Royalty Free no longer exists

I have always gotten a continuous stream of questions about Royalty Free vs. Rights-Managed images, and I usually just send people to numerous posts I've written in the past.

But a recent email to me concerning Photoshelter's use of the terminology compelled me to post a short blog entry on the subject to try to make it even simpler to understand.

Royalties are payments made to authors (photographers in this case) in exchange for the right to sell works (images). The moment any photographer is ever paid anything by an agency, s/he has received a royalty. Even if it's a one-time payment.

Rights Managed ("RM") means that someone has the right to say how a photo may be published. There's always someone that has the right to manage a work's usage terms. Yes, "unlimited, unrestricted use" is still "managed" if that's what the rights manager wants. Even public domain and creative commons are terms stipulated by someone -- usually the author.

By definition, ALL images are Rights Managed, even if the manager chooses not to assert those rights, or is very liberal about how others may use the photo.

Royalty Free ("RF") refers to a special kind of license agreement that can only take place between two stock photo agencies. Here, the primary stock agency grants another agency the right to resell images, and that second agency is under no obligation to pay royalties back to the photographer.

Why would such a thing happen?

Before the internet (and up till mid-1990s), distribution of images to buyers was difficult. Smaller stock agencies that couldn't sell some supply of images started selling them to OTHER stock agencies with better distribution channels (usually, the early internet adopters). Because these images were usually lower quality, the concern was that these images might not sell. In order for the deal to make financial sense for all parties, the photographer was paid a one-time royalty for the transaction, the primary agency got a single, lump-sum payment from the secondary agency, and that second agency was now on the hook to make some money. Sometimes they did, but often they didn't. But they could only agree to take this risk so long as they were not obligated to pay royalties back to the photographer. These were royalty-free images. 

At the time, photographers were finally making money from images that would have otherwise sat unsold, and the smaller agencies were often seen as tributaries to the main stock agencies, who themselves were taking advantage of a very quickly expanding base of buyers because of the growth of the internet.

As the idea showed profitability, more agencies started selling and reselling the same images in the same way to many stock agencies, creating a huge market for RF images. Each time, the photographers would get royalties from each such sale. And, in each case, the "royalty free license" meant that each (secondary) agency down the distribution channel was not obligated to report sales or pay royalties to the photographer.

The tipping point came when the ease and cost of access to the internet allowed those smaller agencies to sell directly to the buyer. And, for the buyer to find those images through better search engines. The need to feed the primary agency networked collapsed, which coincided with the time when Getty's stock price was plummeting from the mid-$80s to the low $30's, when they were finally taken private. Note: Getty's price didn't plummet because of the rise of RF images. The entire economy of images was falling precipitously because no agency could control (choke) the supply channel any longer. All agencies were hurting and RF was no safer than traditionally-licensed images.

I am currently unaware of any actual Royalty Free Licenses being used in photography. I believe it no longer exists. (The practice is still used for clip art, icons and some other kinds of media (smaller music labels) where channel distribution is still difficult.)

So, why are the terms, "RF" and "RM" still used? 

Remember how those secondary agencies were on the hook to monetize these images or lose money? They did so by enticing buyers with very liberal license terms, such as "unrestricted (use), unlimited (time)."  Thus, photographers (and later, newbie agencies that didn't understand history) misunderstood RF as implying these unrestricted usage terms. For a long time, RF really did mean "unrestricted."

But I rarely see such license terms anymore. Even the license terms used by today's agencies for their so-called RF images are often not as liberal as the original RF terms once were.

Today, the terms "RF" and "RM" are interpreted mostly by PHOTOGRAPHERS to mean that they will make more money with RM images than RF, even though those economics are not as predictable. My personal opinion is that the terms remain simply to attract (and direct) photographers towards certain business terms with the agency. Most buyers have no idea what they mean... nor do they care. They only care about the terms of use, which has nothing to do with RF or RM.

Market Efficiencies and Stock Photo Pricing

In my last blog post, Selling Stock: It's About Search Rank, Not Price, I argued that the price variability in the stock photo industry can be exploited by those who garner high search rankings. The rationale is that the direct and indirect cost (overhead) of finding an image so far exceeds typical license fees, that photo buyers are more indifferent to those license fees than sellers believe. Thus well-ranked photo sites would be able to command higher license fees, simply because they have first access to the buyer.

In fact, well-ranked photo websites are undermining their own profitability by lowering prices unnecessarily, mostly because they are following their perceived competitors, not because the customer is demanding lower prices. Their rationale would follow traditional economic theory under most market conditions, but therein lies the exception. The photo industry does not represent "normal economic conditions." Indeed, the photo industry represents a classic case of an "inefficient market."

Let me explain by starting with the definition of an "efficient market." It can be summarized as a market of buyers and sellers engaging under conditions where all information is available to parties on both sides of a transaction. (See this wikipedia link for extended definitions, examples, and citations.)

Examples of efficient markets are exchange-traded commodities like oil, orange juice and automobiles, among others. Here, producers of commodities make their wares generally available, and market-makers trade on this information. It is exceedingly difficult (if not impossible) to have inventory that the market is unaware of, or to purchase commodities without the broader market's awareness. These are the conditions that lead to the definition of an "efficient market."

While there will always be price volatility, it is almost entirely governed by predictions of how supply and demand might be affected by external events. The weather affects the price of Orange Juice; war and instability affects the price of oil; and a litany of factors affect the auto industry.

When it comes to image-licensing, most buyers and sellers do not have that much information about the "global" market of buyers or sellers, let alone access to conditions that can affect future supply and demand. This results in "market inefficiency," which results in price inconsistencies, precisely as predicted by economists. Therefore, prices vary from high to low across the spectrum, depending on the perception of the buyers in any given time/place. This is because they have limited and incomplete information about the global supply chain.

This also explains why people objected to my proposition from my prior article. They do not have access to "all information," and worse, they are unaware that their worldview is limited. That is, most pro photographers are under the illusion that the entire market of stock photos is monopolized by a small number of stock agencies.

Ironically, the other markets (non-agency buyers/sellers) don't see the other side either. These discrete and separate markets will, by definition, find different prices than buyers in other markets. Stock agencies will view one another as competitors and lower their prices, whereas websites that are unaware of stock agencies (or don't attempt to compete with them) will command higher prices.

To optimize prices and create an efficient market, the following would have to take place:

• Stock agencies would have to expand to cover a larger proportion of the image-buying market. As my prior article advised, the way to do this is to partner (or merge) with photo-centric websites, whose proportion of global internet traffic is very high. This will allow "more information to be more universally available to a greater proportion of the buyers and sellers." This now leads to market efficiency.
  
• Once the market became efficient, it could then be automated through predictive pricing algorithms, precisely the way Google automated online ad prices using an auction-based mechanism. No doubt this is not a simple algorithm, and it took years to evolve, requiring considerable data mining to determine optimal market pricing. But it was achieved to a point where it is now a highly viable (and mutually beneficial) economic model for buyers and sellers. The market of photo buying is similarly large, and there's enough economic activity that appropriate data-mining efforts could lead to similar algorithms for auction-based image license pricing.

The question is whether anyone is willing to invest enough into this untapped market.

Selling Stock: it's about search rank, not price

Yesterday, I reposted an article I originally wrote in 2007, discussing the misconception that microstock pricing is what's driving down overall license fees.

I got a few emails that still challenged my assertion, and it appears I haven't emphasized strongly enough the most compelling arguments supporting this thesis.

All of my research supports the premise that the primary cost of licensing images is not the license fee, but the overhead associated with finding and acquiring the right image. The overhead and administration of a project that would involve photo licensing shows that the actual license fee ranks very low on the budget -- hence, low on the buyer's priority list. My 2007 surveys of buyers showed that.

If the person responsible for finding images for a project is paid $60/hr, and this person spends 2-3 more hours looking for a photo just to pay $1 vs. $50, this translates to paying someone $120-180, just to save $50. People who control budgets know that the license fee for photos is negligible to the total cost of production, even at the traditional stock photo rates. The bigger the project, and lower the proportion of the license fee for the image(s).

Those who sell images are dropping their prices because they're looking at their competition, not the buyer. Further, there is absolutely no evidence to show that sites that have lower prices sell more images. There is definitely a perception that there's a correlation, but that's because people are comparing apples to oranges. Getty sales vs iStock sales are not apples-to-apples because the two entities vary dramatically in search engine results (and other important factors). People talk about microstock sites more, and they link to them (in blogs, discussion forums) and the quantity of images on microstock sites is rapidly growing. So naturally, these sites get higher rankings in search results. Search engines don't rank sites because they have lower prices. They rank sites by size (content), links, and a black magic formula that is best described as "dispersion of discussion in and around the net." In short, microstock sites have more content and get more attention. Hence, better rankings, which translates to more traffic, which attracts more photographers to submit images to them, perpetuating the feedback loop.

In my 2007 survey, those who indicated they were aware of--and use microstock sites-- most don't go to them because the prices are lower; it's mostly because those sites ranked higher in search engine results, where the buyer starts.

Because search engine ranking drives traffic -- especially the untapped (and unaware) segment of the global economy that doesn't use stock agencies -- and because the greatest cost in photo acquisition is time, not the license fee, 90% of the time-savings is the image results the user gets on that initial search. If it takes the buyer to a stock agency site -- microstock or otherwise -- then the deal is nearly done. Price notwithstanding.

This is primarily why I have advocated for years that stock sites should focus their entire effort towards optimizing search engine rankings. While they could have done something about it in the past, the rise of social networks and the plethora of image-related websites and apps has made it impossible for agencies to rank highly on image-search rankings on their own. In today's market, they have no choice but to either partner with, or acquire/be-acquired-by a social-networking site.

The Getty<->Flickr combination is a very pragmatic example. Yahoo is circling the drain, and it needs to shed its non-performing assets and focus its attention on ... something. Whatever that is, it isn't Flickr, and there aren't a lot of buyers that would be interested in that asset, except for Getty or Corbis. The combined product would involve retooling Flickr to be far more socially active (to keep up with modern social networking trends), and to integrate licensing/acquisition into the user/social experience. Most importantly, to provide incentive programs for photo submitters to participate economically. (I've written a great deal about this in the past.)

Of course, perhaps Yahoo should just buy Getty. Facebook is getting into the game, which tends to lead one's eyes towards Google, but they are still struggling to play catch up in the social-networking arena, and their photo division is not run by someone with a disposition towards stock or an awareness of the economics of the photo industry. The company is more interested in building assets that support their advertising model. There's no evidence that "licensing" is on their radar--a pity because they would be on the forefront of the Web 3.0 economic model, where images would play a huge role. (See here.)

In the meantime, there's a $25B shadow economy in peer-to-peer photo licensing that's up for grabs. (See here.)

So, you ask, "how do you convince agencies of this?"
I've been trying since 1998.

(For fun, see this web archive of my site from 1999 discussing this topic.)

Search Engine Optimization and The Long Tail

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?

Getty and Flickr: Prophesies Coming True?

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."

2009 Year in Review: Web Optimization

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:

1. "black and white pictures" (Google Rank: #4)
2. "what kind of camera should I buy" (#6),
3. "learning photography" (#2)
4. "photography business" (#1)
5. "model release" (#1)
6. "star trails" (#1)
7. "fill flash" (#1)
8. "photographing people" (#1)
9. "selling prints" (#1)
10. "photography marketing" (#3)
11. "sahara desert" (#5)
12. "stairs" (#6)
13. "photos of doors" (#1)
14. "photos of new york city" (#3)
15. "photos of san francisco" (#1)
16. "photos of kids" (#1)
17. "photos of united states" (#1)
18. "photos of patagonia" (#3)
19. "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:

1. 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.
2. 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.)
3. 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.
4. 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:

1. 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.
2. 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.)
3. 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.

Lying about Photo Licensing

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

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:

1. 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.
   
   
2. 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:

1. 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.)
   
   
2. 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

[ 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.