Friday, November 6, 2015
Creative Business Wire - Do Not Pass Go
Today, Creative Business Wire, launches, billing itself here as "Creative Business Wire is a digital imagery news service that specializes in business photography, and only business: the economy, Washington D.C., leaders, trends and other business related images are produced on a daily basis by our stable of acclaimed professional photographers." On the eve of their launch, with just about 8,000 images pre-populated on their site, we talked for some time with their President and co-owner, Sandy Huffaker.
In a wide-ranging interview, Huffaker seemed to come off as hoping for the best, while not really prepared for anything else. When asked about his photographers, he said "I've wanted to get a certain number of photographers on board, which as actually been kind of a challenge...it's been hard, because it's kind of a spec agency", which is understandable. Not that he's trying to do that, but that he's having a hard time because spec agencies/models are bad. We dovetailed that question into a question about how he intends to differentiate CBW from, say, a Bloomberg. "I'm trying to sign on really talented, high quality type photographers", I want to hire these documentary photographers... and have them go out and follow around a cobbler or a fisherman...really try to mix it up..." When we asked "so, it's kind of like assignment work on spec", he answered "exactly, exactly. And I'll plan to send out a needs list every night. It'll be a little bit of redundant work. There seems to be three to five business stories a day. I want the photographers to self-generate their own assignments."
This didn't sound like a promising idea, at all.
(Continued after the Jump)
Huffaker then offerred up David McNew, one of his primary contributors. "I have this guy, David McNew, who's a former Getty staffer, he got laid off, he's in LA, editors love him." So we asked, "So, if editors love him, why would David go out and churn images to be a part of a $100 a month online all you can use service? How is that economicaly viable for him?"
"I think he believes in it", Huffaker said. "He believes in the model where, say, you get 100 subscriptions at $300 a month, that's $30,000 a month, split between 10 photographers, I think that's real income." Then, it seemed, to a degree, he realized the challenge of his argument, then offered, "I'm not crazy about having such a low subscription rate for downloads, but in my research, seeing how Getty is offering $30 editorial images, it's kind of, it's the only way I can see to do it right now."
Since photographers now have a choice of shooting their own stock, and putting them onto a platform like PhotoShelter and marketing to a group of clients, picture stories, as produced, we asked him about this, "how do you see this as different than doing this themselves with PhotoShelter, and doing their own marketing?" He answered, "I think what's going to differentiate us is it's a very hand-picked select group of people. I'm really banking on some of our name recognition. A lot of our contributors work for the New York Times and Wall Street Journal...when I go to the New York Times tomorrow, 3 or 4 of us already work for them..."
When we brought to his attention that the New York Times has their own syndication deals for images, and there are a number of images on the CBW site that have as the byline "...for the New York Times", and that this could be a contractual problem there, and further, that the NYT's contract (at least the last one we saw some time ago) precluded photographers from using the New York Times' name to promote themselves, he responded "they've never expressed that to me...I better go back and look at that, because I haven't looked at that contract in awhile."
Despite billing CBW as "specializes in business photography, and only business: the economy, Washington D.C., leaders,", and co-founder Robert Benson over on the Lightstalkers forum (here) writing "We are looking for photographers in NYC and Washington DC" for "a very specific type of imagery: business photos (economy, transportation, green, economy, jobs, energy, washington, etc)" Huffaker said of DC and political imagery "I'm not going to focus as much on the politics, you know, Washington, you know, AP, Getty, they all have full time staffers doing that. Another thing, I know if it was me, I wouldn't want to shoot that stuff on Spec...". yet CBW is asking just that of DC photographers, and marketing that as the objective on Lightstalkers.
As to overhead, Huffaker said "I don't have CEOs, no office, basically, you can do this from a computer. It was incredibly cheap to start this thing. I went through Photocore, which, they did US Presswire. It was basically $1,000, and about $150 a month to rent the storage.So, it's very cheap to start up."
When we asked "have you run any projections as far as numbers", he responded, "I think our yearly goal for the first year is 40 subscriptions, I think 100 would be great. We need to be able to produce 3-5 of these daily stories, I think, to survive."
We presented a scenario to him, off the cuff. Since it's not our role to be his accountant, we didn't have a definitive set of numbers, so we tossed out a few examples. He had said he would have two of his 10 photographers in New York City. So, we asked, keeping in mind his goal of 3-5 stories a day, and that at least one of those each day would come from NYC. So, with his two NYC photographers, that equates to 2.5 stories a week, or 10 a month. We then suggested that if they were to go the route of shooting those assignments for the AP, they'd get $2,000 a month from the AP. How much would CBW have to produce for them to get the same amount from CBW? We even walked him through the numbers:
You would have had to have sold about $5,000 of their images for them to get $3,500. That means CBW would have to generate $50,000 a month for each of the 10 photographers to see a gross revenue of $5,000, which they would then get their $3,500 from. Thus, since their model ranges from $100 to $300, a mid-point of $200 per subscriber would be reasonable for the purposes of this scenario. So, in order to get $50,000, CBW needs 250 subscribers, so each photographer can get their $3,500. When we then suggested that 250 subscribers is more than double the 100 he considered "great", that presents a problem. If 250 subscribers earns each of the 10 photographers a net of $3,500 for the month, then 100 would earn $1,40 a month ($140 an assignment), and, with an annual goal for the first year of 40 subscribers, that's $560 a month, to do 10 assignments, or $56 an assignment. It's important to note - the photographer contributing in NYC would have to do all 10 assignments, and hope that they had enough subscribers.When we presented this scenario, and asked him if he had run the numbers in some similar type of scenario, he said: " I haven't done kind of the math as you just did...I am so in the dark right now. I think we could get anywhere between 40 and 250. I'm feeling it's almost a shoe-in we can get, we have a list of over 4,000 publications, and we have a full-time salesman who's going to be on this." He then went on, "You know I don't know if it's proven or not, we worked hours on just trying to find some kind of formula ...I have to be honest, this model isn't proven...I'm not super experienced when it comes to the numbers stuff." Well, that's certainly a vote of self-confidence, in the eve of the companys' launch.
When we asked Huffaker who would be doing sales, he responded "A photographer who's worked for Zuma, he's been in their system awhile, so I can be out shooting. His name is Jerod Harris. He's kinda new, he's done some entertainment, so I am monitoring his shooting, he's very driven. " When we asked about him being full time sales, or part times sales part time shooting, since he has images on the site himself, he said "he's going to be fulltime sales....I'll let him go out and shoot the brands, you know, we have this brands link..." So, he's going to be doing both, it seems. Certainly, from the images on the site, he's got a lot there.
He then went on about the number of photographers, "right at this minute we have five really commited people." He then pointed out "I've officially stopped accepting new photographers". Whew, I'll take that as a sign that no one else out there is going to be subjected to this bad deal. He said he cautioned everyone he's signed already, "this is something on the side of your daily assignments...don't quit your day job...I have no idea if it's going to fly or not."
I do. It's not.
Near the end of our conversation, he offerred, "Come back in a month and we'll see if this thing is going to fly or not." Ok, I'll start with your website in a month, to see if anyone other than you, McNew, and Robert Benson, are still contributing images. When Huffaker said "Im a little inexperienced, to be honest, with this", and coupled that with a comment early on in our conversation he made - "my biggest fear is dicking over photographers", I say, stop now. Do not pass go, do not collect $200 from even a single client. Use the platform to license stock on an image-by-image basis, as the subscription model only profits the agency, not the photographer. Oh, but you just opened an agency, and are also one of the photographers too. Now I see.
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