from people about this company and whether they are some sort of commercial "retailer" that has some special relationship with the CO. The danger is that when they say something like what you referred to above, people believe it to be an official statement from the CO.

Officially, you should just call Maria Pallante at the CO. She's extremely accessible and very pleasant to talk to. Alternatively, you could call David Christopher, who sits next to her. He is more up-to-date on the technology stuff. You'll get all your questions answered instantly. Whenever there are rumors floating around, call them to get the scoop.

Now, to the "reseller program": whether this is what c-registry.us is referring to, I'm not sure, but I what I do know is that the CO is creating an API (application programmer's interface) that would enable third-parties to write their own UI (website, applications, etc.) that would allow users to submit new copyright applications to the copyright office for processing. It would NOT provide access to content already there, nor would it expedite the process, nor would it allow third-parties to process those applications or act as resellers or retailers for the copyright office. The API offers nothing more than what is already provided by eCO.

All that said, it does beg the question: Why? The answers may appear obvious, but no one has formally stated "who" gets to use this API, under what terms and conditions, or any other business-related objective. For now, we just know it's in development. (Limiting access of this new API would done through access keys, which is assigned to authorized users. This is identical to APIs used by Yahoo, Flickr, Google, Facebook, etc... There's nothing magic here. Various levels of security are available to keep stuff safe and locked up.)

There are several things to keep in mind about this API:

1) It is very early in the process. They have contracted with a vendor to design the API specifications, and that part is still very new. I asked to review the material, but I was told that it's too early to see anything. I was not given any time frame for when this might be done, or even a time schedule for deliverables. They aren't keeping it "secret" -- clearly, they told me what they were doing -- but they aren't exactly open about it either... which leads to:

2) The API draft specifications or early-developer process is not open to public review. (I have not been informed of a beta program, and I am on the list of people to be notified if/when such a thing is started.) In my opinion, this is a big red flag--the CO should do this entire process in the open, exactly the way the IETF (internet engineering task force) does with all new protocols and other specifications. The CO should have a public forum and developer application list to allow everyone to contribute useful and important feedback on proper design and implementation from the very outset, not *after* specifications and preliminary applications are built. Furthermore, it would be best for the CO to expressly avoid having their OWN implementation, and instead, just publish the specifications and allow third parties to implement their own prototypes, which the CO would then certify if they met certain criteria. (One of which would be for the code to have open-source status.)

3) It should be known that, just because there's a back-end API, it does not solve the problem of back-logged registration applications. In fact, it would flood the registration backlog even worse because more people would be filing applications. That's NOT to suggest this is a bad thing! IMHO, the worse the backlog gets, the quicker the CO will be forced to solve the problem. And the only solution to that is to outsource the processing of applications to third parties. In other words, "copyright registrars" as I've been proposing would do much the same administrative tasks that the CO currently does in-house. They would be trained and certified by the CO, thereby performing exactly the same duties and responsibilities, but can be farmed out to an infinite number of companies. This would alleviate the back-log, improve efficiency, reduce costs (which bring down filing fees) and increase participation in the copyright registration program. Everyone wins.

The API that the CO is doing has nothing to do with my proposal, nor would it affect anything that already exists in the copyright process today. And of course, it has nothing to do with the c-registry.us website.

It does still beg the question: what direction does this suggest that the CO is moving? The API would eventually be necessary for a "copyright registrar" to exist, but that idea has not yet been accepted.

What the API will NOT do is streamline the application process... It doesn't really matter how backlogged the CO may happen to be in order to have your works protected--all you need to do is apply to get the date of registration established. Granted, having the certificate does help considerably in the legal process, and it does avoid potential risk that a given judge might rule inconsistently with precedents. For such conservative applicants who really need to protect their valuable works (such as timely news and/or celebrity material, for example), expedited registrations might be worthwhile. But, for the vast majority of people, the eCO is sufficient to get protection immediately.

In summary, I think the API is a step in the right direction. It isn't perfect for the reasons noted above, but these things tend to work themselves out.

dan

Quick Note on Current Orphan Works Disinformation

2009-06-20T07:03:00.000-07:00

I am being mildly bombarded with questions and mostly links to articles on other photographers' blogs about this one bit of disinformation about the Orphan Works Act, so I thought I would write a very short blog entry to set the record straight.

The disinformation being passed around everywhere is this:

"Someone can now steal your photo and claim it's an orphan work, and you have to spend $50,000 filing a lawsuit just to prove them wrong. No photographer can do that!"

Folks, this is a senseless argument because someone could steal an image and claim anything, not just that it's an orphan work. They can claim they shot it themselves, or that they're using the work under Fair Use provisions, or that it's got a Creative Commons License. Any of these arguments could be entirely baseless and untrue. If the argument is that the photographer would have to spend $50,000 to go to court, and he can't or won't do that, what makes the OWA any different than any of these other threats?

The reality is that the photographer does not have to spend money to go to court or even "hire" a lawyer. All the photographer has to do is engage with a lawyer on a contingency basis (where he is paid only if money is collected), write a letter to the infringer that says that says that their use of the image is a copyright violation, that the statutory damages for such a violation ranges from $750 to $30,000, but an amicable settlement can be reached.

At this point, the infringer has a decision to make, is he going to spend $50,000 going to court to defend his claim that he's protected by the Orphan Works Act? Or is he just going to pay the photographer a couple thousand bucks just to make the problem go away? Remember, the infringer's lawyer costs $500/hr, so he already has to spend that much just the show him the letter you wrote and draft a reply. The lawyer is also going to advise his client that, in copyright infringement claims, the onus is on the defense to prove their case, not the other way around. What's more, if the photographer wins, he gets his legal fees reimbursed. But if the infringer wins, he does not get his legal fees reimbursed. Even if the OWA really did provide a mechanism for infringement -- which is does not -- the defense still has the burden of proof, and has to spend the money to do so, and he does not get that money back. In short, infringing bears nothing but risk.

You can argue up and down the merits or details of the OWA till you're blue in the face, but the pragmatic reality is that the infringer will pay the photographer a settlement, even if he thinks he's right.

And that's why a lawyer will be willing to take your case on contingency. You don't have to spend a dime to protect your works.

And you never did.

The Economics of Controversy

2009-05-31T23:53:00.000-07:00

There’s an old folk tale that tells of Neil Armstrong having sent a letter to the leader of the Flat Earth Society with an enclosed photo of the Earth taken from space. His one-line inscription simply read, “SEE?!” To which Armstrong got a reply saying, “We never said the Earth wasn’t circular!”

With some people, there are arguments you just can’t win, no matter how persuasive the evidence. And most of the time, such arguments aren’t worth having anyway.

Other arguments are worth having because you really believe in the cause.

Some arguments go on so long, they seem both endless and senseless. Remember the Monty Python skit about the man who pays another man to have an argument with him? The first thing they start arguing about is whether or not he even paid. “No you didn’t!” “Yes I did!” “No you didn’t!” “Well if I didn’t, why are you arguing with me?” “I could be arguing in my spare time!”

And then there are those arguments that turn into “controversies.” These are special arguments where the issues galvanize core groups of supporters on both sides, tempers flare, and before you know it, it’s no longer a Monty Python skit.

Though it may be odd to see it this way, here is where new economic ecosystems begin to form. As a controversy gains momentum, more and more people benefit in one form or another by keeping it alive. If it garners enough critical mass, real money can be made, social fabrics can be formed, and political affiliations created. All of these represent different goals and objectives for the individuals involved, which make the intertwining of motivations, methodologies and psychological dispositions fascinating for behavioral economists: those who study people’s behaviors as they pertain to market conditions and self-interest.

In the photography world, there is no better place to study behavioral economics than in the controversy surrounding the Orphan Works Act. And from these observations, one can look for known patterns of behavior that themselves help forecast where there may be investment opportunities.

The Controversy: The Orphan Works Act

The OWA happens to be the perfect controversy because its complexity involves both law and economics, each of which are beyond most people’s understanding, even the leadership. This makes it ripe for oversimplification, misinformation, disinformation, and persuasion.

In the case of the OWA, many who preach aspects about it simply aren’t educated enough on the fundamental principles involved to understand what they’re saying, and the “base” followers are not the type to ask questions—just to “believe.” Straw-man arguments are thrown up all over the place. The classic example is one that I mentioned earlier here: "someone can now steal your photo and claim it's an orphan work, and you have to spend $50,000 filing a lawsuit just to prove them wrong. No photographer can do that!" This is the galvanizing argument that's now settled into the mantra in photo discussion groups.

As my blog post points out, it's a senseless argument because someone could steal an image and claim anything, not just that it's an orphan work. The summary of that article is that it's the infringer that has to spend $50,000 in court to defend his claim that he's protected by the Orphan Works Act. The pragmatic reality is that the infringer will pay the photographer a settlement, even if he thinks he's right.

Yet, none of this very basic, standard legal information is disseminated by anyone in the artist community hierarchy, the photographer community in particular. In fact, quite the opposite. But why?

Once again, it's all about behavioral economics: there are benefits to keeping the issue a controversy, and in keeping the controversy alive.

The Players
Several unique sets of conditions converged at once that allowed the OWA to become the nuclear power station within the photographer community. The stock photo industry has been suffering from economic hardship for quite some time, which itself has threatened industry leaders and organizations, who naturally respond by finding galvanizing issues to maintain control and continuity.

At the bottom of the ecosystem are the core (“base”) believers who are told they have a stake in the game: "If the OWA passes, you will lose your rights to protect your images." The base believers buy into this, and reap psychological dividends by being part of an impassioned movement against the OWA. It’s in this ecosystem where there is a rather dogmatic and cohesive community that typically responds well to populist rhetoric, while being derisive of non-conformist views. In fact, the use of populist rhetoric is prototypical among leaders of economically distressed groups.

On the sidelines is a panoply of catalysts, eager to participate as well: reporters who objectively journal the events, investigative reporters who tell the story from behind the scenes, lawyers and media consultants who work on behalf of their clients to effect a certain outcome, analysts who churn the data to assess the likelihood of various outcomes, and the investors who seek opportunity. Everyone has a vested interest in the process. And therefore, such people become participants.

I too am a player in this eco-system. I’m an analyst, and my economic benefit is the clientele who pay me to do objective research so they can make financial decisions (investments or divestments) based on the likely outcomes of certain events. The Orphan Works Act is one such event. Since it also happens to be a hotly controversial one, at least within the photography ecosystem, the question for these investors is not whether the OWA puts the future of image licensing at risk, but where’s the opportunity for investment? Smart money goes to companies and individuals that know how to capitalize on opportunity. In this case, opportunity lies within those organizations that have a solid, realistic understanding of the state of affairs. My job is to find those opportunities.

Analyzing the Ecosystem
To understand how I do this, I talk to people. For example, I had a conversation with a lawyer who has been rather outspoken against the OWA on behalf of a trade association for a different industry. I asked, “If the OWA passes, and if a case came up that you had to prosecute an infringer who tried to hide behind it, what would your strategy be for dealing with this?” Essentially, I was given a more balanced legal analysis on why the OWA isn’t a threat to artists. The response I got was used as the basis for this blog entry, modified to address the photo space:
http://www.danheller.com/blog/posts/orphan-works-act-courts-and-law.html

So, I then asked, “Why don’t you say anything like this publicly?” The response: “Because my client doesn’t want me to. I’m paid to make these statements and support the objectives of my client.” To which I replied, “Why aren’t you telling your client to soften up on the OWA?” And then came the unsurprising answer, “Because it galvanizes their membership. Renewal rates are up, and they haven’t seen as many new members join in years.” One can only surmise the additional social and political dividends the leadership receives as a result. Short-term economic benefits clouds longer-term judgment. Text-book Behavioral Economics at its finest.

Needless to say, the companies and individuals that hired this lawyer would not be considered “worthy investments” by my clients. (There’s nothing wrong with the lawyer, of course; but that’s not who the investors are interested in.)

To illustrate a more tangible, but more complex example, recall the time when Getty was looking for a buyer to take it private. The company was public, but its share price was dropping quickly, revenue and profits were evaporating, and the nature of stock photography itself was going through a major transition.

One particular suitor asked me to look into an element they believed to be a vulnerability of the company: the economic effect of being “responsive to photographer demands.” Because the investor believed that Getty made key strategic decisions based what its photographers wanted, the question was whether photographers' demands were economically sound. That is, if Getty appeased photographers, would they make more or less money as a result?

A hint that gave them concern was Getty’s acquisition of iStockPhoto. It wasn’t the acquisition that bothered them, of course. It was a good investment. The concern was: why did it take them so long? If Getty was an innovator in the stock photo industry, they should have done this years earlier--not late in the game. The critical question was: what slowed them down? The answer is photographer objections. Because Getty defers to photographers too much, they have a record of failing to make wise, profitable and economically sound business decisions.

What might the long-term risks be? Are photographers always so wrong? Or is this just an isolated case? What does this say about the future? Would Getty lead forward, or will photographers hold the company back, causing the company to miss or delay other key strategic moves as well?

What I was asked to research had nothing to do with Getty, per se, but the effectiveness of pro photographers’ influence on their own industry. Specifically: at key turning points in the economics of the photography world, what were the “photographers’ positions” on those events, and were their forecasts right? Did they fare better or worse as a result of their collective recommendations to their community membership?

Without getting into the details of my report, the data was rather bleak for photographers. In the 1970s, after the supreme court ruled that the ASMP violated “restraint of trade” rules by publishing price lists, the union was disbanded, and a power vacuum resulted. A variety of disparate trade groups started forming, each of which differing only slightly from the others. Yet, at no time did the socio-political strategy change; the culture of the photographer community remained strongly union-oriented. The message remained “all for one” with a strong discouragement of individuality in building a career. Conformity was and always has been the social rule, which itself runs counter to open-market economic conditions.

At no time did I find any key recommendations by the pro photographer community that resulted in positive economic returns. At one point, they discouraged photographers from shooting “stock imagery” because it would “ruin the careers of assignment photographers.” They also discouraged using the internet as a place to sell photos because “people will only steal them.” They also said it would “compete with traditional stock agencies” (who themselves resisted using the internet till royalty-free images moved from CD-ROMs to internet sites). Their poor analysis and responses to matters such as royalty-free, microstock, social-networks, consumers, semi-pros and other industry trends have all been entirely off base. I’ve written extensively about each of these phenomenon at great depth on my blog.

Photography trade associations’ economic advice has also been similarly off target. Membership levels in most all groups have seen very little (if any) growth, despite the fact that hundreds of millions of more people own high-end digital camera gear and contribute larger and larger proportions of images to the stock photo base. The outright rejection of the consumer and weekend photo enthusiast has been one of the primary factors associated with their inability to grow financially, which has also weakened their political influence. (At one time, I recommended that PDN and trade associations charge a maximum of $25/year for subscription and/or membership fees and start running programs that appeal to non-pro photographers that somehow engage in monetizing their images, even at lower levels.)

An incident in my report that summarized it all was when the SAA sent a letter to Getty images strenuously objecting to their having lowered photographers’ royalty rates, seemingly unaware that the company’s sales and profits were plummeting. (This would be like auto worker unions asking General Motors for raises just before they go into bankruptcy.)

Of course, the responses from trade associations have always been akin to “we are giving advice, but no one is taking it; if photographers did what we advised, then we wouldn’t be in this mess.” The reality is, they are taking the advice, but it isn’t working. At some point, one just has to realize the Earth really isn’t flat, and it’s not worth having that argument anymore. There simply needs to be new blood. There’s too much homogeneity. There’s no tolerance for dissent. Perhaps the best quote that encapsulates this situation is one from the 9/11 Commission Report about the errors in judgment that lead up to invasion of Iraq: “When everyone around the table agrees, someone’s got it wrong.”

In general, photographers have had no true economic leadership, and this has lead to a vacuum of economic opportunity. And the evidence is as overwhelming as the Earth is spherical: extremely few stock photo agencies are profitable, and of those that are, the margins are slim and getting slimmer; “publicly traded” stock agencies have had to take themselves off the market (well before the economy turned downward); most stock photographers have reported declining incomes steadily for years; and the per-image license fees have been dropping since records were kept.

When I collect data and do analysis to generate these reports, I have no personal objective, vendetta, or an argument to settle; I don’t care. I just want to be accurate so my clients can make fiscally responsible decisions. And I’m not the only one to come to these conclusions. With the exception of a few very speculative investors, the “smart money” stays away from anything in the stock photo sector. As one of my clients put it, “so long as a company is reactive to the pro photographer community, it’s a losing investment proposition.”

The problem is, there are too few companies that deal with stock photography that don’t worry about the political fallout from discontent raised by the photographer outcry.

If this is the case, why doesn’t the photographer community leadership recognize this and adjust their message to the base? Here’s where we come full circle to behavioral economics: there’s money, politics and reputations involved. Different people seek different objectives, and without centralized leadership, you hold onto what you’ve got. As one executive at a trade association told me, “It’s the perfect controversy for us because we win whether it [the OWA] passes or fails. If it fails, we can say we won; and if it passes, then our members will benefit, and we can say it’s because of what we did. Taking a stand against it is the only position that makes sense for us. Besides, it brings everyone together.”

What Investors Look For
Smart money, smart lawyers, and smart legislators all know that there are no risks to either artists or licensors with the OWA. So, the political theater from the blogosphere is uninteresting to investors, other than to know where not to invest. Investment money looks for signs of intelligence. Any company or investor making business decisions based on photographers’ outcries would be considered a poor investment.

But don’t confuse this with an anti-photographer sentiment. Investors are not anti-anyone. They just don’t want those who don’t understand economics interfering with business. If a company were to exist that keeps photographers happy, while also pursing business goals that show profitability, then that’s great. But the catch-22 in this economic climate is the challenge: the internet and digital photography changed the game from how photographers once viewed themselves, and unless and until they change their cultural disposition, they’re not going to be part of the solution. The stock photo industry has already shifted to be a high-volume/low-margin model, which runs antithetical to how photographers want it. For so long as they don’t accept that, they will be at odds with any company that attempts it. At which point, the company has to choose which path to take: upset the pro photographer and succeed, or acquiesce and fail.

It is for this reason that I’ve predicted for several years that, barring any new disruptive innovation we haven’t seen yet, or a shift in photography-industry culture, the future of stock photography is likely to be inherited by much larger media companies that already deal with massive media distribution and licensing. They have no qualms about playing “Borg” and assimilating the photographer community into the flying cube, all the while chanting, “Resistance is futile.” Once such media behemoths realize there’s money to be made in photography, they will likely start acquiring agencies and photo-sharing sites, and building out the high-volume licensing model that is the only option left for stock anyway.

As for the controversy about the OWA, it’s just a theatrical venue for people to gain their individual advantage. Sure, there may be fine-tuning of language that industry leaders will take credit for to great fanfare, but that’s also part of the game. The Earth is not flat. But as long as there’s some benefit to people arguing about it, the controversy will continue.

Sigh: The OWA again

2009-05-24T23:18:00.000-07:00

CEPIC’s website lists as its primary objective, “copyright protection for photography.” Indeed. But unlike many other things photo-related, copyright is one that extends well beyond EU countries, especially when the USofA starts throwing its weight around, as it is currently doing with the Orphan Works Act. As I’ll soon discuss, this is a global issue, not just an EU one, which is why it is taking center stage in photography blogs and discussion forums. Unless you’ve been hiding in a cave, here’s the scenario that has everyone’s undies up in a bunch: someone finds your photo on some website somewhere, and they want to use it for a marketing or advertising piece, but they have no idea who owns the photo. Under current law, if they publish the photo and you find out, you could sue them for copyright infringement. Under the provisions of the OWA, you could still sue them, but they could be protected from paying statutory damages if they could claim that they did a “diligent search” for the image’s owner, but were unsuccessful. (Well, they also have to meet several other technical criteria, but we'll leave those aside for the moment.)

But the reality is quite different. In fact, several things are at odds between the myth and the reality of the OWA.

To begin, we start with the most specific item: the text of the bill says that if the publisher of the work has done a “diligent search,” then the OWA would provide protection from statutory damages in an infringement claim.

Why is this important? First, if we’re talking about copyright claims in the USA, unless you register your photos with the copyright office, you can’t claim statutory damages anyway. In other words, if you don’t register your photos with the US copyright office, your claim against any infringer–with or without the OWA–would be based on calculations that are unaffected by OWA. It’s as though it never existed. (Most non-US countries don’t have statutory damages, so the OWA would have no relevancy there either.) And, since only about 1% of pro photographers or stock photo agencies bother to register their works with the US copyright office, 99% of the photo industry would be almost entirely unaffected by OWA.

True, there is one caveat to this that only a handful of legal observers have ever mentioned (and never in photo circles): claims of profits. Under the 1976 Copyright Act, copyright holders can sue for profits gained as a direct result of using a work, even if it hasn’t been registered with the copyright office. There is ambiguity as to whether the various versions of the bill allude to damages other than statutory damages, such as “claims of profits.” If so, the OWA could affect some claims made by copyright holders. However, only a tiny fraction of image uses are ever directly linked to profits anyway. And even then, the OWA already gives judges latitude in such decisions by including text that says, “the court can consider what the effects of registration would have been.” So, this technicality is not something that warrants much concern.

It’s still more relevant to point out that 99% of photographers don’t register their works. So, for them, the OWA is inconsequential.

Ok, so what about that 1% of photographers that do register their works? Do they have something to fear from infringers that could hide behind the OWA and escape statutory damages?

In this case, the OWA provisions are even better: the provision of ‘diligent search’. To many, that phrase is ambiguous: how does one do a diligent search? What you don't do is read that line by itself. Rather, it’s tied to other parts of the bill. So, let's first talk about those and then return to "diligent search."

The bill requires the copyright office to create a “certification process for the establishment of an electronic database to facilitate the search for pictorial … works that are subject to copyright protection under title 17, United States Code.”

Notice that I made the word “an” stand out visibly, by using three fancy font modifications: bold, italic, and red. I did so to illustrate a fact that just about everyone overlooks: there is only one such database!

Some say that there will be many registries and databases, each containing some subset of copyrighted works. The implication is that if there are multiple registries, would a potential infringer only need to query ’some’ of these registries? Which ones?

In reality, the internet is searchable--it doesn't matter how many there are, they have to be open to query (so that people can search it), therefore, all such databases would be searched by the others, resulting in all the databases being literal copies of the others. (And let's face it, the search engines would index these registries too.)

And besides all that, there’s another important fact: there is no way to register a work with the copyright office unless you do it through the copyright office. And if you do, it’ll propagate to all the registries. Remember, the "registries" are not places to register works--they're places to search for works that are already registered. Also remember, only registered works have any relevancy to the OWA.

Which brings us full circle to the center of all this controversy: what constitutes a "diligent search?" What we can say for sure is that it has nothing to do with "searching a database."

This is actually a legal term, much like "best efforts" or "reasonable efforts." It's not something that's defined by specific, enumerated actions. Rather, it's evaluated by a judge. In the case of a dispute, a copyright holder claims that the defendant infringed the copyright by using the image without permission. The defense has the onus of showing that it did a "diligent search." Here, the judge is going to listen to the explanation of whether the defendant's actions seemed "diligent." If they say, "well, we went into the database and found nothing," that may not necessarily be satisfactory. The image might have been taken 20 years ago, and would therefore not be expected to be in the registry -- because the registry only contains works since 2007, for example. If it's a photo from the 1980s, no judge is going to recognize this explanation as "diligent."

Yes, "diligence" is subjective, but that's how the law works. We live with that kind of subjectivity all the time in every matter of law and society.

Many photographers claim this is their liability--that it's too easy for an infringer to get away with stealing an image because of the unpredictability of the courts and their interpretation of "diligent search." Well, photographers have very little to lose by comparison to the infringers on the other side of the fence. While a photographer might lose his right to sue for statutory damages, the infringer risks far more. Namely, he has to pay legal fees whether he wins or loses. And if he loses, he also has to pay the statutory damages.

There are many reasons why infringers risk more than photographers from the OWA. Which is why the OWA is not only not a threat, but it's intentionally designed for specific and narrowly defined users and conditions: non-profit educational institutions that use works for the public good or to disseminate information.

So, let’s review:

If you never register your photos with the copyright office, then all this hoopla about the OWA is entirely irrelevant. You already have very little protection (or recourse) against infringers, and OWA doesn’t make it worse.

If you do register your works, there is no downside to the Orphan Works Act. In fact, you have gained a new sales opportunity, one that cannot be compared to any other: the searchable database might allow users to find your works.

Solving the Copyright Claim Clash

2009-03-31T21:18:00.000-07:00

The New York Times recently published an article titled, As Rights Clash on YouTube, Some Music Vanishes. It highlights Juliet Weybret, a 16-year old who recorded a video of herself playing the piano and singing Winter Wonderland, and then posted it on YouTube. Weeks later, the video was removed "as a result of a third-party notification by the Warner Music Group, which owns the copyright to the Christmas carol."

According to the Times article, this happens all the time, and thousands of videos disappear for the same reason. Even common family home videos that happen to include a portion of a song playing in the background are removed with prejudice, along with videos that use music in goofy ways, from montages to mash-ups.

What I find particularly interesting are these facts:

No human is involved in the infringement decision. It's an automated system that merely identifies songs; it does not distinguish whether the given use of the song actually constitutes an infringement.
No human is involved in policing or overseeing this process, questioning it, objecting to it, challenging it, or even calling anyone's attention to it. (Well, except for the New York Times.)
No entity at all—human or corporate—has any financial incentive to defend these claims: to intervene, question, object, or challenge.

It's certainly the case that Juliet's video is not an infringement (it's an unambiguous example of the Fair Use provisions of copyright law). But that doesn't imply that all cases are not infringements. Indeed, it certainly may be that some uses actually infringe. The important point is that no one is actually making that assessment and no one has a financial incentive to challenge them.

The consequences of all of the above have a cascading effect that, over time, has eroded the spirit and intent of copyright. One of the first things that happens is that the common perception of what constitutes a copyright infringement is being obfuscated. This is the exacerbated by additional factors. The complexity of copyright law is such that not a lot of people are aware of it or can interpret it easily without extensive experience. Even copyright lawyers often disagree over what kinds of uses are infringements and what are permitted under Fair Use. In fact, it is this very reason that "claims" of infringement need to be balanced by informed counter parties. The fact that there is an automated mechanism that forces content to be removed without "challenge" runs counter to the spirit of copyright.

Also, the reason why there is no challenge to these claims is that the size and financial wherewithal of the litigants have a disproportionate influence on their business partners. As the Times article sums it up, "Users have the right to dispute a take-down. But few have. People are somewhat intimidated by the possibility of being sued by one of the music companies, even if they have a free lawyer."

No matter how you look at it, it's pretty clear that the copyright system isn't working as it was intended for cases like this. But despite my characterization above, this isn't entirely due to large companies using their financial muscle to exploit the little guy, or the massive amount of copyright infringements that users do. The source is much more basic than that: the internet itself, where massive amounts of content is being created and used in quantities and ways that the original copyright infrastructure was never designed to handle.

Note: I said infrastructure; I did not say "laws." Copyright law is perfectly capable of addressing these cases, of discerning which of these uses actually are infringements, and which aren't, despite the hyperbolic claims of copyright holders. Hypothetically, if both sides of a dispute were properly represented by legal counsel, the court system would make use of existing law and find appropriate interpretations to maintain legal continuity. Granted, not every case is actually judged "fairly", as anyone who's ever lost a case knows. I'm not being naive. However, it's the aggregate net effect of rulings that has maintained consistency and stability in the general perception of the integrity of the courts.

But the reality is that both sides don't have balanced representation. Some have said that free market conditions will correct for such imbalances. The argument goes that the economic quandary for Google is that, on one hand, user-generated videos are important to YouTube's efforts to increase the flow of advertising dollars. On the other hand, their licensing deal with Warner (to display the professionally-made videos) generates significant traffic as well, which also contributes to advertising revenue. Is it the case that Google's competing objectives here would give them incentive to keep Warner Music from going too far? For Google to take a position on the matter would imply a delicate balance of economic interests. Is this a true balance of power?

The real answer is no, because unlike Warner Music, whose sole financial incentive is to represent their own interests, even (or especially) at the expense of Juliet's interests, Juliet has no one representing solely her interests. Google is not a fair arbiter here; it is only trying to determine what's in its own financial interests. Its decision is not based on what's "right", but who has the larger financial club.

It would seem like Google would realize that Warner Music isn't more valuable than the massive amount of user-generated videos like Juliet's. But the economic reality is that 1) end-users won't go away, 2) they won't stop producing and uploading content, and 3) they have no legal recourse. Hence, they have no economic influence, so Google and other social networks don't need to listen to them. By contrast, Warner Music is a single entity that represents a large volume of works, it does have legal recourse, and they could pull all their content. So Google listens to them.

And therein lies the real problem. That's why it's an infrastructure problem, and not about the law. What I mean by "infrastructure" is the set of tools and conditions set up by the government to provide means and mechanisms that give strong incentives for companies to be "good citizens" in the copyright realm. When there are no incentives for anyone to assume the counter-balancing position, the infrastructure is out of balance.

One could say that this provides a great business opportunity: to create a company like Warner Music, but who represents all the individuals who upload their content to social networks. Imagine a hypothetical site called "your-content.com" with a marketing statement that said, "if you upload your content in exchange for letting us represent you legally, we will pay you commissions on anything that is licensed from us, or any damages collected if someone steals your work. You can place your content on any site anywhere on the internet, and if someone licenses it, we'll pay you a commission." While that's well and good, the problem is that none of this is actually possible unless each work is actually registered with the copyright office. And therein lies another major problem with the copyright infrastructure.

Because of how copyright law is set up—and this is for very good reason beyond the scope of this article—only those works registered with the copyright office enjoy an extra level of legal protection, which itself leads to financial incentive for others to comply with their copyright. Warner Music has registered its massive media library with the copyright office, which is what gives them the legal and financial strength to assert their will upon Google or anyone else that wishes to distribute their works. Juliet can't assert her rights in any practical manner because she never registered her video with the copyright office.

The hypothetical your-content.com could never exist today because end-users like Juliet don't register their works. And, at a minimum registration fee of $35 per application, it isn't likely that your-content.com will pay to register all those works either. As a consequence, your-content.com would never able to practically enforce its legal protections, which would prevent them from deriving revenue from potential licensees. User-generated content isn't that valuable on a per-unit basis. It's only valuable in massive quantities, since only a small proportion of it actually sells, and it's impossible to predict which units will perform.

There's another hurdle to the problem: even if the registration fees were zero, the copyright office has no infrastructure at all to handle all those applications. Even today, with only tiny fraction of even professional artists registering their works, applications for copyright still takes 5-7 months to process.

Once again, this illustrates that the current copyright infrastructure did not anticipate the volume or business models that the internet has created. Price, processing capacity, and financial incentives built into the system to encourage the private sector to give representation to individuals. These are what's missing.

To address these failings, I submitted a plan (in 2007) to revise the copyright infrastructure. In my article, Proposal for Privatizing the Copyright Registration Process, I proposed that the copyright office offload only its simple administrative task of processing copyright registrations to the private sector. These new companies would be called "Copyright Registrars," of which there could be an infinite number. Their role is two-fold: First, to process copyright registration applications using a more effective and efficient automated system than what the copyright office does today. Second, they would "legally represent" works that were processed within a defined set of parameters (with oversight) to assure integrity. This is the financial incentive as I just described. By delegating the administrative tasks to a large number of private sector companies who can automate the process en masse, the cost of registration quickly approaches zero, and the capacity to process infinite number of works rises. These remove two major barriers that allow companies to build and justify business models that ultimately lead to equal representation of people's interests.

Note, the proposal is not a transfer of copyright ownership, nor is it consent or permission for the registrar to use the work. It is simply a transfer of administrative tasks. Once a work is registered, there are three events that would involve the Copyright Registrar:

If a third party wanted to license the work, the copyright registrar would then negotiate and collect the license fee. (This would largely be an automated process for most common uses.) Because the work could exist in any number of places around the internet, it doesn't matter where the work is found, it only matters that someone wants to use it in a manner that requires licensing. Here, the Copyright Registrar that processed that particular work would have the right to price it and collect fees. These fees would be shared with the copyright holder.
If someone has infringed upon the work, the Registrar would pursue those infringers, possibly collecting statutory damage awards or license fees, either of which would be shared with the copyright holder.
If a third party claimed the work infringed on another work, then the Registrar would assess the claim and either comply with the demand or challenge it.

This now lays the very incentive models for businesses like the hypothetical your-content.com to exist. So now let's consider a more realistic example: if Google were a Copyright Registrar. They would have YouTube be a site that automated the processing of the end-user's copyright registration application the moment the person uploaded one of their own videos of original content (assuming the work hasn't already been registered). Now, if Warner Music were to claim that Juliet Weybret infringed on its copyright, then Google would challenge it. Why? Because if they didn't, people would stop using YouTube, and move to another video site (that was also a Copyright Registrar) who did a better job of helping to monetize and protect users and their content.

And let's face it, if such conditions were to exist, then Warner Music wouldn't even bring the case in the first place, nor would Google permit the automated robot that sent out the take-down notice. So, already there would be a stabilizing effect by the very nature of there being a balanced weighting of legal representation. There would be less Copyright obfuscation, less exploitation, and a better, more efficient economic model for growth.

The other thing to consider is that Warner Music itself could also be a Copyright Registrar, and Juliet could very well have registered her little video with them, and still put it on YouTube. In this case, the music company would have more incentive to keep it there, since they would be receiving a portion of its ad revenue. With that kind of financial incentive spread across massive amounts of user-generated content, this translates to real money. Now there would be no incentive in falsely demanding that non-infringing works be removed from YouTube or anywhere else.

Predictably, everything stated above needs to stand to scrutiny. So, let's get into that.

Is there really economic value in Juliet Weybret's video? Perhaps not hers, but one needs to consider the aggregate value of massive amounts of user-generated content, especially when its collective weight adds up to substantial negotiating power. This is all part of the latest modern-day financial model called "long-tail economics." This is where money is made not by selling "the best" content available, but to amass as much of it as possible—irrespective of quality—and letting the natural sorting and searching mechanisms of the internet allow things to be "found" and subsequently sold. Given the massive amount of user-generated content on sites like YouTube, Flickr, MySpace, Facebook, and thousands of others, the aggregate value of licensible content is enormous.

This has been the focus of my research for close to ten years, which I have written about on my blog here. The most recent articles that pertains to this can be found here, and here.

Content is king, and everyone from social-networks to search engines knows it. The holy grail has been figuring out a business model that can capitalize on it. Facebook itself tried to change its end-user agreement that gives them rights to use content that people uploaded to their site, but they had to back-off because their "deal" wasn't fair—people weren't going to be compensated for their contributions.

The whole idea of the Copyright Registrar is for this very objective to be more open, transparent, and competitive. As more Copyright Registrars come online in their various forms, critical masses of people gravitate and congregate around those sites that are known to perform well in licensing and protection. There's no risk of monopolies or price/performance shenanigans because the competition would be diverse enough to keep anyone from cornering the market.

As higher quality content (along with higher quantities of it) add more and more to the global media library, all of which now have equal opportunities for licensing, it would be extremely rare for individuals to represent themselves anymore; almost all content online would be represented by someone with far more power and capability than individuals have on their own. Furthermore, licensing terms and disputes regarding infringement would be exchanged between more equally-sized parties, who have more balanced legal weight and economic power. Gone would be the days of individuals stressing over how much to price a photo that someone wanted to license, or how to deal with a company that stole their photo from Flickr for use in a brochure, or having to pout because Warner Music forced her song off of YouTube.

As for licensing fees, again automation comes into play. There's already models built in other industries for auction-based license-pricing systems, very similar to those used by Google to set advertising rates. Applying them to the lion's share of user-generated content would not only be simple, but lucrative. Distribution of commissions to the creators would be part of this business segment.

The last part, which is really where the potential cost and complexity comes into play, is the legal entanglements: assertion and protection of rights. Determining whether the use of a given work is an infringement is the elephant in the middle of the room. Copyright law and its various provisions for Fair Use and issues concerning the First Amendment make for a never-ending set of challenges. But I don't want to overstate the concern either—it's certainly manageable once you're dealing with informed parties of equal weight and economic interests. Deals are struck, middle ground is found, and balance is achieved.

This, combined with the more ubiquitous and nationwide use of the copyright infrastructure, would actually reduce the number of infringements, since it would be too easy to be caught, and you'd be caught by very large and powerful interests. This would increase the rate of legitimately licensed material, which has a multiplier effect on economic activity. Best of all, the people who create the content would be recipients in the system for a change. This itself has a stimulative effect on participation: people have more incentive to participate and to produce better, more competitive content when there is a merit-based compensation model.

The lesson that history teaches is that "economic incentives" is the great equalizer.

This article is by no means a detailed description of my copyright infrastructure proposal. For that see the link to the original proposal I cited above, which can be found here. In it, I also address questions and criticisms that have come up, as well as necessary and detailed policy issues that would have to be considered.