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.)

"Commercial Uses" and Model Releases

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.

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?

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.

Might Picscout Ultimately Cause Yahoo to Acquire Getty?

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

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.

Photo Agencies and The Stock Industry: a Matter of Proportion

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.