In the following interview Allen Murabayashi, CEO of Photoshelter, answers to some of the questions about his company, the basic ideas and reasons behind Photoshelter.
Andy: Allen, what was the basic idea to found Photoshelter?
Allen: We live in an increasingly digital world. The proliferation of devices like digital cameras, iPods, and computers in the past few years means that as a society we are accumulating more digital assets. Camera resolutions are going up, and professional photographers are concerned because they realize they can't indefinitely chain hard drives to their computers. At the same time, broadband has become commonplace. So having an online archive is achievable.
Photographers don't have time to learn how to administer their own RAID. They don't have time to swap out drives, or deal with network security. So Photoshelter provides a managed archiving solution that is hassle free, and provides a level of redundancy that no single photographer could match in his/her home.
Secondly, the consolidation of the industry has made it difficult for the individual photographer to compete. I think the famous statistic is that Getty and Corbis do 40% of the stock business with 1% of the photographers. That means there is an enormous amount of talent that is not being represented through picture sales. Providing a marketplace for that to happen is a goal of Photoshelter.
Andy: How do you think PhotoShelter can compete against Digital Railroad and IPNStock?
Allen: First, neither is an archiving solution. Regardless of claims, both systems are designed and priced to sell a limited set of images. And while DRR doesn't currently have an e-commerce solution, we assume that they will develop a commission-based system like everything else out there.
Photoshelter's vision starts a step earlier at the point of the archive. After the images are safe, we're agnostic on how you market/sell your images. We provide an e-commerce solution so that a photographer can manage direct sales to compliment their agency relationship. Or we'll happily feed images into any system, if you choose to sell images elsewhere.
So, in our opinion, we're not competing at the same level. IPNStock appears to be an alternative brand to Getty. DRR appears to offer agency capability to photojournalists. We do not see ourselves as a competitor to agencies. People will use Photoshelter as a springboard for their sales and marketing. In fact, we're talking to a number of agencies about using Photoshelter as their commerce engine.
Also, this "industry" (i.e. the little guy creating their own "agency") is very nascent. DRR, for example, is often quoted as being an industry-changing force, but they only have a couple hundred clients. Printroom, by contrast has over 5,000 clients. So IPN and DRR might end up being major factors in the years to come, but it's impossible to tell at this point. We think it's a very exciting time for photographers and photo buyers. [Click continue to read the rest of the interview]
Andy: In a very competetive business field, what do you think are the main advantages of Photoshelter for photographers?
Allen: By making the archive the cornerstone of the service, we simplify the workflow, and provide a badly needed solution. Why do photographers take a picture, upload it to a computer, burn a CD, copy to an external hard drive, then send the images to an agency for sale? To us, the archive and the sales/marketing components should be integrated. They should all be fed from a single place - Photoshelter.
Photographers might be inclined to say "but I can buy a 1TB hard drive for $1000, so why would I want to use your service?" And the answer is that the 1TB hard drive has the same chance of failure as the 100GB hard drive. It will eventually break, and unless you are constantly moving data from last year's drive to this year's drive, you'll eventually suffer a catastrophic loss. You can consider RAID, tape back-up, etc, but then you're replicating what we already have at a much higher price. The cost of purchase is not the cost of ownership, so Photographers have to do the math to really understand the Total Cost of Ownership.
From there, we have services that allow the photographer to use the system in a variety of ways. We know of one photographer for a major magazine whose name will never appear on the site because he using it strictly as an archiving system. Another photographer has his selects up, but isn't using our commerce engine. Another event photographer is archiving and selling prints through Photoshelter. We can provide all of these, and so we're not concerned that you use the system in a specific way. Every photographer has a different set of needs and we try to provide a range of tools to address these needs. So we think photographers will realize that we are providing an extremely cost-effective solution to manage all the parts of photography that doesn't involve picture taking.
The bottom line is that if you can sell a few additional pictures per month by making your archive available to photo buyers, then the service pays for itself. You essentially get the archiving for free, while simplifying your workflow.
Andy: Are you planning to add other services to Photoshelter in the near feature?
Allen: Absolutely. We're always prototyping and developing new features and concepts, but of course, we cannot reveal what they are until they are ready.
Andy: Is your technology (the software) developed in-house or is it bought from
a third-party supplier?
Allen: We develop everything in-house to reduce our costs, which is passed on to photographers. Having come from HotJobs.com, I am aware how licensing fees can impact the costs of running a business at a large-scale. We want to make sure the business can scale without incurring massive overhead.
Andy: Photoshelter is taking a transaction fee of $1. Why don't you take a percentage fee?
Allen: This was something that was very important to us. Photoshelter is not an agency, and as such we don't provide the services that a traditional agency does to earn a commission (e.g. assembling picture packages, pushing work onto clients, dealing with billing and collections). You can argue whether an agency "deserves" 50%, but our only goal was to provide an alternative to the agency that allows a photographer to conduct some of his/her business directly with clients. We provide an electronic gateway, and we didn´t think that use of the gateway warranted a percentage of the sale.
Again, we don't expect everyone to take advantage of this service. Well-established photographers are happy with their agency representation, and some event photographers are very happy paying 15% to some of these print services. We wanted to allow photographers to receive 100% of the sale at the point of sale, instead of 50% after two weeks. It´s a new, alternative way to do business.
Andy: Is your focus solely on the US or do you intend to spread the word (Europe, Asia, etc.)?
Allen: We already have some international users, and there is nothing to prevent someone outside of the US from using Photoshelter. But because we are a young company, our marketing efforts will be restricted to the US for the near future.
[Related: "Photoshelter: Another ASP Service for Photographers"]