Saturday, 2 June 2007

Corbis to enter Microstock in July

Corbis originally stated it would enter the microstock market in the second quarter. They must be a little behind schedule as they have now informed the world via an interview with Cnet (well that is where I found out about it), that they will be opening shop in July.

Other than this article, I have been able to find any other detail. The pricing and commission structure is still unknown but it looks from the article that they will not be trying to attract exclusives. This seems sensible, at least at the start as there is no incentive to do so while they are building up customers.

It will also be interesting to see if they start off with photos from their existing portfolio (Corbis owns the rights to lots of photos - the cost of buying these is one reason they have never made a profit). Also on how strict they are with the review. Most new sites are more lax as they try to get their numbers up to critical mass. However, if Corbis already has a lot of its own photos on the site, it may launch with the critical mass needed, and therefore be able to be strict from the start.

One thing is know and that is that this will be an important city to be on. With a possible future tie in with Microsoft (Corbis is owned by Bill Gates) the potential is huge. They will not only target corporates (photos for PowerPoint presentations), but also home users (wallpaper and screen-savers for desktops) and students (photos for reports written in word).

So will I be joining - definately.

Extracts of article:

Corbis to take 'microstock' plunge
By Stephen Shankland
Staff Writer, CNET
June 1, 2007, 4:00 AM PDT

For the small army of photographers looking for Web sites to sell images at low prices, there already are many choices: Dreamstime, Fotolia, iStockphoto, Stockxpert, 123rf, BigStockPhoto, CreStock, LuckyOliver, Can Stock Photo, Shutterstock.

This month, Corbis, an established but traditional seller of stock photos, will add its name to the list as part of an effort to attain profitability. Until now, the company has missed out as this "microstock" market blossomed, with networks growing to encompass thousands of photographers and buyers. Gary Shenk, Corbis' president and, come July 1, its chief executive, is unworried about the timing.

Corbis, the other company Bill Gates founded and an established seller of stock photography, is about to take on a host of smaller rivals--and one bigger one--in the budding "microstock" realm of low-cost Web-based photo sales.

Corbis, the last of the big three stock-art firms to venture into the microstock realm, is counting on its microstock site as one of three major sources of revenue growth.

"It's by no means too late," Shenk said. "We feel the microstock industry is still at the top of the first inning. Nobody's really emerged with the ultimate experience."

The growth of microstock sites has been fueled by the increasing quality of digital cameras, the eagerness of amateur photographers to make a little supplementary income, and an appetite for low-cost, royalty-free photos. Corbis' two biggest rivals moved into the microstock business in 2006, sending a clear message that the microstock business was to be taken seriously. Jupiterimages acquired a 90 percent interest in Stockxpert, and stock art leader Getty Images acquired iStockphoto.

The head of one microstock rival, Fotolia, said he's unworried about Corbis' arrival as a direct competitor. "They have the name of Corbis, but it's a new business," said Oleg Tscheltzoff, Fotolia's co-founder and president. "What makes a microstock site successful is the customers," and Corbis will have to attract a new set.

There often are incentives for stock photographers to sell their work exclusively through one site--iStockphoto lets top exclusive photographers keep 40 percent of the proceeds compared to 20 percent for ordinary members, for example--but Corbis is counting on photographers spreading their eggs among several baskets.

"One thing we have going for us is that photographers are submitting to multiple sites. Very few are exclusively submitting to one site," Shenk said.

That assessment was one factor in Corbis' decision to build its own microstock site rather than purchase an existing one. "None of these companies out there have enormous barriers to entry or competitive advantage," Shenk said. "We decided building it ourselves, given the valuation environment, was a much better way to go."

Corbis can offer microstock members something most others can't: access to the higher-end stock art market. "We're using the microstock as a farm club to find great photographers who can sell their photographs on the main Corbis Web site," Shenk said.

Microstock sites may have shaken up the stock photo business, but Shenk plans on doing some shaking of his own by taking the microstock business into new domains.

"Right now the microstocks are still operating as mini-Corbises and mini-Gettys, selling into a very low end of the professional market," Shenk said. "The big opportunity is finding a much broader customer base--people who may never have bought a picture before (such as) kids putting pictures in school reports."

The other threat is whether cheaper sites will gobble up business by luring away otherwise high-paying customers. Shenk's counterpart at Getty, CEO Jonathan Klein, thinks the issue is legitimate but minor.

"I think cannibalization is a fact of life--and completely overblown," Klein said. But in a reference to the iStockphoto acquisition, he added, "If I have to be cannibalized, I'd rather cannibalize myself and find a new customer base."

Shenk agrees that microstocks generally involve new customers. "Nine out of ten customers of microstocks would never contemplate (buying) a picture at Corbis or Getty. The vast majority of microstock customers haven't even heard of Corbis."

The cannibalization issue may be slight, but the flip side is that Corbis can't benefit from a well-recognized, trusted brand.

And though microstock appeals to some commercial buyers, such as those who produce annual reports and PowerPoint presentations, Shenk believes all the emphasis on microstock has distracted competitors from more lucrative customers.

"While other companies are racing to the bottom of the market," Shenk said, "we're capturing a lot of share in the large, commercial part of our marketplace."


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