Network Effects

There is a field of sociology that focus on networks and how actions based on locations within those networks lead to decisions and can predict behavior. These network studies have also shown that by exploiting the position one may have in the network, one can extract value from connecting one network to another.

This is exactly what happened in the stock photography market in the late 1980s. Photographers had been building collections of images for decades and had filing cabinets filled with unused images. There was one problem though; most of these photographers had very weak ties to those who needed the images. Maybe they had connections with art buyers but those relationships were small in number. On the other side, there were thousands of purchasers with photo needs who maybe only needed one image and did not have the budget to hire a photographer to take that one image. This led to a structural hole that was waiting for smart individuals to fill.

Getty and Corbis built the bridge across this gap and were able to extract value at an astonishing rate. As other players stepped in to fill this structural hole, Getty, being the voracious money eating animal that it is, swallowed them up as rapidly as it could. Photodisc, Tony Stone, Digital Vision and others were seen as valuable pieces to an ever growing bridge. Getty laughed all the way to the bank as it extracted more and more value from photographers’ collections. Photographers were more than willing to play along because the stock agencies were filling a structural gap that the majority of photographers were not capable of filling. Many reaped rich rewards as they received their slice of the pie.

What happened next, unfortunately for Getty, Corbis and all the photographers riding on their coat tails was that other players were able to step in and create successful bridges between these two networks. The market changed and Getty and Corbis have been playing catch up ever since.

What has not changed is that there are still large amounts of value to be extracted within the network. Money is flowing; the problem now is that it’s flowing across many more bridges and at smaller individual transaction amounts. Photographers individually are not doing as well, but the overall value of the industry still exists. The tricky question is trying to figure out how to position one to extract as much value individually as possible. I’m starting to think that at an individual level this may not be possible anymore but stock photography is not dead.

For me, I see that stock will have a role in my photographic future, but more as an ancillary income stream, as it will serve as a useful outlet for my archives, but I do not see it being the strategic linchpin for my future income generating plans.