Crowdsourcing proves there’s profit in numbers

While crowdsourcing - harnessing a community of volunteers to collaborate on a large task (see Wikipedia) - has been mostly a testament to amalgamative power of the Internet thus far, some websites are finally starting to deliver a profit to their content producers. One major crowdsourcing player is Calgary-based iStockphoto. Described as the world's busiest image market, the micropayment stock photo company has 2.3 million registered members worldwide. "Most crowdsourcing sites don't have revenue associated with them beyond advertising revenue," says Kelly Thompson, iStockphoto's VP of marketing. "But many of our top photographers earn six-figure incomes."The three main categories of contributors at iStockphoto are photographers, videographers and illustrators, and prices for their work ranges from $1 for a blog-sized image to $15 for a double-page magazine spread, and $50 for a video. More than 98% of the site's members are shoppers, so the micropayments quickly add up for its 37,000 contributors. "As soon as an image is sold, royalties go directly into a contributor's account," says Thompson. "They can sit there and hit refresh to see the money grow - and they do." The company has grown exponentially over the last year, enjoying a growth rate of 5% per month, and as prices have dropped to as low as $1, the composition of its contributors and buyers has changed. Thompson says where in the past buyers were typically small graphics houses that didn't have clients with big budgets for imagery, small business owners who need imagery for flyers, ads, websites and PowerPoint presentations are now flocking to the site. "There are only a few thousand classic stock buyers in North America, but what's exciting is there are millions of small businesses out there that need imagery," he explains. "We hit a new market."Professional artists with day jobs are now taking notice of the site. Lise Gagne, a freelancer based in Québec City, was honoured in June as iStockphoto's top contributor for selling half a million images at the site. "I got fired from my old job at a design agency for spending too much time on iStockphoto, so now I do it full-time," she says.The company's recently-added video section is also growing strong, says Thompson. However, the composition of this market is different, as there's overlap between producers and consumers. "Videographers who have old clips sitting around doing nothing upload them so they can get paid," he explains. "Then other videographers who need quick clips can download them for $20.00 - it's less expensive then getting their own shots." He adds that while competition on the photo side is tougher due to the more than 2 million images on the site, there are only 60,000 videos, so it's a great time for videographers to jump on board.Last year, iStockphoto was acquired by Seattle-based Getty Images Inc., which is making additional forays into crowdsourcing. In June 2007, Getty purchased NY-based Pump Audio, which acts as a digital agent for independent musicians, connecting them with buyers in the mainstream media. Artists can license their music into productions without giving up ownership, while producers can discover new music that's pre-cleared for use in film, advertising and online projects. Getty announced in a statement that this acquisition is part of a larger strategy to integrate music with its imaging sites over time. In addition, Getty acquired Glasgow-based Scoopt, a media agency that helps citizen journalists sell newsworthy photographs and videos to the press. Scoopt acts as an aggregator and distributor of photographs and videos captured by eyewitnesses, and offers contributors 40% of the gross sales price for images that are licensed to media companies. "Citizen journalism is a growing phenomenon that started with the first pictures of the London bombing captured by camera phones," says Alexis Gerard, founder of San Mateo, CA-based Future Image Inc., which analyzes the interplay between technological innovation, changing customer behaviours and desires, and financial opportunities.Another company making forays into photojournalism is Vancouver-based NowPublic, which offers editorial content in addition to visuals. Unlike Scoopt, NowPublic is a full-blown crowdsourcing site built along similar lines as Wikipedia, and not just an aggregator or agent. "Compared with Scoopt, we're more like a machine that will do all the work and doesn't rely on personal relationships, and the pay scales are better," says Michael Tippett, one of a trio of NowPublic founders.Written accounts, images, video and audio clips are contributed by people at the scene of news events, and are assembled by about 100 editorial staff called ‘wranglers' into coherent pieces. NowPublic recently crossed the 100,000 mark in membership, and entered into an agreement with Associated Press (AP). "When Katrina hit, we had 2000 people in the area and we got footage before AP could roll its trucks," says Tippett. "We're working with three bureaus to build a system to support AP. Contributors get paid AP's rates for the visuals they pick up and use."Editor's Note: Calgary bloggers Kempton Lam and Nisan Gabbay have written an in-depth case study on iStockphoto. It was written last year but tells a fascinating story of this company's evolution from a free community site into one of Alberta's biggest edigital media success stories.

Crowdsourcing proves there’s profit in numbers

Broadcast | November 22, 2007

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