On Fri, August 7, 2009 16:46, mark@xxxxxxxxxxxxxxxxxxxx wrote: > Simple David Of course your web clients would laugh at it because they > want it free. It won't be that long before they want his for free as > well. Free doesn't seem to be what they want; they just find several hundred dollars absurd. I've never had anybody object to $18, say (istockPhoto). > With the orphan works bills out there with the lowering of the > value of creation an copyright, they will be able to get them free as > well. He has just lead the race to the bottom. He doesn't really even > have a reasonable return on his investment now. He has no connection to the orphan works bill (which, while it's flawed, addresses very serious problems that cost creators lots of money). Possibly the flaws in the orphan works bill will let people steal photos effectively, but that's nothing the Danish photographer has done. > You can't spend your gross income. Employees must be paid. I don't > remember the exact number but it was about 10 or so. Taxes are going to > get at least 50 percent of that. Even with licensing a million images a > year, take half that for taxes and he is down to $500,000. Making payroll > is next. Even if he is paying them just $15,000 a year that's another > $150 grand. Now the building rent or mortage payment has to be > significant. Hard to put even a guess at that. You can make that guess > as good as I can, but it was a HUGE building with anything you could ever > want in it. "Microstock" can mean anything from a few pennies to a few dollars. The article mentioned licensing 2000 photos a DAY; if that's just business days that's still about 440,000 photos licensed a year, but it could be 730,000 (more in a leap year :-)). I agree that he can't run that on $500,000/year, for about the same reasons you give. (Though the building might have been very cheap, if the original users were gone. It's specialized, and no use to most people.) However, the fact is that he's currently running it. I suppose it's *possible* that he's figured out how to make a small fortune in stock photography (start with a large fortune); but it's equally possible that he's built that up with current micro-stock sales. > Next is fees for models and operating expenses. Things like utilities, > transportation costs, air fare ect that are all necessary to create the > images. All that together is easily another $100 grand in my estimation. > Feel free to disagree. I haven't studied what he's doing enough. Is he shooting elsewhere? I'm not sure there's any travel involved. > You now have about $750,000 gone out of the million income and you haven't > even hit equipment. Somewhere on the You Tube clip I think he had 25 or > so of the top of the line lenses, multiple top of the line digital bodies, > huge investments in lighting, light modifiers, strobes, soft boxes, and > all sorts of tools at their beckon call. Much of the digital stuff would > have a very short life span but the glass and lighting could be considered > a longer term investment. With the quality of stuff he had it was easily > $100 to $150 thousand in just camera stuff, with maybe $70,000 or so > needing very regular updates, especially digital bodies and computers. Remember that the cameras, lighting, computes, and so forth don't have to have been purchased out of one year. The lenses will have long lives, even the bodies will be good for two or three. Lighting probably for nearly as long as lenses. > As you said the types of images he is likely to be marketing will date > quickly so it isn't like you can create a database and live off the image > file in retirement. It has to be continued. That'll vary some, but sure. > At the very least he has $250,000 in cash out of pocket leaving. What > people often forget to factor in is loss of return. If he put that > $250,000 in an account an invested it, that cash alone could easily and > safely bring in maybe 5 percent or about $15,000 he won't get. I sometimes think that's the characteristic mistake of small business, not to consider their capital tied up in the business a cost. > That brings the total down to about $85,000 left. Not including things > like insurance an load of other things that a business of that size would > bring. Worse than that places like I Stockphoto.com are going to make 8 > times what he makes for little if any of the actual risks. Why would any > want to pad Istockphoto.coms pockets instead of their own? Because that's where the customers are? > Now after all this he has created the impression among his customers that > images are supposed to be cheap. The skill knowledge and talent necessary > isn't of value if you sell the final product to the customer at $20.00 or > less. If its of no value, at some point they want it at no value. He is > for all practical purposes obliging them. Before long a file with missing > metadata will be free for all and even that $ will go away. He has put > the Neiman Markus product in the 99 cent store. People buying music pay $20 or less, and many of the them still think very highly of the talent of the creators. Same for books, and movies. > When royality free came out many of these arguments were made, but at > least it was a bit different. There was some value to not having to keep > records and not having to make the contacts necessary made RF a choice > many made. Yet it was perfectly plausable to make a living selling images > at $300 or so, but not $30. What has happened with the micropayment was > just the next step in the progression that many of the Rights Managed > people pointed out years ago. Sadly now the photographer gives up 80 > percent of the $30. Nobody has a right to make a living; at least not in any specific way. Just because it worked 10 years ago is no reason to think it has to work now. A huge percentage of the people getting pictures off the web don't have $300 in their budget. I don't mean they don't have $300 for the picture in their budget; I mean their whole budget for the thing they're doing (maybe a flyer or something) is under $300, including printing. Those people were never potential customers for $300 photos. There appear to be photographers interested in serving that market. Many of the $300 clients don't find that photo $270 better than the $30 photo. I think they're right, in a business sense (and business is the only way to put a value on art). So the people selling $300 stock photos are losing their market. That's the breaks; technology has made it possible for people to compete with the big traditional stock agencies, and they've vastly expanded the market while vastly reducing prices. > Now web clients are different, but its because many never really dealt > with buying images before. The web mentality of if its on the net it must > be free is so rampant that I don't really consider buyers that are buying > JUST for the web to be that viable of a market in the first place. Those > that buy for a company report or sales brochure AND the web are a > different story. I've never met these people who think things are free just because it's on the web. I'm sure they're out there, but I've never been able to corner one and ask them what they're thinking. But then my social group is very heavily weighted towards creative people. > With so many more images out there and so many companies trying to get > them for free (just look at how many news channels and agencies are asking > for your pics rather than taking their own) it is natural the price would > come down. But at some point a profit must be made by the creator and at > a $ an image that is impossible. He might not realize it yet, but he is > on that threshold right now. Or else he's a first-class business man and knows *exactly* where he stands and what he's doing. I'm inclined towards the second theory myself. -- David Dyer-Bennet, dd-b@xxxxxxxx; http://dd-b.net/ Snapshots: http://dd-b.net/dd-b/SnapshotAlbum/data/ Photos: http://dd-b.net/photography/gallery/ Dragaera: http://dragaera.info
