During a conference call with analysts about the results, CEO Alan Meckler described the challenging environment the images division faces as one in which the traditional royalty free and rights managed business are in decline and the micro-stock and subscription businesses are growing, but the latter have yet to stabilize.  As he has on the last several quarterly calls, Meckler drew attention to the growing JupiterImages Unlimited subscription sales and related increasing deferred revenue as signs the business has a bright future.  He also stated the company would launch a Jupiter Digital “superstore “ by approximately September 1 of this year.  At the same time, MediaBistro will continue to expand its on-line training courses, another source of revenue growth.

Online Images revenue declined 6% from $27.9MM in 1Q07 to  $26.1MM in 1Q08, while the Online Media division posted a 23% increase from $6.9MM to $8.4MM over the same periods.  Gross, operating and net margins all declined, however, with the company showing an increase in its quarterly net loss from $1.1MM in the first quarter of 2007 to $1.4MM in the first quarter of 2008.

Web-site: JupiterMedia.com

Tim Gruber is this week’s featured new artist from our friends at Aurora Photos. Aurora’s staff regularly seeks out new, up and coming photographers. Those whose material they find especially unique and exciting, they share with us to highlight on abouttheimage.   We hope our readers will enjoy learning a little about these young pro-photographers and seeing examples of their outstanding work.

Tim Gruber is an upcoming photographer based in Minneapolis, Minnesota. This spring he recently finished grad school at Ohio University in the visual journalism program. “I got into photography four years ago during my undergrad when I was working on obtaining my bachelor’s degree in advertising. I found it to be an incredibly freeing and creative outlet. I found it also tamed my shyness and encouraged my curiosity. My friends and family would praise the work I was producing. At that stage in the game I was naive enough to believe them. The reality though was that I was terrible, but their encouragement kept me shooting,” Gruber explains.

Elaborating on his work Gruber remarks that, “most of what I do and love is driven by people. I’m also not going out and trying to be objective. I’m always trying to make statements with the images I make. Along with that I’m always working to create images that I hope will make viewers feel, which I believe can only happen when you’re shooting from your heart and are passionate about what you’re photographing. It probably comes as no surprise then that the work I enjoy and work on the most are topics and ideas that personally interest me. I also love the challenge of taking everyday situations and making them my own.”

He adds, “My interest in photography is all about living life with a child’s curiosity. Everyday presents new people, new places and new moments. What more could you ask for?”
 
Web-site: TimGruber.com

“We’re very pleased to be teaming up with myLoupe,” said Grill from his Jersey City studio.  “Over the past couple of years Tetra Images has assembled a global distribution network for its pictures, and we feel very strongly that myLoupe has the sort of world-class qualities we look for in a partner.”

Web: MyLoupe.com - TetraImagesRF.com

Gone, too, is the ritual quarterly conference call during which CEO Jonathan Klein and his top managers would discuss their performance and answer questions from analysts.  No doubt, Mr. Klein is relieved not to have to explain to Wall Street the weak performance.

The 4.2% real growth in revenue represents the mixed results of increasing micro-stock and editorial revenue and decreasing creative stills revenue.  This combination had an ill effect on the gross margin as the company pays higher commissions on micro-stock and editorial imagery relative to creative stills.  The company’s gross margin declined from 74% in 1Q07 to 71% in 1Q08 as a result.  Selling General and Administrative expenses also increased as a percentage of revenue due, the company says, to the cost of acquisitions, investment in areas with future growth potential, and negative foreign exchange fluctuations which combined to reduce the operating profit margin from 26% in 1Q07 to 19% in 1Q08.

In dollar terms, then, Getty earned net income of $24MM in the first quarter of 2008 on revenue of $233MM as compared to net income of $38MM on revenue of 213MM in the first quarter of the previous year.  This represents a decline in the company’s net profit margin from 17.8% in 1Q07 to 10.3% in 1Q08.

After giving the question "With all due respect, tell us something we don’t know?" some more thought, I wanted to lay additional groundwork for not only surviving rough economic times, but excelling in this new changing market as well. I offer this with one condition: Don’t kill the messenger!

In rough economic times all businesses look to reduce overhead by cutting costs. This is a known fact that has stood the test of time.  That said, photographers today need to readdress the whole business of photography and look to the clients that specifically hire them on an ongoing basis: automakers, catalogs, fashions, soft drinks, etc., the products that are made year in and year out. They should also be on the lookout for clients that have new models of products that need to be marketed to the consumer. These clients need a specific product shot for the ad and no stock photo will do. For instance, a new Ipod, a new 2009 car, new fashion, etc.... you get the picture.
 
The current state of photography today is that more and more people are buying stock / royalty free images and this isn’t going to change. Stock images have become a greater part of advertising than ever before. More and more photographers are contributing to the pool of royalty free images available today, thus, the prices are being driven down by a glut of good images on the market. "Why pay $500.00 for an image when I can buy one for a few dollars?"  This has become the mindset of most image buyers. The image history itself isn’t that important for the majority of the projects being done so why pay for it? 
 
So, this sets the table for what I’m about to say.  I offer the following based upon my understanding of business now. My past mistakes while running businesses has led me to these conclusions. Remember: Don’t kill the messenger!  I do invite disagreement / criticism but not death threats. I believe this is a good model and would look to implement it if I were still a commercial photographer.
 
Professional photographers need to consolidate their businesses!
Photographers today need to put their egos aside and look to the future. They need to create a consortium of talented professionals, quit being individuals and begin to build businesses apart from themselves. Thus, they need to operate their businesses as businesses. There, I said it. The biggest mistake I made when I was a photographer was I WAS the business. When I quit shooting, I was able to sell a studio and some equipment but NOT the business! Twenty years of good will down the drain. I know of an owner at a local donut shop that just got $250,000 for his rented location, equipment, and GOOD WILL. He sold his BUSINESS.
 
So, the next question: How is this done?
 
I would look to large law firms or major advertising agencies as the model.
As a hypothetical, take 100 photographers from around the country all working and billing a minimum of $100,000.00 per year - not much as an individual especially when you factor in expenses-form a consortium and incorporate it. Offer each photographer a base salary and a commission based upon performance, hours worked and dollars brought into the company. The corporation is now billing $10,000,000.00 per year. Now, that’s buying power. The photographers become employees of the corporation receiving such benefits as vacations, options, healthcare etc. If a photographer doesn’t pull his or her weight they can be fired, just like in any other organization.
 
This hypothetical business now is in a position to get bank loans and lines of credit as well as have a studio in every major advertising city- New York, San Francisco, Los Angeles, Dallas, Chicago, Miami, Seattle and Minneapolis ( you pick the cities) - available to all within the firm.  No individual photographer is working 24hrs per day so why pay for the overhead as an individual 24hrs per day?

If you take 1% of $10,000,000 or $100,000 per year and spend it on advertising just think of the impact that you could have in the industry. Agencies would like the buzz, art buyers would get one stop shopping and clients would recognize this hypothetical business by name. Why? Because it would be branded as the best, biggest, most complete studio in the world. The company would be able to hire accountants and bookkeepers to do all the billing from one location instead of the hundreds of accountants that you have now. It also would be able to bring in producers, stylists, reps, and assistants that can work within the company and be pulled into a shoot when needed. As the assistants gain experience, they can be groomed as photographers and become associates, much like associate attorneys in a law firm. The company would also be able to control stock shoots and be their own stock agency. The opportunities are endless. Most important, when you are ready to retire you have equity in the company and you can sell this equity back to the partners or to a new photographer coming into the firm.
 
Congratulations, you’ve built a company that is bigger than you, the individual photographer!  You’re a professional that deserves professional fees and respect.
 
This is a very rough overview, but it is doable and can be highly profitable. It can be accomplished with as few as 10 photographers in a single city to a few hundred in multiple cities. Again, look at law firms or major ad agencies working under one corporation in multiple cities. To accomplish this it will take a committed group willing to break the mould of what has been and build for what can be. Do you want to survive in rough economic times? More importantly, do you want to change an industry? Here is the road map.

Web-site: PhotoSpin.com