Photoshelter Collection Comes to a Premature End

 Some things you just don’t see coming – and those really tend to sting the most – and leave a mark.

The PhotoShelter Collection will leave a mark – and in more ways than one.

This morning, I received a personal call from Grover Sanschagrin, a friend and colleague of mine who was one of the founders of PhotoShelter and it’s “Collection.”  He told me that the current market forces were forcing them to close down their ambitious “Collection” venture prematurely – while the parent company PhotoShelter and it’s Personal Archive is here to stay.  

For those of you who may be unaware of the PhotoShelter Collection, this venture was a breath of (needed) fresh air in our industry.    Their idea was to create one of the best high-quality photography collections out there – and to leverage new technologies in ways that would allow the photographers to keep a lion’s share of the profits from each sale (both commercial and editorial image sales.)  Unlike most of their competitors – where getting less than 50% of each sale, and in fact where 30% to less than 5% of the total sale ever finding it’s way back to the photographer is unfortunately not an uncommon result – PhotoShelter made a point of “putting the photographers first” and giving them 70% of each sale.   For those of you new to the business – that number is traditionally the amount that goes to the agency NOT the photographer – I just wanted to make that doubly clear.  

The founders of the PhotoShelter Collection believed that by leveraging high-tech solutions – they could ensure that most of the profit went towards the artists who created those images – as opposed to some stockholder who didn’t give a rat’s ass about quality imagery – and was simply looking to “increase quarterly profits” and their stock’s share price… 

And they embarked on this venture with intelligence, style, disciplined research, and a tremendous amount of positive energy and drive – with the help of some of the best staff I’ve seen at any agency I’ve worked with.   Competing with the likes of Getty, Corbis, iStockPhoto and others is ambitious to say the least.   Their battle was an uphill one – and we all knew it – but for those of us who joined their ranks – we all understood that in trying to help THEM succeed – we would in many ways be trying to help all of US succeed long term.

With events such as “Shoot The Day” and the publicity that surrounded that event – all looked to be going very well.   But this morning’s phone call, and PhotoShelter’s decision was in many ways a barometer of what’s happening in the industry today.

I went to the PhotoShelter offices today to speak with some of the people (friends) I’ve known there for years and was able to speak with Allen Murabayashi – the company’s CEO.   Allen confirmed that continuing on with the PhotoShelter Collection would have forced them to look for additional funding (which is not going to happen in this economy) or to start slashing the prices of photos and/or the percentages of what they would give photographers – which is not something they were willing to do.   To his, and PhotoShelter’s credit – they chose to make this move to ensure that the PhotoShelter Personal Archive would be around long-term.  This also is somewhat of a departure from the way most agencies have traditionally been managed:  he and the management decided not to drive themselves into debt and go down in flames – and made the decision after numerous consultations to call it now, and keep the company afloat.  After all – who needs yet another photo agency to go belly up due to bad business management?

While it was a personal blow for me to see this effort end prematurely – I also saw the bigger picture: this is a blow to our entire industry.  It’s a blow to every photographer who has ever dared to challenge the idea that these mega agencies should get more than 50%-90% of each sale – derived from the work that photographers put their heart and soul into.   It’s a blow for every photographer who ever wanted to fight “The Man” or the “Evil Empire.”   

I won’t call out who plays the role of “Darth Vader” in this story  – we all know who “he” or “it” is – and in fact many of my friends work there – so allow me to steer clear of that for now, as I in no way aim to tarnish them.   What I will say is that “it”  – referred to as the “incumbent player” in Photoshelter’s press release – has dealt yet another blow to our industry.   It’s one thing to be the biggest and baddest in the business – and to become a monopoly by beating everyone else out fair and square – that need to “win” and be the “best” is what capitalism is based on afterall… survival of the fittest.  But when one engages in business practices that not only help sow the seeds that may very well destroy the industry that one is part of – and perhaps even oneself – it’s hard to look favorably upon that company.

When I gave my images over to the PhotoShelter Collection – I knew that I was perhaps hampering my changes of making stock sales – at least initially – relative to giving those same images to the “incumbent player.”  BUT IF FELT RIGHT.   Sometimes you do things to benefit just you – at other times you try to do things that might somehow benefit everyone else in the industry along with you…

 

In the end – I think that what really hurt the PhotoShelter Collections chances, was that while they could compete toe to toe with the larger agency in terms of providing original content in a timely manner – and even remain competitive in terms of pricing – they could not match the “subscription prices” that the other “incumbent player” was engaging in.   This “subscription pricing”  – like microstock – is and will hurt us ALL.  And we shouldn’t be surprised to see royalty checks coming from those that engage in that practice, that are the equivalent to less than a fraction of a percentage point of the total sales price that the same images would have garnered prior to this practice going into effect.   Most of the imagery you’re seeing today – both rights managed imagery and royalty free images – end up in the publications you read as part of a “subscription”  (i.e. the publications are paying for a feed of images – not per image.  Which saves them a LOT of money – and takes it right out of the photographers’ pockets.)

While some may be quick to judge this premature demise of a good concept – and question it’s execution, I’d offer two things to consider:  First, this was a carefully laid plan backed by  a lot of research, and a lot was invested in getting good people to execute it.  Ultimately you have to roll the dice to see if you can change the system – no venture is without risk.  Second – while one may want to put the “best” imagery out there – sometimes “good enough” is “good enough” for the buyers out there… unfortunately.   It’s hard to argue the value of an image – any image – when a bean counter is the one making the final (financial) decision.

Ultimately – the founders of PhotoShelter had to make a tough decision,  given that the buyer behavior and market were not changing at a quick enough pace (which is not surprising, the photography market just isn’t “getting it” these days at all – and not embracing change)  they had to chose to cut the cord now before this endeavor threatened the company as a whole.   The good news is that PhotoShelter is healthy and plans to be around long term – their main business (as a place to store your valuable images online, and with tools to help you share them and sell them through a variety of avenues) is here to stay.

I do however feel very sorry for those that will invevitably be let go as a result of this downsizing – and for the disappearance of their “Shoot the Blog”  venture that was written by one of the first full-time (paid) photo bloggers that I know of, Rachel Hulin.  (Who is incidentally continuing on her own here.)

What is clear is that while the PhotoShelter Collection never fully achieved their ultimate goal of “Changing The Image Marketplace For Good,” as was their slogan – they sure made an impact on many of us, turned us into believers, and helped all of us realize that there is an alternative to the “evil empire” out there.   While I, like many out there, may feel more pain than pride at this very moment – I hope that this was but the beginning of a trend that will continue to try and re-shape the photo industry.  

The PhotoShelter Collection did indeed leave a mark – and I expect the PhotoShelter Personal Archive to continue in that direction from hereon out.

N.B.: On another note, Corbis laid off 16% of it’s workforce today… 175 people.  And to find out more about Photoshelter’s plans and FAQs go here.