Flickr’s recent announcement that it will offer licensing tools to its user base should come as no surprise to the readers to Kaptur. We predicted such a move a while back. At a time when more and more photo tech companies are putting their content for licensing, from 500px to EyeEm , Flickr, the grandfather of them all, had to react. However, having a large pool of images ( over 6 billion images) is not enough to break-in the photo licensing world .
To be successful, Flickr will have to overcome a few barriers of entry :
- Confirming copyright ownership: A lot of the images found on Flickr have been “borrowed” from other photographers found on the web and credited to the uploader. Currently, there are no verification system in place besides a basic DMCA protocol which relies on the original owners of the images to file in a claim with the company. Obviously, all images offered for licensing will have to have proven ownership if they want to avoid painful and cash draining copyright infringement lawsuits.
- Model / Property release : While not an issue for images used in editorial ( news stories), it is a nightmare for those used in a commercial environment ( ads, marketing, anything linked to selling a product or service). Without a signed authorisation from the people appearing in the photograph, an image cannot be used in a commercial context without the risk of a lawsuit. Same goes for landmark or private buildings ( a partial list here) and some designer furniture. Since Flickr has never had this policy in place ( not necessary for a photo sharing platform), if it wants to offer images to the commercial market ( the most lucrative), it will need to ask all creator of content for signed agreements and keep those on file. Not a small undertaking.
- Going from free to paying: A lot of the success of Flickr has been on the fact that the images were free to use. Common business knowledge states that the transition from a free product to a paying one is extremely hard. Customers do not understand why they should pay for something that they used to get for free, even if the fee is very small. To them, unless if you add value, there is no clear justification. While it is not an impossible task, since Flickr seems to be building a specially curated selection of images, it will not be easily accepted by all current users ( as in those downloading images).
- Control: How does Flickr monitor rightful usage ? When you license an image for a fee, you always put some restrictions on its usage. In the rights managed model, those restriction are very specific: Length of time, placement, size, territory. Companies like Getty Images have procedure in place to monitor these restrictions and fees are applied in cases of breach. In the royalty free model, favored by companies like Shutterstock, the rights are much broader but restrictions still exist. Like no links to pornography or usage limited to a maximum of copies (in case of collaterals, for example). Does Flickr plan to monitor excessive /illegal usage of its licensed content or will it leave this role to its contributor base and act upon their reporting ? Either way, a new structure has to be put in place.
- Commissions: Where to put the right balance ? We have seen it over and over again. If Flickr plans to go on a revenue share model with its photographer, it will need to find the right balance between its own profitability and its users acceptance. Companies like 500px have learned the hard way that asking too much can create a huge backlash and could lead to massive defection. Asking too little and there is no profit, turning the project into cash draining business.
- Awful non-standardized search: Because keyword/tags are entered ( or not) by Flickr users, a search can quickly turn into what seems as randomized results. Flickr photographers are not keen in putting a lot of metadata information with their images, making its search engine results extremely poor. Flickr’s competitor in the photo licensing world, Getty, Shutterstock, Alamy have poured millions of dollars into getting their search results as precise as possible, mostly by using standardized keyword tree. Flickr has none of that. Yahoo’s recent acquisition of IQ Engine and Lookflow will certainly help in quickly ( and effectively) close the gap.
But not everything, as it might seem, is a barrier for Flickr. It has two very strong attributes that none of its competitor have. First and foremost, it has a very strong brand. Everyone knows what Flickr is. While traffic numbers are not published ( between 80 to 100 million/month), they are 10 x above any of its potential competitors. While visits are no guarantee of sales, the potential is certainly present.
The second strong attribute is the depth of the collection. With more than 6 billion images already available ( granted, not all will be available under this model), Flickr offers a huge potential of in-depth visuals that could pleased the most hard-core photo editor. Furthermore, those pictures have much less of this blend stocky feel found in professional databases and are much closer in authenticity to the current star, Instagram. That is a very powerful advantage at a time where brands and advertisers are seeking to get closer to consumers by using images taken by consumers .
Interestingly, to use a Flickr term, the investment world seems unphased by this announcement, partly because the details are not yet known. Shutterstock’s stock has not registered any signs of concerns and instead has been on the uprise. Yahoo’s stock, as well, seemed to have ignored the news. It could also be that a lot of investors/market watchers have lost faith in Yahoo’s ability to innovate with impact. Flickr, after all, has been dormant for so long and missed so many great opportunities that this could only just be a nervous reaction of a dying body.
On clue could be that, besides a few image curators, Flickr does not seemed to have hired any top executives with experience in this field. Either they feel that being photo passionate is good enough to succeed in the photo licensing world ( they wouldn’t the first to make that mistake) or their just not that much into making this project succeed. It is just a question of time before we will know. In the mean time, it is certainly something we will be watching closely.
Author: Paul Melcher
Paul Melcher is the founder of Kaptur and Managing Director of Melcher System, a consultancy for visual technology firms. He is an entrepreneur, advisor, and consultant with a rich background in visual tech, content licensing, business strategy, and technology with more than 20 years experience in developing world-renowned photo-based companies with already two successful exits.