Skype Founders Claim eBay No Longer Has A Right To Skype's Core Tech

Explaining Why 'If We Charge, People Will Pay' Thinking Is Misguided

from the go-King-go dept

Fri, Jul 31st 2009 5:46am — Mike Masnick

Rose M. Welch points us to a wonderful writeup by King Kaufman at Salon (whose sports column I miss -- but the value of his work about the future of journalism more than makes up for it), concerning the news that Time Magazine used a stock photo it bought from iStockPhoto for a recent cover story. The photographer whose photograph was used was thrilled (as were some of the other photographers). However, there was also a group of photographers who went on to berate him (the photographer) for getting screwed over by a "multi-billion dollar company." Except, of course, they've missed the point. The photograph had already been taken (it didn't take any more work by the photographer to do this) and he was perfectly happy to get money he wouldn't have received otherwise -- even if it was a small amount. From there, Kaufman goes into beautiful beat down mode, and explains how the complaining photographers are flat-out wrong... while also comparing the situation to journalists who say the answer is to just put up a paywall and magically people will pay. It's so good, that I'm quoting a large portion of it, but go read the whole thing as well (and then follow that blog):

Saying that if photographers all refused to do stock photography they'd all get paid more is like saying that if restaurants all refused to give customers napkins without charging they'd all make a bundle on napkin sales. It's like saying that if local bands refused to play for drinks at dive bars, they'd all make good money playing music.

It's also like saying that if news organizations stopped giving away content on the Web, people would pay for news content online. It's absurd.

The posters in that forum who are making that argument are failing, or refusing, to understand basic economics, if not human nature. All photographers are not going to refuse to do stock photography. The ones who do refuse will simply be opening up the market for those willing to sell their pictures cheaply, either because they're not in it for the money or because they can make a profit on volume.

And those arguing that Time should have paid more for this stock photo because it sometimes pays more for other photos, or because it has a lot of money, are forgetting a little thing called supply and demand.

We should note, though, that because Time prints so many copies, it is likely it had to pay iStockphoto for an unlimited-run license, and that its cost was more like $125 than $30. Still nowhere near thousands, and we should also note that Lam, the photographer, was thrilled with his Time cover at a price of $30, and plenty of his colleagues were thrilled for him.

The same pricing dynamic is in play in journalism. The price is not set by how much time, effort, talent or experience went into making the product, and it's not set by how much money the customer has. It's set by supply and demand. The supply of stock photography is very large. The supply of general news content is huge.

If Time hadn't found Lam's stock photo of coins in a jar for $30, or $125, it would have found a similar photo for a similar price. If news consumers can't get their news online for free from their favorite news organization, they'll find it for free somewhere else.

What happened with Lam's photo is not a failure of the system, not a case of photographers eating their own and not a matter of big, rich Time magazine taking advantage of the little guy. I doubt those photographers would expect Time, because it has such a big budget, to pay $3 for a postage stamp or $20 a pound for the office coffee.

What happened with Lam's photo is simply the way the industry works. Time paid what it paid for that image because that's about what it was worth.

When the barrier to entry is low, the supply of goods is large and the alternatives available to the buyer many, the price is going to be low. Wishing it were otherwise, as the photographers are doing in that online forum and as opponents of free content do in Future of Journalism nerdland, will not make it otherwise.

Indeed. What Kaufman describes is the same sort of economic illiteracy that we run into in conversations all the time. People feel that because they don't like the way things work, they need to either blame those who are happy with the way things work or to blame those of us who are simply explaining the economics of supply and demand to them. It's a blame the messenger sort of thing. If I could create a world where photographers and journalists could magically make tons of money, I would. That would be great. But, that's not the world we live in, and pretending it is (or pretending you can simply start charging high amounts and people will keep paying) doesn't help matters. Instead, figuring out ways to understand the economics at play, and then looking for ways to take advantage of those basic economics, seems to make the most sense. This is not about what "should" happen or what people would "like" to happen. It's about what is happening, and learning to take advantage of it.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: business, demand, economics, journalism, king kaufman, magazine covers, paywalls, photographs, supply

31 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 31 Jul 2009 @ 5:49am

"If I could create a world where photographers and journalists could magically make tons of money, I would."

When everything is "FREE!" is it unlikely that anyone will make any more, let alone a ton.

We have met the enemy, it is us.
[ link to this | view in thread ]
kevjohn, 31 Jul 2009 @ 6:22am

To be fair, a lot of the photogs on Model Mayhem are money-grubbing morons, worse than the models they complain about 24/7. I am surprised that there were so many of them who don't understand the simple way in which stock photography works though.

Cover of Time magazine, where do I sign up? Hell, I'd pay them $30 for the publicity.
[ link to this | view in thread ]
Chris Wahl (profile), 31 Jul 2009 @ 6:51am

Re: Cover of Time
Agreed. I would think being the cover picture is worth buying a copy, having it framed, and feeling a sense of achievement. Why is it that all rewards must be monetary for so many?
[ link to this | view in thread ]
some old guy, 31 Jul 2009 @ 6:54am

Re:
"We have met the enemy, it is us."

No, we have met the enemy, and it is you.
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 6:58am

Economics
Like actor and musicians there is a ready supply of wannabe photographers out there (many of whom are not any less competant than most current professionals). If economic conditions were made more "favourable" to them (eg by changes in copyright law) then all that would happen is that more of the wannbees would enter the market - increasing the supply and guaranteeing the existence of a struggling "tail".
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 7:21am

Re:
Cover of Time magazine, where do I sign up? Hell, I'd pay them $30 for the publicity.

EXACTLY. you're getting more from time than time is getting from you.

the biggest disruption of the internet is the commoditization of content, and it hit photography years ago. since the tech does so much now that most college kids with a DSLR can shoot just as well as a 20 year veteran, the only remaining factor of "who wins" is rarity of subject matter. and since the internet connects EVERYONE, and there are hundreds or thousands of other pictures JUST LIKE THIS ONE, it's the luck of the draw when some big company decides to spend a ton of money putting your content in front of millions of eyeballs.
[ link to this | view in thread ]
Richard, 31 Jul 2009 @ 7:21am

Supply and Demand
A quick Google image search reveals over 300000 image results for "jar of coins". Looking through the first few pages suggests that 5-10% of these images "could" have been used by Time. I could take a similar usable image in 10 minutes. I reckon $30 is generous...
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 7:27am

Re: Re:
Which brings us back to a basic problem, if you remove the economic motivations, you end up losing quality, and we end up only with amateur content.

At some point, something happens, and there will be nobody to cover it, then you remember why things get paid for.
[ link to this | view in thread ]
ChurchHatesTucker (profile), 31 Jul 2009 @ 8:03am

Re: Re: Re:
"Which brings us back to a basic problem, if you remove the economic motivations, you end up losing quality, and we end up only with amateur content."

Huh? The whole point is that the quality of amateur efforts now overlaps with the quality of pro efforts. So quality doesn't suffer. Moreover, we have increased coverage b/c of the amateurs far outnumbering the pros.

Besides, quality isn't everything. These days you're better off with a cameraphone vid from an amateur than an "I'm on my way" from a pro.
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 8:19am

Re: Re: Re:
Completely ignoring the fact that if nobody is covering it, it is worth MORE. How's that for economic motivation?

I own a farm, and start growing corn, because it's worth good money. 50 other people figure that out, and grow their own corn. 1000 people join in. Then 1 million. Suddenly, corn is worthless.

At some point, no one grows corn because it's worthless. Then I start growing corn again...and charge whatever I want, because I have a monopoly on the product.

And then 50 other people figure out there's good money in corn...

Really, did you even think this through?
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 8:22am

Stock photography for many years was the almost exclusive province of Getty and Corbis. Prices for use were...well...pricey.

With the advent of digital cameras and their widespread popularity among photographer wannabes came various microstock sites where the prices for use were...well...cheap.

As the microstock sites have gained popularity with stock photo users many have been acquired and folded into to large stock photo companies. For example, Jupiter Media and all of its associated companies were recently acquired by Getty. Of course, there are still many microstock companies around that remain independent, though I suspect many of them hope for a day in the future where the large stock companies show interest in acquiring them as well.

Interestingly, I have not as yet seen any evidence that the large stock companies are using these acquisitions as a way to limit the stock photo market and thereby maintain prices at an artificially high level. Rather, it appears to me that they are being integrated in a manner where the photo offerings range from pricey to cheap. The photos of well-known photographers tend to command a premium price, whereas those of the weekend photographer who happens to take a decent photo command significantly less.

An aspect of the stock photo market that distinguishes it from the entertainment market is that it is primarily utilitarian, i.e., the end user typically utilizes stock photos in a business context.

BTW, for those who may need to avail themselves of stock photos but are not inclined to pay for even cheap stock (importantly, cheap does not in any way suggest inferior quality), they can always mosey over to www.sxc.hu and download stock for free. (Disclaimer: I have a few photos hosted at sxc that can be used for any purpose whatsoever, as opposed to the limited uses specified in the site's license terms for photo usage. I used to have many more there, but took them down when many of the newcomers to the site started obssessing about copyright and not the sheer fun of sharing photos.)
[ link to this | view in thread ]
Richard, 31 Jul 2009 @ 8:32am

Re: Re: Re:
There is nothing mystical about being a professional.
(I detect snobbery here.)

Amateurs can now afford to work with equipment that is no worse than what the professionals use. For simple images like the jar of coins the amateur image will be indistinguishable from the professional one. If there is an economic need for so called "professional" quality images then there will be a market for them.

Remember the cardinal point of economics - something is worth what someone is prepared to pay for it - regardless of the effort/skill/talent/inspiration/expense that went into it making it. That is the definition of its value.
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 9:05am

Re: Re: Re: Re:
"For simple images like the jar of coins the amateur image will be indistinguishable from the professional one."

In many, many cases this is likely true. However, some years ago I had the good fortune of having a professional photographer as a client...an idividual whose work was consistently recognized as the best of the best.

I think it fair to say that if he had taken a photo of a mere jar of coins it would have, without a doubt, stuck out and distinguished itself from all others. The point being made is that merely having tools to take photographs does not necessarily put one in the same league as one who knows how to squeeze every ounce of quality possible from even the most mundane of subjects.

I have not the slightest doubt that he could have used a pinhole camera made from an oatmeal container and produced a photo that would easily blow away anything that most digital SLR amateurs (sp) could produce from all their pricey equipment.

Sadly, my friend and former client passed away about two years ago from cancer. With his passing the world of photography lost a true genius.
[ link to this | view in thread ]
jjmsan (profile), 31 Jul 2009 @ 9:31am

Re:
If "everything" is free, what do you need money for?
[ link to this | view in thread ]
jjmsan (profile), 31 Jul 2009 @ 9:35am

Re: Re: Re:
If you have enough amateur content, you will still wind up with useable pictures. If you have seen the out put from a photo session the photographer has 10 to 12 shots for every one he/she uses.
[ link to this | view in thread ]
Ilfar, 31 Jul 2009 @ 10:35am

Re: Re:
You need the money to stick in a jar and take photos of?
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 10:54am

Re: Re: Re: Re: Re:
the idea is that as content is commoditized, you have 100 amateurs producing 20 images each (with only 2 that are any good) for a total of 2k images with 200 good images. meanwhile, lets say a pro also produces 200 pictures. which costs more... the time spent sifting through those 2k images for the 20 good ones and then paying under $50 for that image, or paying the pro $1k or more?

and if the picture bank has a good prioritization algo (i.e. it stops displaying images that the target audience keeps passing on) then it substantially cuts down on the sorting time. you end up with a high probability of good content, and you're selling it for low rates.
[ link to this | view in thread ]
Matthew, 31 Jul 2009 @ 11:35am

Re:
When EVERYTHING is free, then people will create for just one reason: because they love to create. The world will be a better place then.
[ link to this | view in thread ]
kevjohn (profile), 31 Jul 2009 @ 11:56am

Re: Re: Re: Re:
You can go out and buy a $4000 carbon fiber-frame bike but your riding will certainly still be distinguishable from a professional rider's. And you can go on any golf course and see two dozen guys playing with the same gear Tiger uses, but it doesn't help them break 100. On the same note, I've seen a lot of amateur photogs' work, mine own included, and it's extremely rare to see any that rises to the quality of a top professional. Then again, there are a lot of pure hacks out there making a good living off of their camera...
[ link to this | view in thread ]
James H, 31 Jul 2009 @ 12:10pm

Payin' for the photograph
One thing worth noting -- the pic was already taken. I think that if a photographer, even an amateur, was told, "We'll pay you thirty bucks to go get us a photo of a jar of coins as a work for hire," that photographer would be foolish to take the contract. Once he'd spent the time to find a jar of coins, set up the jar of coins, photograph the jar of coins, sort through the photos of the jar of coins, and Photoshop the picture of the jar of coins, that photog would have taken so long to do it that the thirty bucks couldn't even begin to pay for his time.

On the other hand, if the photog has a photo of a jar of coins lying around, and the mag says, "Hey, that's a great photo of a jar of coins. Here's 30 bucks!" The photog just made his thirty bucks with no new work.
[ link to this | view in thread ]
Bernard Gilroy (profile), 31 Jul 2009 @ 1:44pm

Re: Re: Re: Re: Re:
And you can go on any golf course and see two dozen guys playing with the same gear Tiger uses, but it doesn't help them break 100.
Yep. Because Tiger Woods adds value (if you think that golfing has value... I don't but that's not important here). Likewise, if there existed some professional version of coins-in-a-jar that was truly demonstrably better than the one used, that photographer could charge more. But "good enough" was in fact good enough, and the magazine didn't see enough extra value in getting a prime art shot. So they didn't. Basically, it's the way the market is supposed to work. Commoditized things end up being cheaper because anyone can produce them. Stock photos, by dint of being "stock", are pretty commoditized. A specialty photo -- like, say, a hand-crafted oak desk -- is rarer and can command a higher price. But if you don't want or need the uniqueness, you can settle for an Ikea desk for a lot less money. Professionals don't like amateurs using the Net because they make it clear that for many purposes -- but not all purposes -- the world can get by with a lower-quality, lower-price picture. They see the flood of amateur pics as "contaminating" their market. But really, they're just expanding it.
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 2:03pm

Re: Re: Re: Re:
It isn't a question of quality or anything else, it's a question of work ethics.

If you are not getting paid to work, you work when you feel like it. So the vast majority of images will be shot on nice sunny days, in nice places. It's cold? Raining? Snow and Ice? The amateurs stay home and play Wii. The professionals getting paid to work show up and do the work.

It's all in how you look at it.
[ link to this | view in thread ]
Anonymous Coward, 31 Jul 2009 @ 6:21pm

"Why is it that all rewards must be monetary for so many?"

spoken, no doubt, from the comfort of your 9 to 5, salaried lifestyle...
[ link to this | view in thread ]
Anonymous Coward, 1 Aug 2009 @ 7:13am

Re: Re:
haha. God, I have to laugh at this. It's the same mentality that sent hippies to live on communes, they think their lives will be better. Most of them leave after they find out it's hard work to grow your own food and milk your own cow.

When everything is free, there is no more corner store. There is no more walmart, there is no nothing. Heck, good luck finding a place to live, because you have to build it yourself out of whatever you can find, because there are no building centers, no 2 x 4 wood, no concrete, because everything is free and nobody is going to do the hard work so you can live for free.

In simpler media terms, there are certain jobs in media that are hard work: Showing up to the remote airplane crash in the middle of winter, filming the war(s) in africa, and so on. Working editing these stories and fact checking is another boring an horrible job. I could go on, but safe to say that there are plenty of job that, if nobody was paying, most people would never do. Safe to say that when everything is free, nobody will do those jobs. So what we get is only what is comfortable and easy to report, not what is actually "work".

"FREE!" is never free, you just don't see the cost directly. If you think something is free, look more closely, you are paying for it somehow.
[ link to this | view in thread ]
Guyman, 1 Aug 2009 @ 1:11pm

Think of the good that photo probably did for the photographer's reputation. Money isn't the only thing you can get from a trade, and a good reputation can result in more future sales, customers who are willing to pay more, and greater opportunities in general.
[ link to this | view in thread ]
Andrew D. Todd, 2 Aug 2009 @ 3:07am

Stock Photographs Are Trash.
As a writer, I don't like stock photos. They inevitably lack focus. If you are not in a postion to tell a detailed story about a picture, then you shouldn't be using it. It's just "eye candy," fluff. Of course, a journalist can carry a camera easily enough, and take pictures if the occasion presents itself. Often it is simpler not to have to drag along a photographer, who may get in the way. But that is something different.

The kind of writer who uses a picture of a jar of pennies to illustrate an article about economics is likely to be a mentally lazy writer, who does not trouble to teach himself the relevant details, such as the actual mechanics of money transfers and stuff like that. Economics is not about people counting out pennies. A writer like that is always going to be repeating the conventional wisdom, instead of thinking for himself. This is no doubt true of Time Magazine as a whole.

A classic example of the abuse of stock photographs is the story of The Everywhere Girl, otherwise known as Jennifer Chandra (Jennifer Anderson). She was a photographer's model, and did a photo shoot for a fixed fee, some years ago. The photographer subsequently sold her image to an extraordinary number of advertisers, in every conceivable line of business. Enterprising journalists eventually tracked down who was using The Everywhere Girl pictures, and held the companies and organizations up to public ridicule. Even Harvard University was caught in the trap. All these companies and organizations revealed about themselves was that they had no idea who they were, or what they stood for, and that they had no good reason for being in business. The computer companies which used the pictures revealed that their computers differed from those of discount suppliers only in price.

http://www.theeverywheregirl.com/2006/07/05/the-infamous-photo-shoot/

Incidentally, I read Trains Magazine. They have some of the finest landscape photography which is published nowadays. Their reporters are all photographers as well, and, as you would expect for a specialist publication, railroad experts. Often, they work, by invitation, in places not open to the general public, such as railroad yards and locomotive cabs, and one of their essential qualifications is the ability to keep safe around heavy equipment. In that line of work, it really helps to be a former railroader.
[ link to this | view in thread ]
John Doe, 3 Aug 2009 @ 4:54am

Re: Re: Re: Re: Re:
I have to call BS on this one. Go surf any of the amateur photography forums and tell me people are only taking photos when it is warm and sunny. They get up early, stay up late, go out in the rain, snow, storms, you name it. Amateurs may be more dedicated than most pros because it isn't a job to them, it is a passion. You will also note that many amateurs take some incredible photos. Maybe they don't get the same percentage of keepers as pros, but since they outnumber pros, there is a large body of work.

I know, because I have done photography as a hobby myself.
[ link to this | view in thread ]
Anonymous Coward, 3 Aug 2009 @ 9:02am

Re: Re: Re: Re: Re: Re:
They are only up because they WANT to be, not because they HAVE to be. There is a fire in the next town. It's snowing. The football game is on. Your wife / husband / other just made you a nice rum toddy. Are you going out to shoot pictures for tomorrow's news, or are you enjoying the game a toddy?

Amateur != professional
[ link to this | view in thread ]
Thomas Jones, 11 Aug 2009 @ 12:52pm

Re:
?
[ link to this | view in thread ]
Thomas Jones, 11 Aug 2009 @ 12:57pm

Re: Re: Re:
Physical goods will never be free because they have a limited supply, same economics as the information will end up being free argument.

Infinite Supply ⇒ $0 marginal cost ⇒ $0 per unit price (eventually)

Finite Supply ⇒ non-zero marginal cost ⇒ non-zero unit price
[ link to this | view in thread ]
Thomas Jones, 11 Aug 2009 @ 12:59pm

Re: Re: Re: Re:
err upon closer reading of your post I notice that you are essentially saying the same thing I said only more verbosely.
[ link to this | view in thread ]