I recently ran into a great new application called cooliris (funded by Kleiner Perkins) from a similar named company in Palo Alto. But much more than just a cool application cooliris is the pre-cursor to a new way of accessing the internet, if the company plays its cards right.

I ran into cooliris when it first launched because of its initial focus on photography, and since then the company continued to dramatically improve its scope and has quickly become an appealing application to get news presented visually.

Stronger put, I predict that in 5 years from now the browser (like Safari, Firefox, Chrome, Internet Explorer) will not be the predominant way we access the internet. But that perhaps is an easy prediction. The majority of applications on an iPhone already use non-browser access (Facebook, Plaxo, eBay etc) and so do a few others on the PC (such as iTunes).

The browser is a very technological way of accessing data on the Internet, with poor navigational attributes. The URL language is certainly not one everyone understands and that relegates the dependency on search, which is still the primary way to navigate the Internet. And as the internet continues to grow in size, search will yield ever diminishing navigational success.

Clearly more companies are looking to improve Internet navigation. AT&T’s new Pogo browser, Google Chrome and enhancements to Firefox are an indication of the awareness of the pain. We will see more examples of improved navigational capabilities, some of which I can’t divulge at this point. But until then - enjoy cooliris.

Tags: FaceBook, Firefox, Browser, EBay, AT&T, Google

I was flattered last week by a visit from Rick Smolan, the creator of some very creative photo-projects, such as From Alice to Ocean, America 24/7, Blue Planet Run and his latest America At Home. Since the early 90s, From Alice to Ocean stuck with me when it was first introduced and distributed with Apple computers and the clever use of multimedia capabilities built into the Mac early on. But the great thing about these projects is not just the stunning imagery but rather what they evoke. Again, the value of photography is in the eye of the beholder.

Rick approaches photography in the same way I look at business; by simply surfacing the facts. So much in our lives is influenced by mountains of politics and rhetoric that reduce the chance of quick resolution and success. How do you think we can ensure a vibrant global economy and peace if 1.1 Billion people - 1 in every 6 - worldwide have no access to clean water. The book Blue Planet Run displays that with chilling accuracy.

But Rick Smolans projects shed light on reality, good and bad. America at Home is a compelling compilation of how American families live at home, rich and poor, photographed by the families themselves and complemented by photographs from professional photographers. The pictures and their captions are so inspiring that a country decided to buy more than 200,000 books to educate their children on who Americans really are. Transparency works both ways.

I would like to see Rick do a book of “The World at Home”, so I can continue to sit down with my daughter and give her a peek into the living rooms across the world.

Our welfare greatly depends on our ability to become a citizen of this world. To achieve that every school should at least purchase one of Ricks books so our children receive an objective view of the opportunities and problems in our global eco-system and thrive.

Update: For readers of my blog, Rick has graciously offered a discount of $10 off his book America At Home, which you can customize with your own image on the cover. Just enter the code GEORGES at checkout.

Tags: Photography, Mac, Photographers, Apple, Economy, Transparency

Jupiter-Images finally sold to Getty-Images after a similar attempt in February of 2007. With estimated revenues of around $79M (when last tracked) and con-jointed debt of $95M with other Jupiter Media properties, Jupiter-Images sold to Getty-Images for only $96M in cash. Sounds like a fire-sale to me.

Imaging super stores make no economic sense, as described in this blog before.

1/ Images are like art. Taking preferences of buyer and seller into account, they preferably sell only once (or as few times as possible). No buyer wants that image to appear in similar publications and so every transaction is unique. Super-stores, however, are modeled to provide one-to-many sales transactions and are therefor NOT suited to support the image exchange marketplace.

2/ Except when images are produced on a commissioned photography basis (for example by Getty-Images staff photographers), the image super store actually does not own the image, it merely has a right to operate as a reseller. Nothing would stop a photographer from trading his images somewhere else, dramatically deflating the value of the super-store.

Fact remains that $22B of images are exchanged every year, most of it (90%) not through online transactions or the sum of all super-stores. This represents a big opportunity not many Venture Capitalists understand, as it is a market-play rather than a pure technology-play. But established companies may be able to build an iTunes of images to feed their ecosystem of products.

In the meantime, Getty-Images (now private again) keeps on puffing itself up like a puffer-fish. The question is: how long will it be able to hold its breath.

Tags: Photography, Getty-Images, VC, ITunes, Jupiter-images, Revenues, Private Equity

Apparently Digital Railroad, another storage provider of the digital photography market is in trouble. No surprise again, because the company never supported a free-market model for photographers and buyers. We blogged about that topic many times, and recently Dan Heller adds to that fundamental thinking (even though I remain in disagreement with the artificial classification of stock photography).

Since its founding, Digital Railroad primarily supported supply-side photographic capabilities, which if not seamlessly connected to the buy-side provides really nothing more than storage space and website make-up for photographers. A nice service, but similar services from Smugmug or Photobucket already exist to do just that. All these technologies fail to solve the most pressing issue for every commercial photographer: sell, sell, sell.

Photographers are not empowered by a storage service or nice looking web pages, they are empowered when they sell. Photography is an expensive job and if it does not yield $70,000 in yearly revenues (based on 2006 PDA numbers), you will not be able to make a living from it. We have yet to find a true marketplace that connects any seller with any buyer, using free-market principles that truly empowers photographers.

Free-markets are more than a fashion statement or a label you suddenly slap on the website. The implications of free-market principles (as listed in this blog) change a company, its execution and its funding strategy to the core. The devil is in the detail.

Digital Railroad’s and Photoshelter’s demise are examples of why investing in technology, without macro-economic impact - no longer works. The 150-year old photography marketplace, with the introduction of digital photography and the internet, has moved from a premium market model (with many walled gardens) to a free-market model.

Akin to Ratatouille (the movie), where a five-star chef, Anton Gusteau, declares that “Anyone Can Cook”, the photography market and its technology providers need to get used to the fact that in this new age, “rats” will take and purchase great photographs ($22B of them).

The irate response to my recent blog about Photoshelter from a Vice President of the American Society of Media Photographers reminded me of the angry cook in Ratatouille that hires Linguini, a clumsy youth hired as a garbage boy, who can still not accept that great taste in food is like the beauty of photography - in the eye of the buyer.

We should embrace all photography that move people to buy, regardless of who shot it and build a real marketplace to facilitate that exchange.

Tags: Photography, Consumer, Content, Marketplace

I still edit all my photographs (thousands) in LightZone, and have always vehemently made statements against Adobe Photoshop. Not because of the lack of photographic capabilities but primarily because of the proprietary language it forces you to understand before you can use Photoshop effectively.

Photoshop remains the “vi”- editor of photo editing, powerful yet very cumbersome to use. No secretary uses “vi” today, and the future of Photoshop is moving further and further away from the mass market Adobe should be trying to attract. Nothing new there.

But Photoshop CS4, after a long track record of rather meaningless innovation and UI revamps now includes some very nifty innovations worth looking at, as the videos demonstrate. Content aware scaling (from a company Adobe acquired last year), panoramas and the new 3D capabilities are very cool. So, if you’re interested in rudimentary 3D capabilities before you jump into Maya, check out Adobe’s website where the nifty new capabilities of Adobe’s Photoshop Extended are available for roughly $1,000. But, perhaps this time around, the premium price is worth it.

Credit where credit is due.

Tags: Photography, Photoshop, LightZone, Maya, Photographers, Adobe

Two days ago we got word about the demise of the Photoshelter collection marketplace. Not surprising because Photoshelter was not a marketplace. Technologists have a tendency to slap the marketplace label on anything they build, without understanding what it truly means.

Marketplace models, criteria, funding and execution are fundamentally different from premium market models. Photoshelter was really nothing more than a replica of Getty Images without Getty’s money to buy inorganic growth.

Here is how Photoshelter failed to meet marketplace rules:

Marketplace violation 1: Photoshelter artificially arbitrated supply, through a lengthy subjective signup process in which Photoshelter arbitrators determine whether you get to play.

Marketplace violation 2: Photoshelter artificially arbitrated demand, as it aimed to sell it to “the industry’s top buyers”, not to everyone.

Marketplace violation 3: Photoshelter gave preference to images they liked, rather than simply connecting any supply with any demand.

Marketplace violation 4: Photoshelter deployed a sales-force (from Getty and other photo agencies) that promoted a premium market model, like any sales-force driven by quotas would.

But CEO Allen Murabayashi makes a few damaging statements in his blog on why they failed and tries to blame that on the market as a whole:

“Licensing photography is fraught with clearance issues”
150 Years of photography exchange has resolved the fundamental issues of rights management quite effectively. Getty-Images, Corbis and others have gone through a well defined process in order to clear rights in their move from analog to digital exchange. Photoshelter has relied too much on a model that requires people intervention, while the majority of rights and enforcement can be embedded in and enforced by technology and made the responsibility of the asset owner. In the same way eBay sellers are responsible for the fulfillment of transactions. That enforcement guarded by a true meritocracy will quickly weed out bad behavior (that plagues any marketplace).

“Stock photography is a slow growing market dominated by a single player”
Nonsense, the term stock photography is an artificial classification (made up by its current participants) that bares no value. Today $22B of photography is exchanged of which less than 10% is transacted electronically. Growth through the premium market model of Photoshelter is limited because the photography market requires a free-market.

“Research Requests move too quickly for individuals to react in a timely fashion”
Perhaps they do in the “top buyer” segment, but certainly not in all. Since Photoshelter artificially limited the demand characteristics, any assessment of market traction and behavior should be taken with a grain of salt.

“Buyers desire more diversity, but convenience (aka subscription deals) triumphs this desire”
Absolutely, buyers deserve diversity, and buyers should be presented with the ultimate experience (subscriptions are not the answer). What has fundamentally changed in a 150 year old analog photography market is that demand does not come from a few buyers, but a highly fragmented buyer market that will want to use an image for any purpose (not just for your average advertising purposes).

“A crowd-source model for stock will likely never work”
Absolutely disagree. Photoshelter deployed a premium market model on a market that requires free-market principles. It failed for the same reason Getty Images fails to become a market-leader in the un-arbitrated exchange of digital photography (identified by roughly 30% market ownership). Getty Images grew by inorganic growth and acquiring other photo agencies with staff photographers that create the majority of images it sells (less than 7% come out of third party supply according to a statement by its CEO in 2006).

Photoshelter, as lovers of photography, seemed to have their hearts in the right place but not their execution. And they neglected to respond to our offer for help one year ago, when we saw their demise coming.

Tags: Photographers, Photography, Getty-Images, Growth, Free-market, Marketplace

Let’s look at photography (my hobby), arguably the most important purchasing-driver of computers (after the ability to access the internet) by consumers. Media management (yes, on the desktop) remains more than a Billion dollar market opportunity.

Case in point: new announcements of Adobe Lightroom and Apple Aperture tout enhanced interoperability with third party plugins to manage and edit your photographs. Don’t you feel good about that warm open-source-like karma of interoperability?

I don’t. Both vendors have deployed their next trick to customer imprisonment. And plenty of uninformed customers will fall for it. Here is why you shouldn’t:

1/ There is no need for an additional platform for photo management.
Photo editing capabilites of both applications are mediocre (no layer based editing, no advanced local editing etc.) and their asset management capabilities are little more than a replica of file system capabilities (even photographic attributes such as exposure, aperture and other attributes are maintained by the file-system metadata today). So, except for making nice photo albums and calendars, why else would you slug thousands of photographs in a proprietary asset management format that is less reliable than the underlying file-system and requires seperate backup and archiving strategies to maintain.

2/ Plugins have worked for years on file-system based photographs.
The announcement of the interoperability with plugins is really old news as those third party applications have been working with file-system based photographs for years. This is a platform on top of a platform, designed to milk more money out of customers and locks them into a proprietary technology stack. A prison with the windows open is still a prison.

3/ The operating system needs-to and will evolve faster.
The pace of meaningful innovation of the Personal Computer OS is deplorable. Microsoft has not made the PC operating system significantly smarter over the last ten years and that has opened the window of opportunity for Apple to surpass Microsoft in usability (rather than functionality). The ability to easily create and manage user-generated content such as, Photography and Video, has now become important adoption drivers to the platform, OS-vendors have yet to respond to. Photographic capabilities should be built-in (not priced-on). These days the unique media experience of the platform is the differentiation that sells the computer (since they all do internet quite well).

As a consumer, buying into seperate photography management siloes will cost you significant time and money (as the former CEO of a photo software company, researching the alternatives, I tried). My advice is to wait until an agile vendor steps up and turns media management into a core competency of the computing experience.

In the words of Ray Lane (partner at KPCB and former COO of Oracle) who once said customers are better off skipping some steps of innovation (in his case to skip client-server for three-tier internet architecture), I have just presented you with my reasoning to skip-over Adobe Lightroom and Apple Aperture. Not because I don’t like some of its functionality, but because it is strategically a dead-end street.

The next evolution of media management will soon eradicate the old one and deliver lasting differentiation to the vendor that owns it and provides a much, much better media experience to the consumer.

I am planning on having something to do with that.

Tags: Platform, Photography, Consumer, OS X, Operating System, Innovation, Integrity, Adobe, Microsoft, Apple

Photography is a fantastic craft to which now, with the introduction of digital photography, many more people have access. Great photography relies on an ecosystem of factors (technical: shutter-speed, exposure, aperture, depth of field, ISO etc. and non-technical) to turn a simple scene into a compelling vision. Just like in business.

The similarities between photography and business are remarkable:

1/ The Art of Seeing
Great photography starts with an ability to see in the same way great innovation starts with an ability to imagine. Spotting a scene and finding extraordinary simplicity in detail is what lays the foundation for a great photograph and business. More so than the ability to master the camera, time is of the essence. Shoot it - now - with whatever camera, as that scene may never come back. So do the great opportunities in business. Carpe diem.

2/ Establish Focus
Every photograph needs a clear focal point, just like a business. One, and not more than one. But focus is not always obvious and in the middle of the viewfinder. Focus in photography and business is achieved through experience of knowing what that focus yields. In business that defines how you are percieved by your customers. As a photographer, you determine where the focus is and set the right angle. As a CEO you establish the focus and direction.

3/ Set a Composition
Composition determines what you see beyond the focal point. Other objects in the viewfinder compete for attention with your focal point, but a great composition takes your eye on a journey to the focal point and strengthens its attraction. Lines, shapes, curves and contrast establish focal point supremacy. In the same way competition in business strengthens (not weakens) the unique appeal of your business.

4/ Evaluate Exposure
Exposure determines how much light you let in. Too much or too little light washes out great detail. Too much or too little exposure undervalues or overvalues the company, either one turns off customers. Use exposure to enhance great value, not to displace it. Use public relations and marketing wisely. So, locate the real business value before you expose it. Exposures can usually be fixed afterwards.

5/ Measure Depth-of-Field
Depth-of-field establishes what is in the foreground and what is not. What is important and what is less important. In business, razorsharp focus is required to establish a solid bottom-line. But a business without “depth-of-field” is a one trick pony. A great bokeh (a photography term for the background pattern established by an f-stop) determines its longevity and - ultimately - sustainability.

6/ Know Technology
Technology is becoming more relevant in photography and similar is the impact in the business world. Technology determines how the end product can be shared and organically find its massive appeal. Now, through the internet, great photographs and great businesses will find a new audience that was previously unreachable. New, more free, markets are opened up and new opportunities arise.

For me personally, photography is a way to relax, but in actuality it is an extension of what I do in business every day. I am always looking for unique moments in time, taking great pictures and building great businesses, that perhaps - others don’t see.

Tags: Photography, Markets, Free-market, Eco-systems, CEO, Marketing, Experience

While there may be some value left in Getty-Images, remodeling an "old-house" in this case appears to be much more expensive than building a new one. We just completed a formal business plan to build a real photography marketplace for less than $5M first round (est. $13M total, less than 1 fiscal quarter of Getty's capital expenditures, to shed light on Getty's inefficient business model).

The "body" of the Total Addressable Market is $22B / year, ignoring the size of the Long Tail of photography Getty-Images has no penetration in, we will. So, a $13M investment would yield $600M in annual revenues based on 30% market-share (even if we were to cover "the body" only). A darn good business, and best of all, it will help great new photographers get "free" and transparent access to buyers. So good karma too. The walled gardens of the imaging marketplace will be torn down. Call or e-mail me if you want to play.

Tags: Getty-Images, Growth, ASP, Wall-Street, Content, Organic growth, Investment Banks, Images

Apple has just released Aperture 2.0 today. A nice product to manage your photographs has gotten even nicer. But -- there should not be a need for Aperture.

Digital asset management, which is the predominant function of applications like Aperture and Adobe Lightroom, should not need to exist, especially not if you are Apple. If Steve Jobs were to take his own media hub strategy serious, advanced asset management capabilities should be available right in the file-system, as a function of the OS. Asset management for photographs is why people buy computers today, so why still does a separate application need to deal with our most precious assets. Incremental revenues perhaps?

Today's proprietary photo management systems eat disk space like nothing else. Non-destructive editing is supported by making superfluous copies of originals (especially when using an external editor). The derivatives are usually many times larger in size than their originals (especially when stored in TIFF or PSD), which forces you to stock up on hard disk space. I will keep using LightZone as my main photo editor and save precious disk space by leaving my photographs right where they are. Can't wait till the operating system innovates and supports photographs natively.

Tags: Getty-Images, Free-market, Funds, Photography, Long Tail, Marketplace, Markets, Revenues

Getty-Images appears to be having trouble getting sold for $1.5B according to an article in The New York Times today. Perhaps the 40+ investment banks on Wall street and an equal amount of large private companies that visited our website really took our Puffer Fish analogy to heart.

So what could be done with Getty-Images? The problem with finding an acquisition partner is Getty-Images' hybrid business model. For a technology acquirer the services business with staff photographers is a burden they will not want to swallow. On the flip side, very few other services companies than perhaps the Associated Press can find solace in the photographer factory that is an integral part of Getty-Images.

1/ Buy company at a decent value
2/ Separate content producer business from content distribution
3/ Privatize each
4/ Sell content production business
5/ Revamp content distribution

ad 1/ To establish a fair price I am eager to see the operating plan metrics separating content production from content distribution in order to find out to what extend both lines of businesses have suffered from being under one roof (there may be some opportunity hidden in there)

ad 2/ Content production is a business model that, in today's world, needs to be separated from distribution. With the internet in place as the conduit for distribution, very few company can still afford to compete with the content produced by a "free-market". There is some remaining value left in the production of "premium" content for a "premium" audience, in the same way the Associated Press is able to provide this service to a confederation or co-op of newspapers.

ad 3/ Build companies that focus on what they do best, one produces content - one distributes it. Not within a single company or P&L or board. Each with its own growth trajectory.

ad 4/ Just like in the "premium" production of news articles (where bloggers compete), the news media will require a "premium" production of editorial photographs that has some trust associated with it. Perhaps a deal can be struck with AP - or a new version of AP can be created with identical goals. Getty-Images already has established a large installed base of agencies who can lease resources on a subscription basis.

ad 5/ Long term, content distribution is where the money is. The Long Tail of photography is massive, much larger in total image exchange than any Super-Store will ever be. Thanks to the Internet. But to build an effective free-market, a core of premium supply is needed to create its initial pull, Getty-Images certainly has that. To make this new company a winner though, it needs to truly support free-market principles, something very few companies can pull off.

We'd be happy to assist in the assessment of the Getty-Images acquisition value along the lines of the aforementioned strategy and even more in the post-acquisition execution. Our passion for photography, the ever increasing reach of the internet, and the value produced by all photographers around the world creates a fantastic new opportunity.

Tags: Adobe, Photography, LightZone, Aperture, OS X, Asset Management

So, if you've read my blogs on the imaging market here .... why would you plunk down $1.5B to acquire an Image Super Store like Getty-Images (alias Getty).

Consider this:
1/ Non-agency images are always owned by photographers not by Getty
2/ Getty's assets can vaporize quickly, photographers can switch their assets to a better marketplace instantly
3/ The vast majority of images in the world are not transacted through Getty
4/ Getty qualifies premium photographers not premium images
5/ Getty needs to cannibalize its business model in order to meet the Long Tail market requirements
6/ Getty is diluting focus to higher margin media like film and music, fat chance
7/ Getty has the expensive overhead of an agency, with declining image ASPs
8/ Hundreds of new and competing sites indicate Getty's non-supremacy

There is value in Getty-Images, as an agency or as an image store, but I would not put two diametrically opposing business models on the same P&L. Neither one is worth $1.5B. The imaging Puffer Fish is about to deflate.

Tags: Getty-Images, Wall-Street, Investment Banks, Associated Press, puffer fish, Hybrid, Business Model, Content, Premium, Bloggers, Free-market, Super-Store, Long Tail

The Puffer Fish of the imaging market, as described in my previous blog have large volumes of fleeting image assets. Yes, dear Wall-street analyst, they may have been experiencing double-digit growth temporarily but we believe that originates from non-organic growth and growth attributable to the incorporation of that non-organic supply into the global brand, in Getty-Images' case for example. If you keep buying stock photography companies you delight existing buyers with an ever increasing supply, but the novelty of that supply wears off real fast. In the end that apparent growth comes at a high cost. So witnessed by the most recent disappointing earnings reports.



Jupiter-images is literally pursueing an image super-store strategy, a copy of Getty-Images' strategy. They too have been buying stock companies. Stock companies strike deals with photographers to create a good looking selection. Yet most images have a value that is completely photographer agnostic. The value is in the photograph, not the photographer. So, a super-store of images by definition contains a small amount of sellable images.

But the real interesting fact about the imaging industry (and many related to it) is that all images have fleeting value, especially after they have been sold for the first time. Photography is the ultimate Long Tail market, with a very, very long tail and a tiny body. A great reason why any player with a "premium" imaging strategy is relegated to selling to very small and concentrated set of buyers.

Not unlike the music industry where we are used to buying music collections on CDs, a large part of the stock photography market still sells collections of photographs to artificially increase the number of images sold and the average sales price (ASP) per image. As a result, investors may think the ASP is somewhat stable and predictable and the value of the super-store may not be as grim as it seems. But Super-stores will never contain enough image variations to meet Long Tail demand. As a result, commissioned photography is still going strong.

Most photographers that produce sellable images still sell their images offline and commissioned. The ones that do sell online, literally use a total of hundreds of photo-sites today to tap into a Long Tail demand. All these factors are hardly evidence that Getty Images is indeed meeting the needs of the photography market.

On a side note: MacNN reported this week that Adobe has halted its stock photo library, perhaps it is getting ready to buy Getty-Images? I think they are smarter than that.

Tags: Getty-Images, Super-Store, ASP, Agency, Images, Photographers, Media, Margin

I have recieved a lot of inquiries from Wall-street personalities and companies due to the gracious blog posting in PE Week Wire on the imaging marketplace, so I wanted to dive deeper to clarify beyond just the financials.

1/ Getty-Images does not clearly distinguish between total addressable market and "market", probably to puff itself up as the owner of the imaging marketplace. More than 50% of (traceable corporate) images produced (by about 17,000 commercial Photography companies in the US) are generated by suppliers making less than $5M in revenues and have less than 10 employees. Very few of those (less than 1%) use Getty-Images as their distribution channel. In fact the majority of images sold in the world are traded offline, yes, offline (Getty-Images started its online presence in 2000, after going public on NASDAQ in July of 1996 and re-listing on NYSE in 1998). In addition, the peer-to-peer exchange of digital images, we estimate, is at least twice the size of the traceable exchange. It is quite irrelevant if Getty-Images is performing better than its peers, but Getty-Images by no means owns more than 10% of the addressable market. The risk for Getty is that a new kid on the block will be more successful in emptying out the market with a new business model, rather than outperform the existing players.

2/ Getty-Images is not a marketplace, it is a Super-Store in the economic sense of those definitions. A large part of the images in their store are produced by their own photographers (organic and non-organic) and sold to their existing, primarily agency customers. But the real definition of a "free-market" marketplace is that customer own their product which they sell, un-arbitrated and completely transparent, to buyers. Getty-Images charges exorbitant commissions (known to be in the range of 60%), which can't hardly be considered a marketplace transaction fee. It is suggested on the internet that Getty-Images plays unfair, even include changing photographs and forcing the original photographers to hand Getty-Images an additional 100% of the delta. True or not, that is not the kind of trust that makes anyone believe that Getty-Images will become a true marketplace.

3/ The photo acronyms are meaningless. Stock photography does not exist. It is an artificial definition, used mostly to identify a low priced photograph. But a "stock" photograph can be sold rights-managed, royalty free or exclusive and