Interview With Digital Railroad´s CEO Evan Nisselson

I discovered Digital Railroad back in early summer 2004 und was impressed by the concept and the philosophy behind the company, the product and the services offered, as described here from my point of view in my blog post of August 2004.

Now it´s 2006 and definitely time for an update.

(Photos: Ron Haviv/VII Photo; click on photos to enlarge)

Andy: Evan, shortly before we met last time, I wrote about the snowball effect of the Digital Railroad philosophy. At that time, Digital Railroad showcased about 160 photographers and 8 photo agencies in the archive directory. Currently, Digital Railroad has about 300 photographers and 16 photo agencies.
Did the snowball effect really take off? How many photographers and photo agencies are signing up for your services at an average per month? How many photographers and photo agencies do you expect to have by the end of 2006?

Evan: The snowball effect that you so accurately wrote about is definitely progressing in terms of our number of subscribers; however, another key metric that is actually more important, in my mind, is our number of High-Quality photographers and agencies.

Not all Digital Railroad members are listed in our directory as per their choice. We presently have almost 500 photographers, 25 agencies, and 13,000 registered buyers in over 40 countries. Any site that is hyping the number of photographers without mentioning the quality of those photographers will most likely have a difficult time attracting and retaining photo buyers. Digital Railroad’s community is filled with award-winning photographers across all categories — from Photojournalism to Stock, from Sports to Commercial, from Nature to Fine Art. A true snowball effect takes time, and I think we are off to a great start. It takes years before imaging technology companies become major players in the industry, and we have only been live for a year and a half.

Andy: Around 500 photographers are paying monthly fees of about 50 Dollars to Digital Railroad. If a photographer sells an image through Digital Railroad, unlike Alamy, your company does not benefit in terms of money, taking a percentage cut or download fees. The awaited e-commerce feature is not introduced yet.

Evan: E-commerce is coming soon, along with other new and unique features, but we haven’t announced the business model associated with e-commerce yet.

Some of our members want e-commerce functionality, while others want to continue manually negotiating all their sales. Digital Railroad’s core principles are that of member control and member choice. We will provide an increasing array of great tools and services for our members, but it is important to point out that we will not force our members to use features that they do not want to use.

Additionally, I find it fascinating that many people say that it’s odd not to have e-commerce launched yet, but the reality is that less than 15% of the stock photography sales in the world are transacted online without human intervention; this is one of the major reasons that we didn’t develop this feature first. This low percentage will increase over time, but we focus on the proven business rule of developing features for 80% of the clients’ needs, not the needs of less than 20%.

Andy: With a deal like the one with Grazia Neri in October 2005, Digital Railroad for sure generates more revenues, in opposite to "only" dealing with photographers for a small monthly fee; it´s just another financial hemisphere. Is Digital Railroad starting to focus on signing up only photo agencies and less photographers? Will Digital Railroad become just another carrier for photo agencies, like all the portals out there? Where´s the difference?

Evan: Digital Railroad continues to be equally focused on providing unique workflow and distribution services to photographers and photo agencies around the world! We have tiered pricing for photographers, collectives and large agencies that relate to their customer needs. They all are equally important to our community, our business model, and to the buyers of photos worldwide. We have photographer and agency clients that are starting their archives with over a terabyte of images at launch and others who are slowly scaling up from their 20GB basic photographer membership. Cost per GB decreases as members upload more images. We have focused on a membership based pricing rather than adding many a la cart pricing that seem deceptively cheap in the beginning but on the whole usually become more expensive over time.

Andy: Digital Railroad started clearly with an emphasis on photographers and photo agencies working in photojournalism. But the number of potential customers is very limited in this business field. Using one of your expressions, what about new customers in "non-photojournalism verticals"? How is the proportion currently between editorial and stock images at Digital Railroad, and how do you think this proportion will change in the nearby future?

Evan: Yes, we did start with more Photojournalist photographers and agencies in the beginning because they need the most efficient workflow! Once we succeeded with minimizing at least 90% of repetitive production tasks for their high-speed to-market needs, we found that this same workflow is performing extremely well for all other photographers. Of course, there are specific needs for each type of photographer, and we have been developing new features specifically for Commercial, Royalty Free Stock, Rights Managed Stock and Celebrity photographers.

A year ago, our membership consisted of about 95% Photojournalists, and now we are roughly 60% Photojournalism and 40% Stock, Commercial, and Portraiture. We also have a growing number of Fine Art photographers joining the Digital Railroad community. We believe our membership will evolve to mimic the breakdown of the photography content verticals in the industry and this is what the global photo buyers will want.

Some examples of marquee non-photojournalism members that have joined recently:

• Celebrity: Vistalux

• Royalty Free: Blend Images

• Stock: Elisabeth Coelfen

• Animal Photography: Animal Affairs 

• Sports: NCAA Photos

Just last month we launched a new syndication feature that is very valuable for our Royalty-Free members; this feature can only be found at Digital Railroad. Royalty-Free members sell different sized images at specific prices, so members need to be able to automatically syndicate their images to sub-agencies in multiple sized resolutions.

This distribution used to be done by manually resizing images and then shipping hard-drives around the world to sub-agencies. Now these members can upload once, pre-set resizing dimensions and syndication destinations, and then one click delivers their images to as many destinations as desired via Digital Railroad’s bulk bandwidth, rather than through the member’s local office bandwidth.

Andy: One photographer recently wrote to me: "Entities like the Digital Railroad and Photoshelter do seem to offer some kind of solution, but I don't know if individual websites can offer the range of content required by time-pressured picture editors looking to fill their papers with pictures - especially when the trend seems to be subscription services, which take away the 'headache' of dealing with individual photographers or small agencies dealing in Rights Managed imagery."

What do you respond? Why choose Digital Railroad?

Evan: I would agree that individual websites on their own are not the ideal solution for picture editors desiring to look at a broad range of images and a number of photographers’ work. Individual archives work very well if a photographer has unique high-quality content, a brand name and a stable of regular clients to whom they actively market. However, I have heard from buyers that they often don’t remember to go to marquee photographer sites even though they love their work because those sites are frequently not easy to use, vary widely in functionality and frequently do not have high-resolution images ready for purchasing. They often just forget that those sites exist because they’re not on their lists of daily visited sites. Editors only have so much time in the day to randomly search online websites for images.

Buyers tell us that they want a consistent user interface with similar features, and they also understand that photographers want to customize their sites to match their brand identity. Several high-profile photo buyers recently told me that they receive random emails with links to ftp destinations, photo albums and online galleries, but they frequently feel like they are venturing into a scary black hole of random user interfaces and features that do not streamline their experience. However, these photo buyers said that they are happy to see Digital Railroad member lightbox urls arrive in their email inbox because they are already familiar with our user interface and have learned that we created a system that makes their jobs easier.

I agree that photo buyers want a wide range of relevant content, and that they will likely not be appropriately serviced at a random walled-garden photographer website unless it is part of a trusted platform. However, it is critical that any platform or community offering a wide range of content is of the highest quality or else it will dissuade buyers from coming back to search for images again. The sites where buyers find high-quality relevant results and that are simple to use will be the sites that they return to most often.

Even prior to the launch of Digital Railroad’s global search feature – buyers are telling us that they are pleased that they can sign in to any of our member archives with the same membername/password, save images from any member archive to their personal lightboxes that follows them from archive to archive, and share lightboxes with images from multiple archives to their creative team. Of course, members always controls who can download their images.

Subscription services are one of the recent business models that have received criticism in the industry, but it’s no different than the criticism that Rights Managed received from Assignment photographers when it first appeared. Actually, several Digital Railroad members are selling their images with a subscription model – they bill clients monthly and allow those clients to download a certain amount of high-resolution images per month. Of course, we also have members selling their images via the other major business models such as RM, RF, and Fine Art. Digital Railroad is a technology company, and we are focused on empowering our members with the tools to mange, market, and sell their photography however, whenever and to whomever they wish.

Andy: Digital Railroad announced earlier ("Digital Railroad Delivers Aggregated Photo Marketplace In Response To Member Demand", Oct. 18, 2005) plans for the Digital Railroad Marketplace. Your company has been criticized for this, because an announcement with the only content that new features will be arriving in the foreseeable future is somehow a borderline case of communication. Now it´s 2006. When will the new features such as "e-commerce" or the "search over all archives" arrive and how will they look?

In an earlier interview that I conducted back in July 2005 with Allen Murabayashi of PhotoShelter, he assumed "that Digital Railroad will develop a commission-based system", is he right or wrong?

Evan: We did announce that our Marketplace is in development, and we continue to refine this valuable feature to meet our member needs. We announced this feature prior to launching because many members and people interested in joining our community wanted features that helped buyers find their images. Virtually every month we launch new features that our members have requested and additional features are launching soon to help our members prepare their images for the upcoming Marketplace.

Since this announcement, we have also been very busy bringing on new team members who are industry veterans and tremendous assets in making sure that all of our features are deployed in the best interests of our photographer, agency and buyer members! Rome wasn’t built in a day, and we are developing a platform for the long term, not just a quick pop. Charles Mauzy, Lee Corkran, Paul Ryall, and Paul Melcher add another 75-plus years of photography and technology industry experience to our already-deep management team, and it’s the people that make a technology company successful, not the technology by itself.

Andy: Photographers like to highlight their own brand; they like to create their own label. At first sight, it seems to be an issue of less importance, but one of the main concerns of photographers I talked to is that Digital Railroad currently offers only few possibilities to photographers to customize the templates through their own logo or colours. When will Digital Railroad introduce additional homepage customizations?

Evan: Customization is very important to us, and there are several members that have created some very unique customized sites that tie seamlessly into their archives powered by Digital Railroad. Our member brands are extremely important to us even with our basic membership packages, and you only see mention of Digital Railroad when you sign in with your unique Digital Railroad membername.

Any member can add search boxes to their sites that result back to their archive, and unique images or selections of images from anywhere on the web can easily link back to their personally branded archives. For example:

• The Official NCAA Photos site links back to their archive via a search box and features links.

• 4See Photos (Portugal) has integrated their Digital Railroad archive via a homepage search and their features also link directly into their archive.

• VII Photo has created their own customized site, which connects to their archive via a homepage search box. They add image links to their archive when and if they wish. Clicking a ‘D’ link on the site sends trusted buyers to VII’s Digital Railroad-powered archive its downloadable, high-res version of the image they want.

• Photographer Tomas van Houtryve connected his personal webpage with RSS Photo Feeds from his archive, and the feeds automatically populate with new images from his archive.

• Jakarta-based JiwaFoto Agency has customized their homepage, and also done a very good job at customizing their regular bulletins with marketing links back to their archive (for details see this JiwaFoto newsletter).

• Several photographers have matched their personal site logos with their archives, such as Ramin Talaie, Jack Picone, Micah Walter and Matt Shonfeld.

Additional customization is in development, and several of our commercial/stock members are working on some very unique customization of their homepages that integrate with their current branding and marketing collateral.

Other services say that the brands of their members is of paramount importance, but I always find it odd that search results may return to pages that swap member identities with that of the service provider’s, or when search buttons highlight the service provider’s brand rather than maintaining the branding of the members.

Andy: Just like lots of other photo agencies and photographers, Digital Railroad uses PicScout´s image-rights tracking technology. The Stock Artists Alliance published initial results of their cooperation with PicScout last year in January 2005.

How successful is the PicScout service working for your company? Are "revenues" generated through PicScout split equally between the Digital Railroad photo sellers and PicScout, or does Digital Railroad also take a cut?

Evan: We are collaborating with PicScout to launch this product in the near future.

Andy: The latest hype in image software technology are the new affordable image push services for single professional photographers, like the ones offered by Thirdlight or ConfessMedia. Some experts believe that this may cause a major damage to photo portals. Images go straight from the camera of the photographer to the picture desk of photo buyers. The middleman is dead. From my point of view, this corresponds to the overall philosophy of Digital Railroad. Does your company intend to add an image push service to its offerings?

Evan: You are absolutely correct that we believe a buyer should have the choice of how they wish to find images, whether they want to search for images or have them delivered to their desktop via push features. We equally support a photographer’s right to chose how they provide buyers access to their work. Digital Railroad was the first in the photography industry to develop custom keyword-based photo feeds powered by RSS in February 2005. We were invited to present at the invitation-only technology conference called DEMO. Rick Smolan joined us on stage, and you can see the video here.

Variations on content push services have been around for a long time, from the Associated Press, PointCast, Eyetide Media, and there will be many more incarnations of this in the coming future.

Our future features are meant to help photographers, reps and agents distribute their imagery to buyers, not get rid of the middleman. We do not believe that the middleman is dead, because many aspects of our business rely heavily on agencies providing quality services to buyers around the world.

It is worth noting that one of the primary applications of our services today is supporting photographers feeding new image sets to their existing agency networks, in addition to enabling their direct sales to personal clients.

Andy: With the "search over all archives" feature arriving soon, how many images, editorial and stock, overall does Digital Railroad currently offer? How many images do the photosellers, photographers and photo agencies, sell through Digital Railroad at an average per month? How many photo buyers are currently registered at Digital Railroad, how active are they really and what about their business segmentation, also geographically?

Evan: We presently have 2 million digital images in our network today, and this number is growing every day. The content is diverse across our 40-plus country member locations and across content verticals. As we all know, photographers usually make pictures across more than one category, so each one of our members usually offers images for sale across a multitude of content verticals.

The specifics of photo sales are confidential to our members, but we can share that most are more than covering their annual fees for Digital Railroad, and this doesn’t include the savings gained from minimizing their production and distribution costs every month. Just uploading images into an online archive is not going to automatically generate sales, but our members are saying that our marketing/distribution features are allowing them to focus more on shooting than slaving in front of their computers.

Andy: Adobe is always good for a quick surprise. The company recently announced a partnership with MorePhotos.com and Iron Mountain, creating a new source of support for the business management of professional photographers, for uploading, storing, protecting, proofing and selling images.

Regarding future stock photographers as new Digital Railroad customers, do you think that this new partnership might develop in the long run into a severe threat to Digital Railroad?

Evan: It will be interesting to see exactly what Adobe launches with their new partners. I believe that they are going to be very busy balancing many new initiatives across their company since their merger with Macromedia. The photography industry has been exciting for the last 15 years, and it will continue to be exciting in the years to come.

Only time will tell who will be threats to Digital Railroad and who Digital Railroad will threaten. To the extent that the photography and photo-buying communities benefit from competition in the marketplace, this is all for the better from our point of view. Giving control back to photographers, agencies and buyers is the goal of our company, and we are having a ton of fun delivering our promise.

Related:

• My first story on Digital Railroad: [Update] Digital Railroad: A New Hub For The Professional Photographer To Organize And Sell His Work (August 14, 2004)
• The Snowball Effect: Digital Railroad Gets $5.2 Million Venture Capital (June 14, 2005)

Tags: Evan Nisselson; Digital Railroad

Comments

[StockXpert]

"We presently have 2 million digital images in our network today"

How many of those 2 million really belong to Grazia Neri?

Less than 1 million?

I assume of course more than 1 million.

[Evan Nisselson]

Hello StockXpert,

Actually much less than 1 million is correct.

There are also marquee photographers that will soon upload roughly a hundred thousand images each so it's not just the agencies who plan to upload large archives.