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The stock photo and porn industries have more in common than you may think…

Before I start, this is a look at how the business models of both industries have been changed by the digital revolution.This is not a comment on the moralities or otherwise of the Porn industry or indeed, of those photographers choosing to licence images for small fees on microstock sites. It’s simply a look at how close the history of our own stock licencing business model is to that of other industries even though we may not have realised it.

Last night I turned on the TV and tuned into a documentary made by the wonderful Louis Theroux, a fine British film-maker who had previously visited the LA Porn industry in the 1990s and who was now revisiting the people he had met then to see how the industry was going today. If you can get access to the BBC iPlayer you can watch the documentary here.

At the time I tuned in I had no idea I would be writing this blog post. About 15 minutes into the programme it was pretty obvious that what had happened to the Porn industry since the mid-90s had happened to us in the Photography industry too. So I was keen to see how their industry was going to cope in 2012.

History

Back in the mid-90s the Porn industry was thriving. Studios were churning out films to meet high consumer demand. Actors and actresses were paid lots of money for their work because they were in demand and the films were high $ grossing. The cost of production was high due to the technology involved, the larger studios had no real competition.

Back in the mid-90s the Stock industry was thriving. Getty Images was the largest supplier of stock imagery and pro-photographers who jumped into stock production saw huge $ sales and had little competition by comparison with today. The cost of production was high due to film & dupe transparency costs. Obviously in the days of film images (whether transparency or negative) each request had to be physically couriered to the design agency/end-client direct to be scanned for repro then returned.

Distribution model

The Porn industry distributed its content through sex shops and mail order and a few other outlets.

The Stock industry distributed all its content through a handful of newly established agencies like Getty & Corbis.

Content creators

The Porn industry content creators were all professionals, both studios and performers.

The Stock industry content creators were all professionals, both studios and photographers/models.

 

Then came the internet and advancements in film & camera technology that changed the game…

Amateurs/Self-publishing

The Porn industry saw an influx of amateurs and new start-ups gaining a foothold. They could use cameras that were previously unaffordable to make their own movies. They could set their own prices for content, regardless of the cost of production. For a lot of amateurs they looked on it as getting paid for something they enjoyed doing. Content supply multiplied tenfold overnight.

The Stock industry saw an influx of amateurs and new start-ups gaining a foothold. They could use cameras and software that was previously unaffordable to make their own images. They could set their own prices for content, regardless of the cost of production. For a lot of amateurs they looked on it as getting paid for something they enjoyed doing. Content supply multiplied tenfold overnight.

Internet distribution

The Porn Industry were quick to adopt the blossoming internet as a major distribution channel. No longer would a customer have to risk the embarrassment of running into a sex-shop when they could simply download or stream the content straight into their own home – for a fee.

The Stock industry were quick to adopt the blossoming internet as a major distribution channel. They could distribute scanned content quickly and easily worldwide opening up many new markets. As digital capture quality matured, agencies accepted digital images which made the whole distribution process both faster, easier and more profitable.

In both industries the $$ rolled in. What was going to stop it?

Oversupply/Competition

In the Porn industry the flood of new studios emerging and amateurs running home-made sites became a flood. Soon, the internet was awash with films that could be accessed cheaply and almost free if not free altogether. Competition ensued and studio was pitched against studio and against the amateur producer, all chasing those consumer $ (that in the past they controlled to an extent) but which were now being spent all over the vastness of the internet, not just via their pre-internet distribution channels which were pretty much a monopoly.

In the Stock industry a myriad of new internet-based agencies sprung up to compete against the traditional might of Getty and Corbis. Photographers also self-published and sold image licences directly from their own sites. Amateur photographers realised they could also join the party and started to supply stock sites with content previously only supplied by professionals. Some were happy to upload images and let others use them for free just to be ‘published’.

Fees & business viability

In the Porn industry two things happened. So many films were being made that the prices were falling. due to competition. This had a knock-on effect to performer’s fees. The publicity surrounding the Porn industry’s heyday was such that many young people saw a ‘career’ in porn, however short, as a way of making large amounts of $$ fast. Except the oversupply of performers meant that many would happily work for lower and lower fees just to get the gig in the hope that they would someday become a “star” and earn more money. Many of the amateurs who started their own porn sites quickly realised that without getting qualified traffic/buyers to their sites they were not going to make any money, certainly not the riches they thought they could make by hosting their own self-produced content.

In the Stock industry a remarkably similar turn of events unfolded. When digital cameras hit the magic crossover point of quality & affordability images started to be produced at a phenomenal rate. This in-turn led to an oversupply at many libraries of all the basic image needs and with so much competition the laws of supply and demand kick in and prices get lowered by agencies eager to maintain “market share” (i.e. customers who will only buy from them). I’d mention ‘microstock’ here or the buyouts of smaller agencies by larger ones or the effect on commissioned photography but those are best saved for other posts.

The agencies realised that although prices were dropping, they could increase their profitability by increasing the volume of images sold. So, given that there’s a finite number of professionals still in the industry, agencies turned their sights on ‘crowdsourcing’ amateur content creators, who were actively courted by many of the agencies. This in turn led to even greater numbers of submitted images, massive dilution and oversupply of the “low hanging fruit” type material that had low-production value and was fairly easy to accomplish. Of course, this sold in volume and was good for the agencies who got a percentage of each sale but not so great for the content-providers who only got a percentage of their sales. Most of the amateur content providers can be seen posting on stock agency forums bemoaning the fact that they really aren’t making much money for all the effort they have put in and that fees are on a downward trajectory. I guess if there’s a “porn star forum” somewhere in cyberspace it would pretty much be the same there too.

Piracy

In the Porn industry and Stock industry piracy is a major concern. Just as with any other type of digital media it would appear that some think if they can find it on the internet it’s free, and that applies to some content users like designers and end-clients too. Thankfully DMCA and ‘reverse image search technology’ (where you upload an image and it’ll tell you where else it’s to be found on the internet) are maturing too and making it harder for stolen content to prosper.

Raising the bar & exclusivity

In Louis’ film the Porn industry has realised it has to do something to stop the rot. Competition and continued price erosion cannot be counterbalanced by increased production (not least because a lot of producers had given up on the industry for some or all of the aforementioned reasons). Their solution is increased production values. They are making films with an actual plot, with better locations and set design, with a costume budget and with performers who are ‘exclusively signed’ to a production studio. They are making ‘parody’ films of regular titles (think Porn versions of Superman and Iron man etc). They figure that people will pay good $ for a well produced porn film. Only time will tell.

The Stock industry is still grappling with the problems it has made for itself from oversupply and constant cutting of fees to grab market-share. Top end content providers are being more cautious about who they place their best work with and realise that exclusive models often give the best returns. The race to the bottom seems to have been happening for a while but there are glimmerings of hope too, in the way some of the top-end but lower-priced microstock material is being syphoned off into ‘premium’ style collections.

There is an awfully long way to go yet. Any industry that relies on a digital content creation and distribution model is going through massive change. I was surprised to see that all the problems that exist in today’s Stock Photography industry also exist in the Porn industry. I didn’t expect that. My own feeling is that both lower priced and higher priced content can co-exist to supply different markets. Here at incamerastock we edit tightly, keyword well and have good sales as a result, even though a lot of our content is far from unique, it is, however, well-produced!

Whatever the outcome, it’s clear from speaking to peers and from general reading around the internet that a lot of content providers will no longer accept their work being sold for less than it cost to produce while at the same time battling massive dilution from their competition and seeing their sales fall.

Perhaps exclusivity and higher production values is the holy grail?

Perhaps the Porn industry just might be able to teach us a thing or two…

 

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