4.04.2010

Some thoughts about the future of photography as a business.

http://www.nytimes.com/2010/03/30/business/media/30photogs.html?adxnnl=1&emc=eta1&adxnnlx=1269907243-yZ/jjtLNoyncbflgnXJBKw

The above link is to an article that ran last week in the New York Times.  It paints a bleak picture for the future of commercial photography or indeed, the ability to make any money in photography other than by making equipment and peripherals.

The article's two pronged contention is that with "everyman" embracing stock photography and driving the cost down to zero, (or near zero) and with the rise of the amateur who is willing to work local markets at a loss, the previously lofty market for photography is heading for harder and harder times for those who've chosen to work in the industry as full time professionals.

I get it.  Moms who have the ability to stay home, out of the traditional 9 to 5 workforce are making a dramatic impact on traditional children's portrait and low end wedding markets.  Fields that once supported small studios across the country.  In many cases the amateur's work is as good as the professional work that had dominated the field.

And I get in on the commercial side as well.  Over the years commercial photographer's incomes came from a mix of tough, cerebral assignments interlaced with fairly straightforward documentation of products, properties and archetypes.  Now even my best friends who are art directors reach for stock and microstock for images that are generic.  Why wouldn't they?  It's a quick and efficient way to stock up their websites and brochures.  The price keeps clients from just saying, "Fuck it.  We'll save some money and do the whole project in-house."  The AD's fear that their turn is coming next as America (and perhaps the world) accepts that "good enough" is good enough for now.

But is it as bad as the article makes it out to be?  I would say, no.  Just because McDonald's has 60 or 80 franchises in our area and there are probably hundreds of other Taco Bells and Wendy's and Cheap Chicken places doesn't mean that stellar restaurants like Jeffreys or Treo at the Four Seasons or Sullivan's Steakhouse have been closed down and are relics of the past.  They thrive and they've thrived throughout the bust.  I was in Marathon, Texas recently and the Gage Hotel restaurant was doing great business, selling a $48 ribeye (a la carte).  Champagne seems to keep selling even though cheaper prosecos proliferate.

Millions of Honda Civics, Hyundai Rio's and Toyota Corollas get sold every year and yet they haven't been able to knock off the luxury brands like Mercedes and BMW or even make a dent in their own vertical offerings such as Camry's and Lexus or Crosstours and Accuras.

My experience tells me that all the stuff we used to do that was basic bread and butter is gone.  The cheese has been moved.  But top executives and their marketing staffs still call in the pros for high profile portraits.  My friend Paul got to shoot in Italy for a month in the midst of the worst year for the economy any of us has ever seen (2009)  and his business here, shooting high end commercial and residential architecture, has barely slowed down.

I still get calls to shoot higher end advertising where the products are unique or the ideas proprietary.  I also know that my friends at the high end of the wedding and portrait business are still booking the very top of the market.  Do we miss the bottom foundational layer? Yes, it was a nice source of income.  Do we miss the bread and butter?  Yes, because we could always try to up sell from there.

I'll be frank, 2009 was a financial disaster.  Not just for photographers but for just about anyone who was self employed at the time.  Or anyone who was trying to rent out commercial property.  My fee income from assignment photography dropped nearly 50%.  But we quickly moved to supplement the shortfall with more paid speaking and workshop engagements and more book assignments.  The royalty stream from earlier books kicked in.  I wrote stuff for advertising clients.  From time to time I leaned on the savings account.

But we can't judge our industry by 2009 and 2008.  That would be like judging all boat safety just from the example of the Titanic.  The whole economy got clobbered.  For the most part we are more of a discretionary market than a staple like diapers and milk.  But the flipside to that is that when time are good we are usually able to charge a premium.

If you were a professional who predicated you business success on the microstock industry you probably didn't do due diligence when you started out.  You would have seen the trajectory.  Everyone else did.  You can point to the handful of people who work 80 hours a week shooting thousands of photos they don't really care about who make a great living in the micro stock market but the reality for most people is that the only people getting rich from small sales of stock imagery are the owners of the stock agencies.

If you are competing with the moms with a camera who want the bottom end of the market you'll probably want to re-vamp that whole idea as well.

The trickier part of the market is the middle (yes, everyone will write that the middle sucks and you should only deal with the Buffetts and the Gates families but that's silly.  The middle is where all the volume is and a great chunk of the value).  This is where the people with full time jobs come poaching, looking to score ego points by getting published.  Think of the IT guy who offers to shoot corporate events or the electrical engineer who volunteers to do the company product shots with his new Nikon D3x.  The marketing team would be nuts to not take him up on the offer.  But he may not be a sustainable source.  The economy is recovering in many sectors and at some point the engineer will be too busy or his time will become to expensive.

We need to understand that our markets are changing.  I can't speak to your market but I know I've got to reposition myself to go after more and more high end portraiture.  So many of my competitors who did this kind of work in addition to weddings and babies have gone out of business and there is share there to be had.  I need to take the film making and video skills I learned years ago and repurpose the knowledge to corporate clients who want to move marketing into web based video.  And I need to better communicate my value proposition as a writer for the same industries.  I conjecture that the person who writes the script makes at least as much as the guy running the camera so why not have both fees?

Will we erode other people's market share?  It's inevitable.  They will erode ours as well.

But not to get lost in all this is the understanding that the big jobs will be back, in one guise of the other.  The budgets will come back because the upside for marketers is too big to not do great advertising.  The competition too fierce to stick with "good enough" as a long term strategy.  In the years going forward the rewards will go to two camps:  Those flexible enough to keep up with the fashion and the technical revolution our field enjoys and suffers from, and those whose vision has value and who have not devalued that vision by dropping their prices through the floor.

A final example that bears inspection is Apple.  They've not dropped the prices on their laptops or their high end computers like the rest of the industry which participated in a race to the bottom.  As a result their equity value increased by a factor of 400% in just the last year and a half.  By contrast the winner of the race to the bottom saw the value of their company drop precipitously.  Apple showed product and vision flexibility:  The supplemented the traditional business with other technologies like the iPods and the iPhones and now, the iPad.

We need to embrace this model.  Keep our value intact.  Keep our key product prices and fees high.  Find new ways to grow the business.  If you need to sell a cheaper product find a cheaper product to sell.  If your premium product is location lifestyle photography for ad agencies, don't erode your value/pricing model on that product.  Find a product like studio head shots that you can offer at a lower price point and maximize the potential of that market.  If you do head shots in the studio as your primary product then explore buying into the market for consumer experiences and create a product like location fashion shoots for everyday consumers that you can package as a step up or up sell.

Everyone always suggests that photographers write more or do video but I would also suggest that you understand leveraging content into visual metaphor and might want to explore ways to leverage those skills.

Bottom line:  The NYT article was a casual look at the most obvious trends.  Predicated to sell papers.  The reality is more complex.  After any cataclysmic event like the melt down of 2009 the ground is prepared for a new revolution and, even in existing businesses there is pent up demand for products and services.  Identify.  Price them.  Sell them.  Now is not the time to stay in the bunker.

It's funny to me.  I wrote a book about how to use battery powered flashes.  It's still a best seller in its category.  I wrote a book with lots of research about how to make photography profitable and that book languishes.  That's good for some of us because it shows me that people entering the field think technical knowledge is more important than marketing and business knowledge.  That's why I'm
optimistic........