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Year 2009 in Review: Content Remains King
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In this first segment of my series, "2009: Year in Review," I discuss
the role content has played on my business.
Overview: Content is King
As I've preached since the dawn of my writings on the business of
photography, the best way to make money on the web is to create as much
content as possible. Having more inventory to sell is only a part of
the benefit—indeed, a much smaller role than people may think in some
cases, as I'll articulate shortly. The main reason content is so important
is because it's the nucleus of all other revenue sources and business
activity. Content plays an important role for search engines, which not
only allow people to find you, but provides other sites with links. As
links build, your search rankings increase, which increases traffic,
which feed these various revenue streams. I discuss this principle in
general in my chapter, Web-based Photography Business, which is part of my series of
photo business books. (I discuss 2009's numbers more
specifically in the next article in this series.)
As a general business model, I follow my own advice to others: Almost
everything you do should ultimately result in new, monetizable content.
Once you have it, you can make money with it in perpetuity, with very
little (if any) additional overhead or resources. Outside of some initial
short-term costs and overhead, your business can scale up to virtually
any size by merely adding new content. Whatever short-term income or
expense that may be involved in acquiring new content, it should be
regarded as part of your investment in the future. (That is, the short
term pay or income is less important as the long-term potential.) I'll
get back to this subject shortly.
Though people monetize their content in different ways, I happen to choose
to be the exclusive licensor of my own content. That is, I do not use stock
agencies or other distribution models. I usually recommend this approach
to people as a default assumption when considering entering into the photo
industry, but one can certainly leverage the sales resources of agencies,
if done properly from the outset.
Given that I have over 60,000 images in my online archives now, and the
manner in which content can be leveraged so easily, it may come as a big
surprise to learn that licensing of still photography only represented
5.8% of my total revenue for 2009, compared to 16.9% in 2008. But don't
take this bad news.
First, still photography (the majority of the content on my website)
is what I call the "gateway drug" for my clients. People discover my site
primarily because of my still images, and end up making more lucrative
transactions later. The fact that still imagery licensing has dropped
as a percentage of total revenue is more due to the much larger
increases in other, more lucrative revenue streams (discussed later).
This further underscores the importance of having a robust and diverse
business model that can survive (and even benefit from) shifts in the
economy. In this context, the recession may have caused some people to
spend less, but it also caused others to shift their spending towards me.
Those "others" is a much larger population, even though each spends less
on a per-transaction basis.
For example, my fine-art sales represented 19.5% of my revenue, up
from 12.7% in 2008. This can be entirely explained by the economy
and shifting demographics. Buyers on my site in 2008 and prior had been
low-end art collectors and enthusiasts (see Selling Photography Prints), whose average
purchase was $232 per order. By contrast, 2009 saw the average drop to
$188 per order, but I got a lot more orders. Though I may have lost
art collectors, they were replaced by high-end consumers were who
shifted their spending from more expensive gifts (such as jewelry,
etc.) to photography.
Assignments
In light of my prior blog articles on the
principles of economics for photographers,
assignments are also extremely critical to the acquisition of content.
Many photographers scoff at the notion of accepting "low pay"
for assignments, or even doing them for free, but this is extremely
short-sighted and self-defeating. Acquisition of extremely valuable
imagery is key to long-term revenue generation, and assignments are
pivotal to that objective. If you choose your assignments well, then
the "fee" you charged—be it a lot or a little—is, and should
represent a very small proportion of the revenue you yield from the photos
you just took. In other words, if you're only revenue form an assignment
is the assignment fee, you have an outdated business model; you simply
cannot compete in today's modern internet-based economy, especially when
millions of people are taking pictures themselves. That assignment rates
go down may be an unfortunate side-effect of this growth, but it is merely
a blip on the screen when it comes to a mature photo business model.
I'm not dismissing the potential income from an assignment; I never
leave money on the table. If the client is well-endowed and I can
negotiate higher fees, I do so. Mind you, negotiation is an entirely
different subject, which I discuss in greater length
here
and
here.
But negotiation is only about optimizing what you can get, and should
not be confused with whether you should take an assignment (regardless
of price). In short, in mature business and career planning, assignments
should be regarded as one-off payments for opportunities to acquire useful
images that last into the future. When you amortize your assignment fees
over the course of time, it should be negligible. (There are assignments
I shot in 1996 that still generate revenue.)
Assignments represented 12.1% of my 2009 revenue, up from 4% in
2008. This substantial increase is due to both an increase in the number
of assignments I took, and the amount I charge per assignment. As I
said, I don't leave money on the table, despite the fact that I face the
same market conditions as everyone else—namely, attempts by other
photographers to under-bid me, even offering to shoot for free.
So, why would my clients pay me a higher rate than they used to, despite
the increased competition? Because I provide something that cannot be
supplanted by the lowest bidder: a track record. My experience, quality,
reliability, and maturity in the industry is important to clients that
cannot afford to risk getting a photographer to shoot something for free,
yet end up with images they can't use, or other bad side effects of working
with an inexperienced photographer.
I also choose clients wisely. I don't seek or need clients who can
and should be serviced by emerging photographers. My motto is, "real
clients don't need newbies." (Any photographer that complains about
being harmed by newbies should have moved up and out long ago into the
next tier of their profession.)
People often ask how I come up with my assignment fees. It's actually
a very simple calculus of two factors: the client's financial condition,
and the "value" of the images I can get. Remember, this doesn't govern
whether I take an assignment, just what I charge for it once I deem
it worthwhile. I emphatically dismiss all of the fee calculators that
you see in books and on blogs. For example, most pros will say you should
factor in your "costs" for any given assignment into your fee, whereas I
feel costs are entirely irrelevant. I am never concerned with whether
I'm making a profit for any given assignment because—remember—the
true value of any given job is the longer-term potential with the images.
Thinking about purely the fees for an assignment prevents you from
focusing on career growth.
While I do generate good revenue from assignments, I will still shoot
some for free. Last year I'd done two very important assignments, one
was for free, and for another, I spent $3200 of my own money to fulfill
the job. In this case, I knew that the imagery itself was invaluable. (And
indeed it has already paid for itself in the aftermarket.) Better still,
once my clients saw the results of the work, I not only sold them
additional content that they didn't anticipate, but I got follow-on work
to do exactly the same thing at twice my normal billing rate.
Still Photos
Over the past year, I've added about 30,000-40,000 new images, all
entirely from assignments. These include:
As noted above, and in keeping with
Truism #4 of my treatise,
the Photography Business (1998), my latest expansion into new revenue resources
includes video. As you know, video online has been increasing, and the
technology required to produce quality video has come down. This has
given many people an opportunity to expand their licensing potential in
ways they never could before. I'm encroaching into the video turf much
the same way consumers have encroached on the pro photography turf when
digital cameras and the internet became inexpensive and accessible back
in the 1990s.
Prior to 2009, I licensed no video footage. Yet it instantly grew to
represent 12.2% of my 2009 revenue. Most of it is time-lapse photography,
which I'd produced mostly as a curiosity that I stumbled into when I
discovered my camera's cable release
had an interval timer setting.
Most surprising about my video revenue is the fact that I have
never promoted or solicited my videos. In fact, aside from my blog
comments, I never even made it known that I had video content.
I hadn't upgraded or enhanced my site in any way to host or license
video content, and the only access to it is this page,
which is merely a collection of links directly to my
YouTube channel.
Needless to say, the natural viral marketing effect of YouTube is
self-evident.
One then asks: if my site doesn't support it, and I can't license it
through YouTube, how am I conducting transactions? Email! This is
exactly how my stock photo business started. From 1996 to 2003, I had
never had a shopping cart—buyers simply emailed me and asked to license
images, and they'd send me a check.
Of course, that wasn't that unusual back then—few stock photo sites
existed, let alone had automated shopping/purchasing systems, so buyers
accepted it more readily back then. Times are different now, and so are
expectations. All the more reason why I'm as surprised by the degree of
video licensing I've done using this archaic model.
That said, I expect to integrate video licensing on my site soon enough.
It should be noted that one reason why my time-lapse footage commands
such a high price is because of the way I shoot it. Rather than use
a video camera, I use my conventional still cameras
and capture each frame in full resolution: 5600 pixels wide. I then
string them together into video sequences using either iMovie (for
presentation onto YouTube) or Final Cut Express to retain the full
ultra-high-resolution. In fact, these clips are so high-res, buyers
can pan and zoom within the sequences down to ¼ of the original
footage, and still retain enough resolution to achieve 1920 HD.
(And even then, most video buyers don't really need 1920 anyway.)
None of this is possible using conventional video cameras, nor is it
offered by other video-production service providers. And of course,
the quality is much higher than video footage because night-time image
detail in a pro-level dSLR far exceeds anything in the video camera
category, even the amazing Red One. This strategy anticipates not just
every possible buyer, but prepares for the future as well.
One might think that this is a huge shift in my day-to-day shooting.
That's where the best news is: shooting time-lapse footage is as
easy as setting up a camera for a conventional landscape shot, but
instead of pressing the shutter button once, I press the interval timer,
and then go away. For all-night images, I just go to bed; for daytime
footage, I use my other camera body and shoot stills while the time-lapse
body snaps away every 3-5 seconds. This is not to suggest that all
time-lapse is easy (or yields successful sequences), it's only to say
that it doesn't interfere with my existing shooting patterns.
Note that the videos on my YouTube site do not represent all the
footage I've done, either in time-lapse or conventional capture. I've
done a number of productions for clients as an addendum to my standard
still-photography services. So, I haven't really grown a new business
model as much as enhanced my existing assignment services. Also note
that my Canon EOS 5D Mark II, the body that I use in standard still
photography, also captures HD video, where I do get short segments
of conventional video clips. (Always adding to my "content.")
Lastly, don't assume by any of this that I'm moving towards video and
abandoning still photography. The kind of video I'm doing is just the
low-hanging fruit that happens to be available given my set of conditions
(equipment, talent and clients). I am by no means a true videographer
that could be hired by a television network to produce content for
broadcast. That said, the future of video licensing looks very,
very bright, and it would be something I would strongly encourage
other photographers to do if they had a propensity for the technology
and the clients that would use it.
Consulting and Business Development
2009 saw a big decrease in my consulting revenue largely because I'm
shifting away from that business model. I've always used it as a vehicle
for conducting research into new and interesting areas of the photo
industry. However, my interests are shifting into new directions, and
I'm finding that the information many people seek is becoming repetitive,
and ultimately fruitless. I'll be posting future articles on some of
those initiatives.
Nevertheless, one of the side benefits of all this research is that I
produce a lot more content that's not only indexed well by search engines
(which brings me traffic, which helps my content sales), but it also
leads to publishing revenue. As most of my readers know, I have written
a few books on the photo business, which continue to sell quite
well on my website. Even though they are "old" by publishing standards,
I wrote them with longevity in mind, as they address timeless business
principles. In 2009, my book sales and other publishing revenue (see
below) represented 12.8% of my income, compared to 14.9% of 2008
revenue. (This aspect of my revenue is and always has been rather
constant.)
Another noteworthy fact is that my site outsells ever other book retailer
on the net by many orders of magnitude. And I negotiated the contracts with
my publishers with this in mind—I don't mind taking less royalty
advances on my books in exchange for very advantageous discounts for
direct purchasing from them. Though my contemporaries in the photo
business publishing world may sell more books on amazon than I do,
I sell far more total books because of the volume on my site. There's
also the fact that I get $10-15/book, whereas my counterparts get maybe
10-15% royalties on those amazon sales. (I'm guessing these royalties
translate to about $1.50 to $2 per book.)
Then there's the revenue I get from publishers who reprint some of
these blog entries (condensed down to 1500 words—yuck!) in their
columns and newsletters. Interestingly, most are from non-US publishers.
(One was translated into Russian. I got a copy. It was weird to see.)
The next article in the series will cover Web Traffic and Visitors,
Search Engine Optimization, and advertising revenue. Stay tuned.
