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Preview: Dan Heller's Photography Business Blog

Dan Heller's Photography Business Blog

The photography world -- the business, the culture, the art, the politics, the technology.

Updated: 2018-03-06T09:20:18.597-08:00


Royalty Free no longer exists


I have always gotten a continuous stream of questions about Royalty Free vs. Rights-Managed images, and I usually just send people to numerous posts I've written in the past.But a recent email to me concerning Photoshelter's use of the terminology compelled me to post a short blog entry on the subject to try to make it even simpler to understand.Royalties are payments made to authors (photographers in this case) in exchange for the right to sell works (images). The moment any photographer is ever paid anything by an agency, s/he has received a royalty. Even if it's a one-time payment.Rights Managed ("RM") means that someone has the right to say how a photo may be published. There's always someone that has the right to manage a work's usage terms. Yes, "unlimited, unrestricted use" is still "managed" if that's what the rights manager wants. Even public domain and creative commons are terms stipulated by someone -- usually the author.By definition, ALL images are Rights Managed, even if the manager chooses not to assert those rights, or is very liberal about how others may use the photo.Royalty Free ("RF") refers to a special kind of license agreement that can only take place between two stock photo agencies. Here, the primary stock agency grants another agency the right to resell images, and that second agency is under no obligation to pay royalties back to the photographer.Why would such a thing happen?Before the internet (and up till mid-1990s), distribution of images to buyers was difficult. Smaller stock agencies that couldn't sell some supply of images started selling them to OTHER stock agencies with better distribution channels (usually, the early internet adopters). Because these images were usually lower quality, the concern was that these images might not sell. In order for the deal to make financial sense for all parties, the photographer was paid a one-time royalty for the transaction, the primary agency got a single, lump-sum payment from the secondary agency, and that second agency was now on the hook to make some money. Sometimes they did, but often they didn't. But they could only agree to take this risk so long as they were not obligated to pay royalties back to the photographer. These were royalty-free images. At the time, photographers were finally making money from images that would have otherwise sat unsold, and the smaller agencies were often seen as tributaries to the main stock agencies, who themselves were taking advantage of a very quickly expanding base of buyers because of the growth of the internet.As the idea showed profitability, more agencies started selling and reselling the same images in the same way to many stock agencies, creating a huge market for RF images. Each time, the photographers would get royalties from each such sale. And, in each case, the "royalty free license" meant that each (secondary) agency down the distribution channel was not obligated to report sales or pay royalties to the photographer.The tipping point came when the ease and cost of access to the internet allowed those smaller agencies to sell directly to the buyer. And, for the buyer to find those images through better search engines. The need to feed the primary agency networked collapsed, which coincided with the time when Getty's stock price was plummeting from the mid-$80s to the low $30's, when they were finally taken private. Note: Getty's price didn't plummet because of the rise of RF images. The entire economy of images was falling precipitously because no agency could control (choke) the supply channel any longer. All agencies were hurting and RF was no safer than traditionally-licensed images.I am currently unaware of any actual Royalty Free Licenses being used in photography. I believe it no longer exists. (The practice is still used for clip art, icons and some other kinds of media (smaller music labels) where channel distribution is still difficult.)So, why are the terms, "RF" and "RM" still used? Remember how those secon[...]

Pinterest Copyright Infringement: Yeah, so what?


The latest hot startup in the photo-sharing space is one that is also creating a lot of controversy about copyright infringement. Pinterest lets users create "boards" of images they find from around the Web. Users “pin up” these images, and share them with friends and strangers. “Is this copyright infringement,” you ask? Well, imagine exactly the same website that let's users upload music or movies. Do you think the music labels or movie studios would permit this? Pinterest would be shut down before they could get their first dollar of venture capital. “But they’re photos, not music or movies!” Yes, and photos have precisely the same copyright protection. “Ok, wise guy, then why hasn’t Pinterest been shut down?” Simply put, there’s no one there to stop them, at least not with the same effect and scale as music labels or movie studios. And the reason is reflected in your very statement: society simply regards photos as “different” from movies; they don’t see Pinterest’s use of imagery as copyright infringement. And this is a natural feeling to the common person. Everyone shoots pictures all the time; it takes milliseconds; most people don’t invest any thought or intent. By contrast, music and movies require considerable time, effort and expense to produce. So, there’s a difference. And herein lies the unresolved problem: the law is the law, and photos are copyrighted works, regardless of the time, skill, or anything else necessary to create them. Accordingly, photos are supposed to enjoy the same legal protections as music and movies. “I see. But, most people want and expect to share their images with others.” Yes! Their images. Pinterest isn’t letting people share their own photos; they’re sharing other people’s photos.” “Ah, I see now.” Very good, Grasshopper. As a society, we permit this kind of infringement, which explains why there are no large, powerful, influential organizations representing the interests (and the copyrights) of photographers. People simply regard photos as different. A case in point can be found in this article on, discussing people’s reactions when they found their recipes were being “pinned” to Pinterest, along with the photos of their foods. The complaint was that their intellectual property (cooking recipes) were being stolen; the recommendation: “Just allow the photo to be shared, not my recipe!” You see? Never mind the pro photographers whose pictures were being infringed; they’re not part of the conversation. “Ok, so what about those professional photographers? How are they hurt?” I’ve been a photo industry analyst since the mid 1990s, and I’ve seen the industry suffer more from “piracy” than the film and music industries combined. Every single publicly traded stock photo agency has either gone out of business or withdrawn from public trade. Getty Images is the last profitable company of any significant size, and even then, its pay to photographers has been drifting lower for over ten years to maintain that status. A series of studies from Picscout – a photo-tracking service for stock agencies and photographers – finds that 90% of commercial websites use at least one photo in a manner considered to be “commercial use” without the copyright holder's authorization. No company whose business model is to sell or license photography has had venture capital investment since 2000. Yet, the shadow economy for photography is enormous. In a study I conducted in 2007 on contract for a potential investor in a photo-related technology, I found that most photo buying and licensing was done on a peer-to-peer basis, mostly in local markets and exchanges, at a scale that suggested the total economic activity tipped at $25B/year. Yet, none of it can migrate online because of the “perception” that photos don’t count when it comes to piracy, and because there was no possible infrastructure to enforce legal protections. [...]

Market Efficiencies and Stock Photo Pricing


In my last blog post, Selling Stock: It's About Search Rank, Not Price, I argued that the price variability in the stock photo industry can be exploited by those who garner high search rankings. The rationale is that the direct and indirect cost (overhead) of finding an image so far exceeds typical license fees, that photo buyers are more indifferent to those license fees than sellers believe. Thus well-ranked photo sites would be able to command higher license fees, simply because they have first access to the buyer.In fact, well-ranked photo websites are undermining their own profitability by lowering prices unnecessarily, mostly because they are following their perceived competitors, not because the customer is demanding lower prices. Their rationale would follow traditional economic theory under most market conditions, but therein lies the exception. The photo industry does not represent "normal economic conditions." Indeed, the photo industry represents a classic case of an "inefficient market."Let me explain by starting with the definition of an "efficient market." It can be summarized as a market of buyers and sellers engaging under conditions where all information is available to parties on both sides of a transaction. (See this wikipedia link for extended definitions, examples, and citations.)Examples of efficient markets are exchange-traded commodities like oil, orange juice and automobiles, among others. Here, producers of commodities make their wares generally available, and market-makers trade on this information. It is exceedingly difficult (if not impossible) to have inventory that the market is unaware of, or to purchase commodities without the broader market's awareness. These are the conditions that lead to the definition of an "efficient market."While there will always be price volatility, it is almost entirely governed by predictions of how supply and demand might be affected by external events. The weather affects the price of Orange Juice; war and instability affects the price of oil; and a litany of factors affect the auto industry.When it comes to image-licensing, most buyers and sellers do not have that much information about the "global" market of buyers or sellers, let alone access to conditions that can affect future supply and demand. This results in "market inefficiency," which results in price inconsistencies, precisely as predicted by economists. Therefore, prices vary from high to low across the spectrum, depending on the perception of the buyers in any given time/place. This is because they have limited and incomplete information about the global supply chain.This also explains why people objected to my proposition from my prior article. They do not have access to "all information," and worse, they are unaware that their worldview is limited. That is, most pro photographers are under the illusion that the entire market of stock photos is monopolized by a small number of stock agencies.Ironically, the other markets (non-agency buyers/sellers) don't see the other side either. These discrete and separate markets will, by definition, find different prices than buyers in other markets. Stock agencies will view one another as competitors and lower their prices, whereas websites that are unaware of stock agencies (or don't attempt to compete with them) will command higher prices.To optimize prices and create an efficient market, the following would have to take place:Stock agencies would have to expand to cover a larger proportion of the image-buying market. As my prior article advised, the way to do this is to partner (or merge) with photo-centric websites, whose proportion of global internet traffic is very high. This will allow "more information to be more universally available to a greater proportion of the buyers and sellers." This now leads to market efficiency.Once the market became efficient, it could then be automated through predictive pricing algorithms, precisely the way Google automated online ad prices using an auction-b[...]

Selling Stock: it's about search rank, not price


Yesterday, I reposted an article I originally wrote in 2007, discussing the misconception that microstock pricing is what's driving down overall license fees.I got a few emails that still challenged my assertion, and it appears I haven't emphasized strongly enough the most compelling arguments supporting this thesis.All of my research supports the premise that the primary cost of licensing images is not the license fee, but the overhead associated with finding and acquiring the right image. The overhead and administration of a project that would involve photo licensing shows that the actual license fee ranks very low on the budget -- hence, low on the buyer's priority list. My 2007 surveys of buyers showed that.If the person responsible for finding images for a project is paid $60/hr, and this person spends 2-3 more hours looking for a photo just to pay $1 vs. $50, this translates to paying someone $120-180, just to save $50. People who control budgets know that the license fee for photos is negligible to the total cost of production, even at the traditional stock photo rates. The bigger the project, and lower the proportion of the license fee for the image(s).Those who sell images are dropping their prices because they're looking at their competition, not the buyer. Further, there is absolutely no evidence to show that sites that have lower prices sell more images. There is definitely a perception that there's a correlation, but that's because people are comparing apples to oranges. Getty sales vs iStock sales are not apples-to-apples because the two entities vary dramatically in search engine results (and other important factors). People talk about microstock sites more, and they link to them (in blogs, discussion forums) and the quantity of images on microstock sites is rapidly growing. So naturally, these sites get higher rankings in search results. Search engines don't rank sites because they have lower prices. They rank sites by size (content), links, and a black magic formula that is best described as "dispersion of discussion in and around the net." In short, microstock sites have more content and get more attention. Hence, better rankings, which translates to more traffic, which attracts more photographers to submit images to them, perpetuating the feedback loop.In my 2007 survey, those who indicated they were aware of--and use microstock sites-- most don't go to them because the prices are lower; it's mostly because those sites ranked higher in search engine results, where the buyer starts.Because search engine ranking drives traffic -- especially the untapped (and unaware) segment of the global economy that doesn't use stock agencies -- and because the greatest cost in photo acquisition is time, not the license fee, 90% of the time-savings is the image results the user gets on that initial search. If it takes the buyer to a stock agency site -- microstock or otherwise -- then the deal is nearly done. Price notwithstanding.This is primarily why I have advocated for years that stock sites should focus their entire effort towards optimizing search engine rankings. While they could have done something about it in the past, the rise of social networks and the plethora of image-related websites and apps has made it impossible for agencies to rank highly on image-search rankings on their own. In today's market, they have no choice but to either partner with, or acquire/be-acquired-by a social-networking site.The Getty<->Flickr combination is a very pragmatic example. Yahoo is circling the drain, and it needs to shed its non-performing assets and focus its attention on ... something. Whatever that is, it isn't Flickr, and there aren't a lot of buyers that would be interested in that asset, except for Getty or Corbis. The combined product would involve retooling Flickr to be far more socially active (to keep up with modern social networking trends), and to integrate licensing/acquisition in[...]

Myth about Microstock Pricing's Effect on Licensing


This is a repost from an article I wrote on March 8, 2007. It came up in a discussion I had with a stock agency today, and found that much of what I wrote is still true today.__________________________________________I was talking with a photographer friend of mine about why he doesn't sell his own images on his website. His response was, "Who can compete with microstock agencies selling images for $1 each?"My immediate response was, "I do just fine. In fact, I've raised my prices at the beginning of the year."And that got me to thinking, Why is it that I can do that? Why aren't buyers pressing me to lower my prices? Why aren't competitors stealing my business?The short answer is counter-intuitive for economists because there's a twist to this story that is rarely ever seen: it's not the buyer pressing prices lower, it's the competitors themselves. They're simply acting naturally, according to the laws of supply and demand: as the supply goes up, prices drop so competitors can sell their wares. But what's happening in the photo microstock industry is a bit of twist: buyers aren't putting pricing pressures lower, but the sellers aren't expecting that.How can we tell? Well, by the data. The premise begins with the question I posed at the top: why aren't my sales hurting? The two-part answer begins with the fact that my site ranks very, very highly. (Or, it did at the time of this writing back in 2007.) This means that when people search for images, they get to my site ahead of many others, at least for certain keywords. (I rank high for a lot of keywords, but I don't claim to have cornered the market by any means.) The second part of the answer is that if they find the image they want, they simply buy it. If price was a concern, they would move on.One might ask, "How do you know who's moving on and who's staying?" Again, data. My traffic has gone up and down dramatically since I started selling images online back in 1998. Since then, there's been a very tight correlation between the total unique visitors and the number of images I sell. The only variations to that rule have come when I've adjusted prices, and even then, the results were counter-intuitive. When I started selling pictures, my prices were naively low and I got very little buyers. It wasn't until I raised my prices did I finally get more buyers. (I talk about this experience in greater detail here.)Once my pricing stabilized, my ratio of traffic to buyers has remained constant. Even as microstock came into the picture, and people were dropping their prices precipitously, I never did. Yet, the ratio of traffic to sales has remained flat. If pricing were a factor, that ratio would not remain consistent.This then begs the question, why doesn't the buyer care about price? There are two very likely answers that are both supported by data. First, most buyers are not aware of other, lower-priced sellers. Second, despite the possibility of a lower price elsewhere, the differential is not enough to bother. Let's take each separately.Regarding the "awareness" of other photo-selling sites (like microstock), we are still in an era where online licensing of imagery is still unknown to most photo buyers. Most pro photographers would have a hard time believing that, but this is explained by their historical roots: most pros are used to a very narrow group of buyers—the old-style traditional print/news media companies—who use traditional stock agencies. There was a time when media companies were the only buyers of images, and most pros (and agencies) continue to believe this delusion. As long as this class of buyer continues to buy in large volumes, the delusion perpetuates.But traditional media agencies are not the only buyers of images by orders of magnitude. (Editing note: In an article I would write several months after this one—which would be titled, The Total Size of the Photo Licensing Market —I cite numerous data that supports the thesis that most phot[...]

Creative Commons Effect on Photo Licensing


Julie Bernstein asked me the following question: "I am curious if your views on Creative Commons have changed since the four articles you published on this topic in '08."Julie is referring to these articles (part1, p2, p3, p4) where I describe the CC as a great licensing method for almost all media types except photography.In summary, what the CC has done is create a legally legitimate infrastructure for those who freely share copyrighted works. Before CC, such activity was technically an infringement, because the the publication of creative works requires consent of copyright holders. CC clears up that technicality, which is great. But it has inadvertently given people the impression that it has affected the licensing industry's pricing structures.CC has not affected the greater licensing market (or prices), largely because of risk: CC has no centralized authority to assure that content is either submitted properly or used properly. Because it's so easy to game the system on either side of the photo (the supplier or the user can sue the other by luring them with a legally misleading scenario), the financial liability for anyone with a lot to lose is simply too high, especially given that traditional license fees are so minimal. So, the majority of image buyers simply stay away from CC.Now, this is not to suggest there's something wrong with the CC model in principle. I'm a big advocate for it in all other contexts. Indeed, it was born out of the "free software" meme that was popular in the 1980s and 90s, when Gnu Public License (GPL) and other models were the precursors to the "open-source" model we still enjoy today. These are great innovations in licensing because they allow intellectual property to be used for the greater good, while also allowing for commercial use of those innovations.But CC in the world of engineering is entirely different from photography. Engineering takes a considerable amount of time, resources and (usually) teamwork to produce anything of value that those in the open-source community would use. As such, the kind of content there is proportionally minimal, and each work is substantial and recognizable, making infringements quite easy to spot.None of this is true in photography -- trillions of images are produced daily, it's impossible to track any given photo, or whether it is "legitimate" (either by the owner or the user).So, sure, in a world of honest people that want to freely share their content in a peaceful corner of the image licensing market, CC is great. The CC market is growing, but the perception is only as a measurement of itself, not the total licensing market. An article on that topic can be found here:, it's natural to ask, "If CC is so easy to game, why haven't we seen it?" The answer is because the market is so negligible. Economists often use crime data as a reality check on the economic activity they think they're aware of. The higher the crime rate, the more economic activity there is, and there's usually parity between that activity and the presumed size of a commodity's market. If there's little crime, the market size isn't big enough to warrant the effort. If CC were to genuinely gain momentum, it would attract those who would game the system for profit, which itself would have a cooling effect, bringing its popularity back down.For the record, I've proposed that the best way to assuage people's risk concerns about CC is to use the "copyright registration" system. The CC foundation should have a submission system where those who want to submit images for CC licensing would bulk register those images to the copyright office. This gives them the right to file claims on behalf of the copyright owner, which is how major stock agencies like Getty work. Registered images are eligible for higher level of copyright protection, and there are federal penalties for frau[...]

"Commercial Uses" and Model Releases


In my last blog post, "Myth-Busting Model Releases", I received quite a bit of email from people about "commercial uses"of images, pointing to other discussion forums where, again, myths and hearsay prevailed among many misinformed, but well-intentioned photographers.The common assumption is that "commercial uses" of images require model releases, but that's not actually true. The sole trigger for whether a release is required rests on whether the subject can be perceived as supporting or advocating a particular idea, product or service. True, many "commercial" uses of images do have people appearing to be advocates, and this is where the oversimplification begins. People overlook the many commercial uses where a person can be presented without appearing to be a supporter or advocate. Similarly, there are non-commercial uses that do portray the subject as a supporter or advocate, which would require a release. Two examples follow:On the commercial side, there are companies that sell books, magazines, newspapers and other forms of media. While the content of their media may be editorial in nature (which doesn't require a release), the promotion of their products is commercial in nature. Just because they may be promoting an editorial product, it's irrelevant. Promotion is a commercial activity. Full stop. But again, "commercial use" does not itself trigger the need for a release.For example, a highly critical book about Rush Limbaugh ("The Most Dangerous Man in America"), by John Wilson) sports a photo of Rush himself on the front cover. And given the scathing nature of how Rush is portrayed in the book as an irresponsible, sexist, racist, ideologue, one would expect that Rush signed no model release or provided consent of any kind to have him or his likeness be associated in any way with this book. Obviously, the text is editorial commentary about the controversial radio host, so no consent is necessary for using the photo on the book itself.But what about the promotion and advertising for the book? Both of those are "commercial" in nature: profits are made, and the book itself is a product. Again: promotion is "commercial use." Full Stop. So, one would think that Rush would have his lawyers find any legal position possible to stop or slow down the supply chain, from the photographer to the stock agency to the publisher. Yet, there it is in full color, used to both promote and advertise the book.The reason a release is not required is not because this was the photo used on the book, but because this photo—or most any photo—would not cause a common person to believe that Rush is an advocate or sponsor of the book. (If there were a photo of Rush standing proudly next to a poster sized replica of the book, then such a photo could suggest he advocated the book, although the existence of such a photo would be unlikely.)So, the fact that a photo is used as part of a promotion is a red herring. Photos may be on web pages, in portfolios, and presented for sale, yet the "advocacy" question is not satisfied simply because photos are displayed. There has to be more context to imply advocacy.This is true of non-commercial uses as well. Non-profit companies often believe they can use photos of people in their materials because they are implicitly "non-commercial." But again, the determining factor is whether the person could be perceived as an advocate or sponsor of the organization.Speaking of supply chain, note that the photographer who shot the photo of Rush Limbaugh didn't need a release to take the picture or to sell the image; he didn't need to know what the buyer was going to use it for, assuming he was even aware that someone was buying it. Similarly, a stock photo agency can display the image online, which is how the book publisher (Thomas Dunn Books) found it.The moral of the story is, take "commercial use" out of your vernacular, and only focus on the "advo[...]

Busting Myths about Model Releases


The internet is a virtual echo-chamber of facts and myths of all sorts. When something goes viral, there's no stopping it. Even the most blatant falsehoods can perpetuate for years if they cause no harm in believing them. An example is the myth that the different regions of the tongue tastes different types of things: sweet in the front, sour in the back, etc.. In fact, all taste buds are identical, but the myth started from a single, faulty study in the 1800s that was published in a school text book, and it's been repeated ever since.In the photo business, the greatest myths are those involving model releases. If you have ever considered selling (or licensing) photos on your own, or through a stock agency, you've probably been told that photographers need "model releases" to sell photos of people, and "property releases" to sell photos of buildings and the like. Some stock agencies actually reject images unless these photos have releases.While it's true that model release are necessary for certain situations, the actual laws about these issues are deep and complex. As rumors and hearsay perpetuate on the net, the over-simplification has resulted in virtually all the "advice" and conventional wisdom about model releases to be entirely wrong. And the reason why these myths perpetuate is because they cause no harm. No one ever got sued for having a model release. So, people follow the advice because they (and others) seem to be safe, perpetuating the myths.So, why address the myths about model releases? Because photographers are losing enormous opportunity by not trying to sell the images they don't have releases for, and by going to great lengths to get releases they don't need. Despite the rumors, most publications of photos are not the type that need releases anyway, resulting in an enormous market of buyers. Most photographers could continue to have very successful businesses without ever getting model releases, all while doing exactly what they are doing today. Sure, releases are important for many types of publishers, so if you do get releases for their benefit, you can expand your buyer base by getting them. But it's a proportionally smaller market than people think, and the time, effort and resources necessary to properly obtain, manage and catalog releases is rather substantial. This investment will rarely be offset by the incremental income from sales of images that actually do require releases.This article attempts to help the photographer looking to make money by setting the record straight on the most common myths about model releases. Fact #1: You do not need a model release to take pictures.Nuff said. Don't let anyone tell you otherwise. Everyone in the world has a camera on their phones, and photos are taken constantly. You don't need someone's permission to take their pictures. Now, just because you might eventually intend to sell your photos has nothing to do with the ability to take pictures in the first place.Fact #2 You do not need a model release to sell pictures. And "profit" has no effect on whether a release is required.First, newspapers buy photos, and their use of the photo is unlikely to need a release. So, selling a photo (and making a profit doing so) to a newspaper also does not require a release. And because the law does not require you to have any knowledge of the buyer or their intended use of a photo, you are always allowed to sell photos without a release.Fact #3 You do not need a model release to make photos available for sale, either on your own website, or through a stock agency.If one can sell a photo without a release, one must also be able to "make photos available for sale" without a release. This includes the publication of such photos in a manner that would allow potential buyers to find them.The legal case that established precedent for this was Corbis vs. James Brown, where the judge call[...]

Time-Lapse Movies Demo Reel #1


I'm happy to announce that I've entered into an agreement with Thought Equity as the exclusive reseller of my time-lapse video content. Although I will continue to sell still images on my site (, licensing video is another matter entirely. In other words, it's a very narrow, tightly-controlled market segment.

You can browse my movie clips here:

The following is a short (3-minute) demo reel of a few select time-lapse scenes.

width="560" height="345" src="" frameborder="0" allowfullscreen>

If the video does not appear above, use this link:

Search Engine Optimization and The Long Tail


I was inspired by an entertaining article I read in today's New York Times titled, The Dirty Little Secrets of Search, detailing the rise and fall of JC Penney's Google rankings. Turns out, JC Penney's SEO consulting firm allegedly bought a huge number of paid links on websites, most of which aren't actual sites at all, but domain names purchased solely for the purpose of placing links to PC Penney. Google takes this very seriously, and has been known to eliminate sites completely.The rationale for this approach is, as most people know by now, that your ranking is governed most largely by the number of other sites that link to yours. Unfortunately, what many people still don't know is that gaming the system doesn't work. (Link exchanges are a sure way to lower the ranking of both sites that link to each other. That's why JC Penney's SEO firm just created sites that had one-way links.) While it'd be nice to have organic linking, where people simply "talk about you" (and provide a link) on many websites on the net, that's not so easy to do and takes a lot of time.In this day and age, if you're going to succeed as a stock photographer, you have no choice but to figure this out. This strategy begins with two questions: 1) which keywords or phrases do you want to rank highly for, and 2) how do you seed yourself around the net?The answer to the second question begins with the first: find the right keywords.Here is where most photographers (and agencies) get it wrong: they shoot for keywords like, "stock photography," and other industry trade terms. But this doesn't work so well. Google's Traffic Estimator shows terms like "stock photography" yields only about 90,000 global monthly searches. Sites that rank highly for only a few keywords or phrases never do well, even for popular search terms. Instead, reach for many search terms -- as many as possible.My site ( ranks in the top five positions on 751 search terms, and 1205 search terms rank in the top 10 on Google Search results, according to Google's Webmaster Tools. But I'm not actually trying to rank highly for any given search term at all. That would be futile. Odd as it may sound, I rank #1 for "stock photography business," but I swear I didn't try to. Of course not, because that search term doesn't generate enough traffic to warrant investing any special time or effort. That's the point. This is the "long tail" approach to keyword indexing: it's about breadth, not depth. I don't get that much traffic to any single page. By ranking highly in such a vast number of terms, it's the aggregate that matters.All this starts with simply being indexed. That is, search engines have to know what words and phrases you have before it can rank them. Choosing the right words is one thing, but you also need Google to trust your keywords. In other words, trust you. Unlike standard text on a page, which Google is good at, photos are different. An algorithm doesn't know what's inside a photo -- it has to look at other characteristics to determine its content, such as surrounding text, the name of the page it's on, and of course, its metadata. In particular, the "keywords" tags embedded in the IPTC header of the image file.Once again, here's where most photographers and agencies get it wrong: they "pollute" their keyword lists with dozens, if not hundreds, of phrases and expressions, hoping the target image will come up as a search result for any one of them. But Google will actually penalize people try to game the system with "black hat" approaches, like using repetition (singulars and plurals together), lots of synonyms, intended misspellings (by seeing both the misspelled and correctly spelled words together), and tons of generic terms (such as "photo", "image", "photography," etc).Products like Cradoc's Keyword Harvester and A2Z Keyw[...]

The perils of taking advice from pros


I got an email today that seems to be representative of a common thread I'm seeing. I included excerpts from the original sender and my responses: In Chapter 7 you note that in 2000 you increased your image library, and had a big spike in traffic (2000 visitors/month). If you don't mind me asking, approximately how many images did you have online entering 2000?I have no idea. And though I appreciate the motivation for your question, the milestone comparisons are inapplicable. The major reason my success back in 2000 was that there was virtually no appreciable photo content online. Anyone that put photos online did well. Most pro photographers were still shooting film, and the time and cost of getting that media scanned and online was a major barrier for photo imaging growth. While digital cameras were around, their resolution and image quality were too low to have much commercial value till 2003 (Canon's EOS 1Ds was the first camera that could produce an acceptable professional image quality for commercial production.)So, whatever size my archive was, or photo quality, it was easier to succeed. So, don't look at my past as having any relevancy to today's market.I tried to advise pro photographers to do this back then, but most were adamant that it would cause more harm to have images "stolen", and that film-based stock photo agencies were still the only viable distribution channel. It was this heated argument that propagated my postings (and my website) to other websites, which resulted in my getting so many links, which translated into traffic, which helped elevate my site rankings, which translated into sales.(Ok, I'll admit it: I probably also had a lot of worthwhile photos to buy.) A big part of my strategy is blogging on my image creation and some of the places I have visited where images were taken. I'm trying to be as search engine friendly and optimized as I possibly can, per your suggestions.My suggestion is not to be "search-engine friendly", per se. It's to rank highly in search results. The two are not the same, and you don't achieve high rankings by having search engines merely find you and index you accurately. (That's being "friendly".)Ranking highly in search engines requires other sites to link to your site. The value of those links are assessed by the ranking of those sites, which affect your ranking. Search engines are aware of people attempting to game the system through "link exchanges". Accordingly, you can reduce your own rankings if you try to agree with other sites to link to each other as a way of increasing each of your link counts. Those sites rank poorly, and so will yours, if you do link exchanges.So the question is, who do you want to link to you?Writing articles on "image creation" and "the places you've been" will attract mostly other photographers. And they don't buy photos. While it is certainly desirable to have highly-ranked photo-centric websites link to you, this is a very narrow market, and not one that will boost your overall rankings that ultimately attract image buyers.If you're going to invest time into blogging, you want NON-PHOTOGRAPHY sites to link to you. How do you do that? By blogging about subjects that probably have less to do with photography as the other subject.My advice has always been to be an expert in something other than photography. Write about that and cross-post your articles to discussion forums or other formats to attract new and different audiences. If they regard your knowledge and opinions as valuable, they will link to you, talk about you, and regard you as credible. This is what will raise your site's ranking.Do I follow my own advice? Well, not as much as I should. Yes, my site has a lot content about photography (business and techniques), and yes, I rank highly for tha[...]

(New Photos) On the Nile: Cruising from Cairo to Aswan


I just posted a new gallery of photos from the photo expedition I lead in Egypt over Christmas. You can view them here:

I also shot time-lapse footage of select scenes here:

Day 3: Luxor Temples


Day 3 already. These images are from Luxor, the main temple and Karnak.

Tomorrow we go on a boat down the Nile, and there's no internet access... apparently, for five days. What will I ever do.(image)

Cairo, Day 2: The Old City


Merry Christmas everyone -- here's pix from Day 2 of my photo workshop.
We spent the day in the Old City... great stuff to see.

Trip to Cairo: Day 1


I'm on a new assignment, leading another photo workshop. This time, I'm in Cairo Egypt.

Rather than wait till my trip is done and it takes me months (or longer) to post photos to my site, I thought I'd post them here on a semi-daily basis as I shoot them. So, here are some select shots from today:


Model Release Seminar: Tuesday Nov 9 (ASMP, SF chapter)


I forgot to mention this sooner: I'm giving a three-hour seminar on model releases as the San Francisco chapter of the ASMP starting at 6pm ($20 for non-ASMP members, $5 for members, but then, there's free food).

Information can be seen at

Flatter Stock Licensing Tiers


I was recently sent email from someone who asked very good--and very common--questions, and I thought it might be apropos for my blog: Do you think that a price does not depend on target audience? I imagine that for web use it has not a sense, but for books, newspapers, magazines, CDs: does not it have still importance in current market?The current stock photo market is such that simplicity is king. For the most part, buyers are no longer accustomed to pricing tiers based on the criteria you mentioned above. Back before the internet, buyers and sellers had those pricing tiers because the economics permitted it. That is, buyers understood that different uses and tiers made it possible for them to get access to commodities that used to be under much tighter controls. In the 1990s and before, stock photography was sold through glossy, elaborately designed books; if a buyer wanted a photo of a tiger, there was a page with about 10-15 images, and that was the entire lot to choose from. When the supply of images and the distribution channel are tightly controlled, the distributor has much more control over the pricing structures.Furthermore, the supply chain between image creators and users was more complex and expensive: there's the overhead of having slides sent (both ways), the overhead of scanning and touching up photos, personnel and expertise in design and technology, all of whom were skilled and nuanced trades.The combination of a controlled distribution channel and an expensive supply chain implied a delicate balance in the financial flexibility between buyers and sellers, each wiggling up and down in price negotiations to settle at an equilibrium: a pricing structure that allowed lower-revenue editorial clients to participate alongside their commercial counterparts. This inherent inequality was balanced by those very pricing tiers, where buyers could plan their publication budgets so that they could put more money into images that appeared on more prominent positions (e.g., a cover shot vs interior pages), or to buy more or less "exclusive" content that fit their needs.But then the internet and digital photography came into the picture. Here, the cost of creation and distribution of images went to zero, which subsequently opened up the channel to everyone that was previously locked out: consumers, hobbyists and semi-professionals. These two factors contributed to the collapse of the entire economic "reasoning" behind the pricing structures of stock licensing. Back in 1999, I said that it'd take about 10 years for this to filter through the economic ecosystem, and the supply/demand imbalance would erode those tiers, and the pricing structures would invariably flatten.Indeed, publications no longer hire high-end photo editors with an art degree, skilled in design, and savvy in the business of creating quality publications. As lower-skilled (and lower paid) workers leveraged increasingly more sophisticated page-layout and print software, very high-quality publications can be created at much lower physical and employment costs. This has created a fundamental shift in the economics of every single business that uses imagery, not just photographers and agencies. Every company in the world uses photos of some kind at some point in the company's lifetime, and since companies employ people, one can say that the entire world's cultural attitude about imagery shifted: it's no longer considered a skilled labor, but that of a commodity, where just about anyone can do "a reasonably good job" (not that all of them actually do).The net effect on the photo industry is a recycling of the photo-edito[...]

The Obama Photo Copyright Controversy (Revised)


NOTE: This posting is intended to supersede my prior blog post on the same subject. This article is a more concise articulation of the more relevant issue facing the controversial topic.I was recently forwarded Peter Friedman's article titled, Fairey˙s Obama Hope poster copied nothing from Garcia˙s photo that could be copyrighted.Normally, the arguments in this case are whether Shepard Fairey's artistic rendering of the image is an infringement of a photograph by AP photographer, Manny Garcia. But in this case, Friedman argues that the image doesn't have enough "copyrightable elements" for it matter in the first place. Under copyright law, works are ineligible for copyright protection if they do not contain enough unique qualities that would differentiate them from others. For example, photos of coins are generally not copyrightable unless there are unique angles, uses of light, or other qualities of a "creative" nature. Friedman argues that, while Garcia's photo may contain some elements -- though he also argues they are minimal at best -- Fairey's artistic rendering virtually removes them: that Fairey's image has few, if any, copyrightable elements. His article states, "the poster entirely changes these details by transforming them into a stylized combination of red, white, and blue. Moreover, it is plain the colors of the photograph are in marked contrast to the colors of the poster."Friedman's logic concludes that if Fairey's photo has no copyrightable elements, then how can such a work infringe on any other work?While an intriguing question, one that I hadn't heard raised before, the artist in me has a hard time buying into the notion. Fairey's is a very identifiable style, one that Friedman himself applies to his own image, as shown here.Not only does Fairey's rendering enjoy its own protection under copyright, but the fact that it was derived from Garcia's photo means that Fairey's ability to use the work is limited. No one disputes that. Where the real argument begins is discerning the conditions where Fairey is limited, and where he's not. That is, unless he gains permission from Garcia, Fairey's use of his own rendering is limited to "editorial" uses, such as artistic display, political or social commentary, satire, and so on. On the other hand, "commercial uses" require Garcia's consent, such as when the image to advocate a product or service, or to promote an idea, including political or religious points of view. These are the types of uses that define "commercial use" as described by most state publicity laws. Granted, publicity laws and copyright laws are different, but the definition of terms are consistent.And herein lies the ultimate question: is the Fairey "Hope" poster a form of protected political speech, or a commercial use? As Friedman points out, political speech is at the heart of the First Amendment, and people's right to express themselves--especially on matters of politics--is always given deference by the courts.While a true statement, it's not quite that simple. Just because the Fairey image has been used in a political context does not necessarily imply that it's "political speech." And even if it is, the greater question is whether you can appropriate anyone -- or anything -- as a tool in that speech. For example, if the Fairey image were of a recognizable factory worker holding a hammer, and that person was an ardent Republican, we can be very sure that this person would sue Fairey for suggesting that he was an advocate for Obama. And the courts would not even begin to entertain the notion that this use of the image was "prote[...]

The Obama Photo Copyright Controversy


I was recently forwarded Peter Friedman's article titled, Fairey˙s Obama Hope poster copied nothing from Garcia˙s photo that could be copyrighted.Normally, the arguments in this case are whether Shepard Fairey's artistic rendering of the image is an infringement of a photograph by AP photographer, Manny Garcia. But in this case, Friedman argues that the image doesn't have enough "copyrightable elements" for it matter in the first place. Under copyright law, works are ineligible for copyright protection if they do not contain enough unique qualities that would differentiate them from others. For example, photos of coins are generally not copyrightable unless there are unique angles, uses of light, or other qualities of a "creative" nature. Friedman argues that, while Garcia's photo may contain some elements -- though he also argues they are minimal at best -- Fairey's artistic rendering virtually removes them: that Fairey's image has few, if any, copyrightable elements. His article states, "the poster entirely changes these details by transforming them into a stylized combination of red, white, and blue. Moreover, it is plain the colors of the photograph are in marked contrast to the colors of the poster."Friedman's logic concludes that if Fairey's photo has no copyrightable elements, then how can such a work infringe on any other work?While an intriguing question, one that I hadn't heard raised before, the artist in me has a hard time buying into the notion. Fairey's is a very identifiable style, one that Friedman himself applies to his own image, as shown here.Not only does Fairey's rendering enjoy its own protection under copyright, but the fact that it was derived from Garcia's photo means that Fairey's ability to use the work is limited. No one disputes that. Where the real argument begins is discerning the conditions where Fairey is limited, and where he's not. That is, unless he gains permission from Garcia, Fairey's use of his own rendering is limited to "editorial" uses, such as artistic display, political or social commentary, satire, and so on. On the other hand, "commercial uses" require Garcia's consent, such as when the image to advocate a product or service, or to promote an idea, including political or religious points of view. These are the types of uses that define "commercial use" as described by most state publicity laws. Granted, publicity laws and copyright laws are different, but the definition of terms are consistent.And herein lies the ultimate question: is the Fairey "Hope" poster a form of protected political speech, or a commercial use? As Friedman points out, political speech is at the heart of the First Amendment, and people's right to express themselves--especially on matters of politics--is always given deference by the courts.While a true statement, it's not quite that simple. Just because the Fairey image has been used in a political context does not necessarily imply that it's "political speech." And even if it is, the greater question is whether you can appropriate anyone -- or anything -- as a tool in that speech. For example, if the Fairey image were of a recognizable factory worker holding a hammer, and that person was an ardent Republican, we can be very sure that this person would sue Fairey for suggesting that he was an advocate for Obama. And the courts would not even begin to entertain the notion that this use of the image was "protected political speech." The First Amendment has its limitations, and this is such an example.Although "property" (such as a copyrighted photograph) does not en[...]

Getty and Flickr: Prophesies Coming True?


People have been emailing me copiously, asking for a statement in response to the new relationship between Getty and Flickr, where Flickr members and visitors can work with each other through a new program with Getty Images called “Request to License”. The details of this program are listed here. From that page:When a prospective licensee sees an image marked for license, they can click on the link and be put in touch with a representative from Getty Images who will help handle details like permissions, releases and pricing. Once reviewed, the Getty Images editors will send you a FlickrMail to request to license your work, either for commercial or editorial usage. The decision to license is always yours.Why are people asking me about this?For years, I've been proposing that precisely this model be implemented. Most of my blog entries in 2007 and 2008 articulated this very model. The first was on Feb 13, 2007, in an article titled, "The future of photo sharing sites and agencies". There, I predicted the inevitable convergence between companies like Getty and Flickr:I believe it will invariably happen that major photo agencies like Getty and Corbis can (and should) move into the consumer market. Consider what would happen if major stock agencies expanded their businesses by opening the flood gates and letting everyone in. By removing the barriers that require photographers to "submit images," and having a separate portion of their sites be entirely open, much like other photo-sharing sites are, they would give more options to buyers, and provide more opportunities (and greater incentive) for photographers to join at all levels. Getty owns, which is a microstock agency that sells images for much less, but this is not a consumer-based, social networking style photo sharing site like flickr is.The key here is in italics: microstock agencies are not social networking sites, they are therefore limited by both buyers are sellers than the social-networking sites. My premise for this logic is based on my years of research showing that 80% or more of licensed images is peer-to-peer, directly between buyers and photographers, not among agencies. You can read this research in the article, "The Size of the Photo Licensing Market"). The summary of that research is this basic truism: Most buyers find images on non-stock agency websites.On Feb 18, 2007, I wrote how the photo-sharing and social-networking sites can capitalize on this opportunity in an article titled, "Two-Phased Approach to photo-sharing/licensing model". I said:Phase One of this business will be where a photo-sharing site merely allows visitors to license images directly from the site. Phase Two will involve the distribution of the same photo assets to other sites, much the same way online ad sales are hosted (or "published") on other websites. ... For the sake of discussion, I'm going to assume that the approach ultimately adopted is the one I've suggested in the past: make it pure and simple by giving the user a toggle for setting whether his photos are (or aren't) permitted to be "sold".And that's exactly what Getty and Flickr are doing now. Over four years later.You may note that I said there was a two-phased approach. That second model will eventually become part of more photo-licensing business models. (In fact, it already exists, but among companies too small to get anyone's attention--partly because the technology and business models they've adopted do not properly understand and implement the true nature of photo licensing, copyright[...]

Model Releases: Pro Models and Their Agencies


I got an interesting email from a fashion photographer that warrants some discussion: A model agency booker recently wrote to me saying: "But if you want to use the images for editorial use, we ask that you ask us first before agreeing to the usages used for that magazine. In fact, all magazines require releases...even for editorials. That's where the release will come into play."First, the quote that you included from the agent is a bit misleading, though he might not be aware of it. That magazines "require" releases doesn't mean that they "are required" to have a release for publication. It just means that many magazines have a policy to only publish released images, even though one isn't actually necessary.As I will discuss, this creates more liability for them, not less. It's also a great disservice to the industry because it perpetuates incorrect information about how and why model releases work.First, let's talk about context: Fashion photography is different from grab-shooting in the street because someone is specifically asked to pose in a controlled and staged environment, and to take specific pictures for a specific purpose. The model is not subject to a condition where he or she can be photographed "without being aware of it," like on the street. Instead, the model is only willing to do it in exchange for something. For example, money.Now, if it were just money, that's one thing, but in professional fashion photography, it is often the case that models also insist that you (the photographer) and your assigns (those to whom you license the images) only use the photos for a specific purpose. It's the phrase "..and your assigns..." that you will need to think about. I'll bring it up again soon.What makes this situation different insofar as model releases are concerned is that the model has stipulated the uses of the images -- not the photographer. Thus, the photographer is now assuming liabilities. This is atypical for most photographers, who are used to being the ones who spell out the terms of the model release (and ask the subject to sign it).In this inverted photographer/model relationship (from the norm), focus is now centered on the models themselves: they are the ones that are seeking this case, their professional careers. They don't want images of themselves used in ways that might compromise their modeling relationship with particular designers, advertisers, or even editorial relationships. They also need to control how they are portrayed in the press to the degree that they can. In this case, if they are going to be wearing clothing that would not bode well in publications, they would not want those photos to be published. That's why they are eager to assure that the photographers that take their photos are restricted in what they can do with the images.If the model has an agency, those agencies would (should) instruct their clients (the models) not to attend photo sessions without requiring the photographer (or other agents there) to sign the agency's release.Now I get back to the quote from the above agency representative, where he says, "for editorial use, we ask that you ask us first..." He can't enforce that without strictly saying so in the contract the photographer signs. That's why he says, "we ask..."But, if he truly wants to enforce that policy of "ask first", he should stipulate this requirement into his template model release agreement that photographers sign. An even stronger provision is simply to state up front that the photos "can only[...]

2009 Year in Review: Web Optimization


In this second segment of my series, "2009: Year in Review," I discuss issues related to managing my web presence. Some of these methods directly result in income, such as advertising dollars, whereas others indirectly affect income, such my ranking in search engines or by directing traffic towards monetizable content. Nothing discussed here addresses my actual sales and licensing methods, which was addressed in Part 1 of this series. Web Traffic and Advertising Traffic to my site has marginally increased by 16% from the same time last year (2008). More specifically, I averaged about 15,000 visitors a day in 2009, but the number would have been much higher had it not been for a technical mis-decision I made during the summer months that dramatically dropped my rankings, which had to do with "keyword stuffing", discussed later. Normalizing for that, my traffic has been pretty steady at around 16-18K unique visitors a day, compared to 14-15K/day in 2008. (Stats can be seen here.)While that may sound impressive, it's not that simple. There are a number of devils in the details, and sifting through the data is only half the battle. For example, the bounce rate (the rate at which people leave my site after viewing the first page) rose to 8.5%, and the average time on site dropped by 11%. In other words, people are leaving my site sooner than before.One would think that this is a bad thing, but there's other data that suggests otherwise. For example, advertising revenue more than doubled; in some cases (some pages and topics) tripled and quadrupled. All those people "bouncing" away without spending time on my site are clicking on ads. For 2009, advertising revenue jumped to represent 17% of total income.One might say that I'm losing potential buyers to advertisers, but that's not what's going on. Most of the ads on my site are not for photography prints or licensing, which is the lion's share of my online transactions. That is, people are clicking on ads because they decidedly do not want anything I have to offer. I don't care that they leave; it just so happens that they're paying me a effective "exit tax." Or rather, the people who are getting my traffic are paying that tax.Indeed, this turns out to be mutually beneficial: advertisers whose own sites don't rank well for some search terms, actually get a lot more relevant traffic from my site than they would if they paid to get onto Google's search page directly. That is, they'll pay ten cents to a dollar per click to put an ad on my page (through Google's adwords program), compared to twice or three times that much to put the same ad on Google's search results page. They may not quite get the same number of total traffic, but they'll get much more relevant traffic that converts to revenue if they place those ads on my site (or any of the other top-ranked sites). This kind of advertising-indirection costs them less, they get better bang for the buck. Best of all, I get a cut of it. :-)I should point out that this isn't always so straightforward for advertisers, because targeting a specific site can be costly (in the form of lost opportunity, not necessarily money) if that site isn't consistently well-ranked. That is, if they target a site that appears to rank well sporadically (because their content changes), they could get a boost of traffic for a short time, and then go dark. Since my site has been around for a long time and is generally stable, this risk is not a concern.In fact, many advertisers come direct[...]

2009 Year in Review: Content Remains King


In this first segment of my series, "2009: Year in Review," I discuss the role content has played on my business.As I've preached since the dawn of my writings on the business of photography, the best way to make money on the web is to create as much content as possible. Having more inventory to sell is only a part of the benefit—indeed, a much smaller role than people may think in some cases, as I'll articulate shortly. The main reason content is so important is because it's the nucleus of all other revenue sources and business activity. Content plays an important role for search engines, which not only allow people to find you, but provides other sites with links. As links build, your search rankings increase, which increases traffic, which feed these various revenue streams. I discuss this principle in general in my chapter, Web-based Photography Business, which is part of my series of photo business books. (I discuss 2009's numbers more specifically in the next article in this series.)As a general business model, I follow my own advice to others: Almost everything you do should ultimately result in new, monetizable content. Once you have it, you can make money with it in perpetuity, with very little (if any) additional overhead or resources. Outside of some initial short-term costs and overhead, your business can scale up to virtually any size by merely adding new content. Whatever short-term income or expense that may be involved in acquiring new content, it should be regarded as part of your investment in the future. (That is, the short term pay or income is less important as the long-term potential.) I'll get back to this subject shortly.Though people monetize their content in different ways, I happen to choose to be the exclusive licensor of my own content. That is, I do not use stock agencies or other distribution models. I usually recommend this approach to people as a default assumption when considering entering into the photo industry, but one can certainly leverage the sales resources of agencies, if done properly from the outset.Given that I have over 60,000 images in my online archives now, and the manner in which content can be leveraged so easily, it may come as a big surprise to learn that licensing of still photography only represented 5.8% of my total revenue for 2009, compared to 16.9% in 2008. But don't take this bad news.First, still photography (the majority of the content on my website) is what I call the "gateway drug" for my clients. People discover my site primarily because of my still images, and end up making more lucrative transactions later. The fact that still imagery licensing has dropped as a percentage of total revenue is more due to the much larger increases in other, more lucrative revenue streams (discussed later). This further underscores the importance of having a robust and diverse business model that can survive (and even benefit from) shifts in the economy. In this context, the recession may have caused some people to spend less, but it also caused others to shift their spending towards me. Those "others" is a much larger population, even though each spends less on a per-transaction basis.For example, my fine-art sales represented 19.5% of my revenue, up from 12.7% in 2008. This can be entirely explained by the economy and shifting demographics. Buyers on my site in 2008 and prior had been low-end art collectors and enthusiasts (see Selling Photography Prints), whose average purcha[...]

Understanding Economics (for photographers)


Of the emails I got from people in response to my article on the Prisoner's Dilemma (explaining how human behavior affects economics), two warrant public comment. One person said:Photographers that take $200 assignments hurt themselves, disproving your thesis that people act in their own self-interest.Ummm... How is it that we've established that they are hurting themselves? I personally have done assignments for $200 that involved spending 15 minutes photographing an individual for some personal use of their images. That's $800/hr., much better than most high-profile lawyers get. I've also done assignments for $200/day, but allowed me to get images that I was able to license for tens of thousands of dollars.The truth is, such vague and open-ended propositions are, frankly, silly. Even entertaining the proposition of such singular and simplistic truisms about economics hardly warrants serious discussion. Therefore, those who do engage in these discussions are usually those who have the dual tendency of (1) believing the premise, and (2) of using it for political motivations. This creates a feedback mechanism where you do more of it... repeatedly and more passionately. The most immediate dividend is bolstering one's own image among the faithful. (See my article, The Economics of Controversy.) It's not that people who dispel inaccurate economic theories are always intentionally deceptive. But there is a point where their own mental model of how things work becomes the filter by which all actions and statements are interpreted. If their basic premise is faulty, then this skews their perception of reality. Most importantly, it affects their ability to extrapolate simpler ideas into more complex ones, which would otherwise allow them to come up with effective economic forecasting tools. Is it really true that accepting $200 hurts yourself and the rest of the photo industry? Or does your intuition tell you that this is probably a bit simplistic? How does it strike you that most pro photographers believe this statement to be true?And this leads to the other email I referred to:Are there any important essays or textbooks that you think is worthwhile which distills a lot of what you have learned [about economics]?I'd ruminated about this continually since I got it, and I'd even started (and discarded) several lists. Every time I come up with a list of great resources that help establish fundamentals, I then put myself into the mindset of an average reader (esp in the photo community), and I realize that it's not quite right.For example, one of the items on the lits that I keep adding (and then removing) is PBS Newshour's Paul Solman. He is a "behavioral economist", and his continuing series on the Newshour program ("Making Sense" [of Financial News]) is must-see TV for anyone that wants to digest complex subjects down to the basics. To me, this is the easiest and most effective way to learn the fundamentals of economics, whether of a financial nature, or a personal nature. Yet, every time I send someone a clip from the show to explain things they don't understand, I usually get a response that their eyes glazed-over.So, how do you teach economics to people who are predisposed not to understand it?And that's when it finally dawned on me: There are two barriers to understanding economics. The first is to dispense with preconceived conclusions. Yet, this is often a paradox in itself. If your livelihood and financi[...]

Reminder: Cooperation is an Illusion


Before I get to my series on 2009 (Year in Review), I feel compelled to repost an article I published in May 2007 titled, The Photographer's Dilemma: To Cooperate or Not?I feel compelled to post this now because of a new swell of populist rhetoric in some blogs and discussion forums that preaches that photographers should stick together, and not take low-fee jobs (or work for free), because such actions bring down the collective value of the photo industry and encourage clients to expect more for less.This very idea is pleasing to believe, and always goes over well with pro photographers, but it runs counter to many proven economic principles. One of the pinnacle truisms of economics is called The Prisoner's Dilemma, which not only shows that such cooperation never helps, but it actually harms those who cooperate more than those who don't. This famous experiment demonstrates the basic principle:You and a friend have robbed a bank. You almost get off scott-free, except for an old lady who "thinks" she saw you, but isn't quite sure. The police round you two up, but because the witness is uncertain, you and your friend agree that the best thing to do is not confess anything. That is, by cooperating, you can each assure that you will both be protected. But, the twist is that the police place you into separate cells, and interview you separately:"If one of you testifies against the other, and the other remains silent, the betrayer goes free, and the other gets 10 years in prison. If you both stay silent, we can't convict you on the bigger sentence, but we can get you on lesser charges, giving you six months in jail. If you both betray each other, then you both serve two years."Each of you has two options: stay quiet, resulting in a lighter sentence for each of you. Or, defect from the pact. The table below illustrates your options: Prisoner B Stays Silent Prisoner B Betrays Prisoner A Stays Silent Each serves six months Prisoner A serves ten years Prisoner B goes free Prisoner A Betrays Prisoner A goes free Prisoner B serves ten years Each serves two years Because you're in separate cells, you have no idea what your friend is going to do. But here's where your mind plays logic games. If you knew your friend would stay silent, your best move is to betray, because you then walk free instead of receiving the minor sentence. If you knew your friend would betray you, again your best move is still to betray him, as you receive a lesser sentence than by remaining silent. Of course, your friend will think the same thing and therefore also betray you. Yet by both betraying the other, you both get a worse sentence than if you both stayed silent. So rational, self-interest plays into each of your decisions, making you both worse off than if you'd "cooperated" on the agreement by staying silent.This experiment illustrates the most fundamental cornerstones of economic theory and has been tested in many different contexts, conditions, and demographics. It was originally conceived in 1950 by Merrill Flood and Melvin Dresher working at the RAND corporation, and became the basis from which John Forbes Nash derived his famed "Nash Equilibrium", which earned him a Nobel Prize for Economics. It has since served as the foundation for most businesses, governments, social policies, and many other aspects of everyday life because it reflects innate human decision-making. So long as there is no int[...]