SAN JOSE, Calif.--iStockphoto, which helped pioneer the "microstock" market for inexpensive, royalty-free imagery, plans to launch an audio-licensing business Wednesday.
The Getty Images subsidiary already offers photography, illustrations, Flash animations, and video. iStockaudio was a natural extension--one the company's customers had sought, iStock Chief Executive Bruce Livingstone said in a speech here at the User-Generated Content Conference and Expo.
"We're introducing iStockaudio on Wednesday this week," Livingstone said. The company announced the iStockaudio plan last May, but the actual arrival was delayed by a suddenly necessary overhaul to the site's search system, he said.
Initially, the audio service--think background music or the sound of a shattering window--will be available through public beta testing. Interface changes are possible before the final launch, scheduled for the South by Southwest conference that begins March 13.
So far, there are about 10,000 audio clips at the site, Chief Operating Officer Kelly Thompson said in an interview. "There's a lot of pent-up demand," he added.
iStockphoto, and the microstock industry in general, is an example of what can be done to harness the power of large numbers of people. Many in the traditional stock art business have been displeased that a bunch of amateurs willing to see their work sold for less than $1 a pop are eroding their business. But the hard economic reality is that microstock companies have put images on the market from photographers who are good enough to sell a few images now and again, even if not good enough--or devoted enough--to quit their day jobs.
iStockphoto now has about 65,000 photographers contributing to the site. Because Getty Images went private last year, the company won't reveal its 2008 financial results. The results were better, though, than in 2007, when the company garnered $71 million in revenue and paid contributors more than $21 million for their work.
The company is, of course, a technological phenomenon. It uses the Internet not only to connect large numbers of buyers and sellers, but also to help them view and distribute digital photography. "When iStock really started to take off is when the Canon Rebel came out," making it "affordable to shoot really good digital," Livingstone said.
Getty Images, which has a more traditional rights-managed image-licensing business, has a program to try to recruit new photographers from Yahoo's Flickr photo-sharing site, a partnership Livingstone helped set up.
Ups and downs
Thompson and Livingstone shared some of the ups and downs of their business' history at the conference. The lesson for companies such as iStockphoto that rely on user-generated content: pay close attention to what users and customers are asking for. They were asking for video, for example, and that now accounts for 10 percent of the subsidiary's revenue.
The flip side is launching something people haven't asked for. Livingstone had the iStock Forumeter idea, for example. It let people label forum contributors as grouchy crabs, helpful superheroes, comedic clowns, and unconstructive trolls.
"The problem with this is, the community didn't ask for it, didn't want it, and it was too accurate," Livingstone said. "People didn't really want to know how they were seen in the forums. It was a flop. We got rid of it in about 30 days."
Another bad idea: the Buy Request program for setting up custom photography shoots. In the company's core business, "99.99 percent of our sales are done unassisted. This little brainchild was the exact opposite. We had to help customers 99.99 percent of the time. It just didn't work," Thompson said.
The company also has struggled to keep up with growth of its computing infrastructure.
"It's important to be wrong as often as you are right, as long as you learn from the mistakes," Livingstone said. And when things go wrong, it's important to tell your users you're sorry. "Sometimes, the community needs to hear you acknowledge that there was a problem and apologize for it."
Once, the site went down after a truck cut the fiber line to the company's headquarters in Calgary, Alberta. "We did manage to get a check out of the company that supplied the fiber optics. Instead of keeping it, we decided to disburse to the community--the people who would have sold photos. It wasn't a lot--maybe $45,000--but I think people really appreciated the gesture," Livingstone said.
"Mostly, we plan for a reasonable amount of growth. Too much bandwidth is costly, but not enough is a disaster, and we know," Thompson said. "Early in our life, we got a bit behind the curve, and it was tough to catch up."
The company pushes what the MySQL database software can do, but this year, it concluded that it just couldn't handle the site's search operation. So in what was something of an emergency, it rewrote it in the C programming language.
"Our search was failing. We had to put everything on hold, surgically extract search from our Web site, and put it back in," Livingstone said.
Now, though, instead of 30 overtaxed search servers, the company has a single machine handling the chore, with four backup machines to handle potential problems.
The company hopes that new software called Dexter, which lets customers license images directly without using the Web site, will offer further help. A Mac OS X version is in private testing with people who license many images now, and a version running on Adobe's AIR software foundation is under development.