IStock Photo
Description
From Jeff Howe, from chapter 8 of his upcoming book on Crowdsourcing:
"There's a story people like to tell about Bruce Livingstone. In late 2005 Getty Images, the world’s largest photo agency was looking to acquire Livingstone’s company, iStockphoto, the world’s most successful crowdsourcing company. Long before the contracts were drawn up Livingstone, to show his commitment to the deal, tattooed the word “Getty” in cursive across the tender flesh on his inner wrist. Then he emailed Getty CEO Jonathan Klein photos of the tattoo under the message: “Don’t make me write another word after this!” It's just the kind of tale—emblematic of determination and fortitude and just the right amount of quirky eccentricity—that tend to burnish the reputation of its subject. In Livingstone's case, it has the added benefit of being demonstrably true.
With his penchant for muscle cars, rockabilly haircuts and, yes, tattoos, it’s tempting to call Livingstone an unlikely CEO. But I prefer to think of Livingstone as a perfectly reasonable chief for some corporation from, say, the year 2020. A company not unlike iStockphoto. Located in a single, cavernous room inside a former factory in downtown Calgary, Canda, iStockphoto houses a tiny fraction of its actual workforce. And Livingstone, dressed in T-Shirt and jeans, occupies a desk—chosen, it would seem, at random—in the middle of the floor. The corner office, it seems, loses significance in a company that thrives on decentralization.
Westeel Rosco built the factory in 1925 to manufacture nails, screws and other bits of hardware. Unlike Westeel Rosco, iStock’s products—stock photos, illustrations and videos—aren’t manufactured on site. They’re created by a global, fluid workforce of 38,000 part-time photographers and artists, less than 10 percent of whom make enough from the work they sell on iStock, to live on. Yet they have a devotion to the company matched by few traditional firms. The full-time staffers who spend their days in the old Westeel Rosco plant play a support role for the community—and community is the only applicable word—that is making the product iStock brings to market every day. And that community—its members call themselves iStockers—have been very, very good to Livingstone and his investors. The company has experienced double-digit growth nearly every month of its existence, and when Getty purchased iStock in early 2006 Livingstone took home more than half of the $50 million Getty paid for the company.
The first stock photo agency was founded in 1920, and for most of the 20th century the industry was an afterthought, trafficking in the outtakes from commercial magazine assignments. Very few photographers tried to make a living off the market in pre-existing images alone. This changed after the desktop publishing revolution of the mid-‘80s led to a rapid growth in the publishing industry, and a commensurate demand for images. Suddenly photographers were making six figures a year selling photos they’d already been paid to shoot. It was like minting money. Yet even now stock photography remains, in comparative terms, a tiny industry. The annual global gross for the entire business is estimated to be around $2 billion, which makes it a bit bigger than the market for gift baskets, but a little smaller than the annual sales of orchids.
In just the last few years the influx of talented amateurs armed with cheap, high-resolution digital cameras has upended the economics of the industry. Five years ago a professional-quality image was still a scarce resource. No more. This isn’t to say the market for high-end photographs has disappeared. A gifted photographer will always find work. But the professional no longer has a lock on the middle and lower ends of the stock photo business. With a modicum of training, just about anyone can take a decent shot. Sophisticated cameras and photo-editing software do the rest. iStock exploits this fact. Design firms and other small companies working on a budget quickly embraced what became known as the “microstock” model. One graphic designer told me he went from paying hundreds of dollars an image to less than $10. “I pass on some of the savings to my clients and keep the rest. We’re both delighted.”
iStock might be great for buyers, but it’s caused all sorts of headaches for professional stock photographers. Mark Harmel, a Los Angeles-based photographer specializing in healthcare imagery, has had to radically adapt to the new reality. In 2005, Harmel made roughly $60,000 from his stock image portfolio, most of it through Getty. By 2007 that income had fallen to $35,000. “If I look at the trend line, it just keeps going down. I’m really concentrating on getting assignments now,” says Harmel. “I recently came back from London with 70 really wonderful shots. I’ll probably use them on my Website, but it’s not worth my time to bother submitting them to a stock agency. They won’t sell.” Getty’s stock price reveals that Harmel’s hardly the only traditional photographer suffering. On the week in late July 2007 when I was visiting iStock in Calgary, its parent company Getty announced it would miss its quarterly earnings estimates. By the time I arrived home a few weeks later the stock had slid 32 percent. In January of 2008 the stock had bottomed out at $21.80, a 60 percent drop from the previous February." (http://crowdsourcing.typepad.com/cs/2008/05/chapter-8-what.html)
More Information
- Further commentary at http://crowdsourcing.typepad.com/cs/2008/05/chapter-8-what.html
- Case study on the nature of the participant community, at http://www.uic.edu/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/2159/1969
- Crowdsourcing