iStockPhoto Creating a New Market for ‘MicroStock’ – Background IStockPhoto. com was established by Bruce Livingstone in 2000. Bruce had a dream of becoming a professional photographer and with over seven thousand photography images in his personal collection at the time it was difficult if not impossible to reach all the agencies to show what he is capable of. Instead of sending out his images he decided to share them on a website which allowed everyone to download them. With over several thousand quality photographs a business model was born.
At the time the term “microstock” was nonexistent and in order to buy quality photography one had to pay a lot of money or hire a professional photographer. Companies, small businesses, professionals had followed this model up to the point where they were spending a lot of money and it was getting very expensive and costly to create art. Bruce’s intensions were not to establish a new market for this kind of thing, it was just a way to publish his portfolio and share with the community.
Explosion of MicroStock Market – Evolution of Business Strategy “iStockPhoto established the market for “microstock” photography by providing high quality stock photos at extremely low price points. iStockPhoto’s innovation was offering all its photo licenses royalty-free, available via easy download over the Internet”.  By providing various types of photography for free the community iStockPhoto had revolutionized photography and art on a global scale. Instead of paying for professional photography iStockPhoto provided individuals with the ability to download theirs for free.
As the community and popularity of the concept grew in scale so did the website costs. “Hosting and bandwidth fees for the site grew proportionally, forcing a decision upon Bruce as to how to pay for bills approaching $10,000 per month. ” . The fast growing popular microstock distributing company then decided to switch gears a bit and charge fees which would keep them up and running. At that time IStockPhoto had not thought about how to make money but just to keep its popularity and recognition still growing. The trend of microstock was very popular at the time and was still in discovery and growth phases.
From the launch of the website the company was a non-profit organization yet that all changed in 2004, “when iStockphoto officially became a for-profit entity. At that point iStockphoto charged 1, 2, or 3 “credits” (priced at $0. 50 per credit) for photos of different sizes, offering a 20% commission to the contributing photographer. ”  The company had started to charge for their stock photography and came up with the credit system. Furthermore, additional improvements had taken place such as community sites, contributors lodge, forums and online contribution matches.
In addition, iStockPhoto had initiated a contribution system, as to where anyone is able to contribute and make money. “In 2006, iStockphoto expects to sell 10 to 12 million photo licenses from this library, at prices ranging from $1 up to $40 per image. iStockphoto’s success opened up a new market segment for stock photography, catering to customers who could not afford traditional, high cost stock photos from the likes of Getty Images and Corbis. ” . IStockPhoto and Getty Images “Getty Images announced it has bought iStockPhoto” .
The merger took place in 2006 because of how iStockPhoto had been growing in size and popularity. Getty images had acquired iStockPhoto for $50 million dollars. “We took a look at where we wanted to go and found Getty Images singularly capable of helping us get there,” said Bruce Livingstone, iStockPhoto founder, CEO and president. “ From the standpoint of iStockPhoto the merger was successful and beneficial. Getty Images main business model is serving photography, footage and other digital content World Wide.
Their main focus and goal is to deliver their content across the globe, thus making a merger a success. “Getty Images is the largest visual content provider distributing over 60 million still images and more than 30,000 hours of footage worldwide. “ The Fight Begins – iStockPhoto vs. Competitors Since 2006 microstock online business model had exploded and taken advantage of. iStockPhoto had its tremendous success due to the fact it was free and royalty free, nevertheless as time progressed others had begun to exploit this market.
Today, iStockPhoto faces tremendous rivals such as: “Fotolia, Dreamstime and Shutterstuck which gain popularity and pose a great deal of threat” . In the past years iStockPhoto was always evolving its business model focusing on photography then adding additional services as sound, vector art and footage. In recent years they have undergone website redesign changes to utilize best usability practices based on a survey from their community. Recently iStockPhoto, “LP appoints Nick King as Vice president,
International who’s main concern is reaching new customers and markets around the globe” . Furthermore, “iStockphoto LP has untethered its community with the delivery of an iPhone application that allows users to browse iStock’s vast library of photos, illustrations and audio files from an Apple iPhone or iPod Touch”,” iStockphoto announced the immediate availability of a new plug-in that puts more than six million photos and illustrations at the fingertips of Microsoft Office users.
It allows users to access iStockphoto images from within PowerPoint and Word, where they can select, preview, purchase and insert images directly into their documents. iStockphoto has been a valued image provider on the Microsoft Office web site for several years. ” . Overall, business goal and strategy iStockPhoto is constantly changing adapting to current technology and trends to gain the upper hand. When Bruce had first started out the website was word of mouth, meetings, e-mail and the website was to serve him as his portfolio.
Now as the site is under attack with competitors fighting for the number one spot iStockPhoto adjusts their marketing and IT infrastructure to accommodate the growing market as well as stay alive. What future has in-store for iStockPhoto? Microstock has grown rapidly and quickly over the past ten years, yet what we see now is a business model that many agencies had taken advantage of. Since iStockPhoto is an online company they will need to have and keep and edge over the competition. As they have adopted over the past ten years I would argue they will do the same adjusting their IT and Business structures with time.
Furthermore, from my observations the company has incredible strict guidelines in submitting new contributors as well as low acceptance rate of photography, which might take away from their contributors market but gain costumer market. In addition, quality of their microstock is very important to the company now more than previously. Overall the business model of iStockPhoto is very strong and adapts shifting their focus in new business strategies that keep them on top.
. http://www. startup-review. com/blog/istockphoto-case-study-how-to-evolve-from-a-free-community-site-to-successful-business. php .