Sunday, November 22, 2009

Microstock Creates New Markets? - No, It Devastates Existing Ones

I hear all to often that "microstock creates new markets". Ok, so let's take that statement at face value, and agree with it, but break it down to see what monster has actually been "created." defines market in several ways, the most applicable to this statement is "a body of existing or potential buyers for specific goods or services."

To say "microstock creates new markets" makes it appear is if this is a good thing. However, not all markets are good, or even legal. "easy access to Pseudoephedrine creates new meth markets", or "the decline in police patrols created new open air drug markets." The cash-for-clunkers program grew the market for new cars. Yet, that program not only damaged the used car market for buyers who could never afford a new car and now have fewer used cars to choose from (thus raising the prices of those still available) but also spiked the new car market in the early part of the year at the expense of later-in-the-year sales, according to some reports.
(Continued after the Jump)

Microstock didn't come into the market to serve high school children who need school report images, or even the mom-and-pop corner store. They came in like a drunk bull in a china shop with careless regard for the devastation on the existing market. Jonathan Klein, co-founder of Getty Images, on justifying the acquisition of iStockphoto, suggested all the new markets they could go into. Yet, iStockphoto is going to kill off the golden egg goose that was Getty Images. Sources suggest iStockphoto will be spun off in 2010 and go public.

Microstock has taught image buyers that most photography is worth pennies on the dollar of what it used to be worth. Yet, time and time again, normally responsible buyers get burned by the use of microstock and create confusion when the same image they chose is one that the competition is using (or has already used.)

Every time an entrpreneur turns around with some hair-brained idea, they have usually surmised "there's a market for X", and then proceed to demonstrate how they can actually serve that market. Yet, the reality is that the market must be sustainable. The dot-com boom era is a wasteland of non-sustainable markets where billions were lost. The money in the gold rush was not in the actual gold, but the suppliers of the tools and equipment that the miners used. The money in microstock is not in the images, but in aggregating the content of people who don't care about getting paid, and then taking a fraction of a dollar for the image license. The profits in microstock are like end products where the pollution dumped into fragile eco-systems as a part of the process is simply disregarded. Today, countries like China who don't give a hoot about their environment or worker satisfaction are polluting the skies and streams with the post-manufacturing waste, and living wages are not paid to workers there either. As a result, US manufacturing can't compete, and irreversible damage has been done. In the same vein of thinking, microstock photographers have little to no regard for the damage they are doing to the photographic environment, causing immensely talented photographers to close up shop. A few pennies for a book cover or national magazine cover is just enough for a latte, and beyond that, the digital-camera-toting enthusiast couldn't care less.

Stop saying "microstock creates markets" and instead try "microstock markets are devastating existing profitble markets."

Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.

No comments:

Post a Comment