Nurturing a New Business at Adobe . . .
By
Ron Rovtar
Managing Editor
January 4, 2006
Listen to James Alexander talk about Adobe Stock Photos and you soon realize that you could be hearing the top person from just about any business start-up. New ventures, it seems, always exist in a bi-polar world of wonderful opportunities and difficult realities.
So, it is not surprising when the director of Adobe's new stock photography division admits that, "I'm a little frustrated by sales, actually."
But, it is no more astonishing to hear him use superlatives like "tremendous" when discussing future prospects.
"We see a tremendous number of people who are aware of the service and who are trying the service, " asserts Alexander. "The effort now is to move them from trying the service to buying from the service."
Adobe Systems, Inc., shocked the stock photography world last April when it announced the launch of Adobe Stock Photos, a service that lets creative professionals search for, download and purchase royalty-free stock imagery while using the Adobe Creative Suite 2 (CS2) bundle of industry-leading graphics software.
The approach represents a potentially significant workflow advantage for CS2 users who otherwise must exit their graphics program, open an internet browser, search several image collections, purchase an image, download it and then import it into a program like InDesign or Photoshop.
Adobe Stock Photos now offers some 575,000 images from numerous traditional stock distributors like Getty Images, Corbis, JupiterImages, Masterfile, Blend Images, Stockbyte and others.
Interestingly, the new Adobe division neither owns nor manages its own imagery. It keeps no digital files on hand and it transmits no images directly to potential buyers. Instead, the service accepts and organizes image requests from customers using CS2.
It sends the information to participating distributors who, under instructions from Adobe, transmit image previews to clients' computers where the images can be viewed using Adobe Bridge, a digital asset management program that runs alongside other CS2 software on customers' computers.
The approach favors no individual distributor. Images are displayed in a round-robin order alphabetized by supplier.
Creative pros can download comps, work with the images and, eventually, purchase high resolution versions, paying by credit card. Alexander said his company is looking into other payment methods, but said he could not provide details.
The basic system is fully functional, but Alexander and his crew have had, and continue to have, their work cut out for them as they try to improve the service.
Recently, the division announced creation of four "on-ramps," companies that provide individual photographers and small distributors access to Adobe Stock Photos.
In addition, the division wants to add rights-managed imagery and other kinds of stock, including flash animation, video and audio. And, of course, Adobe Stock Photos wants to improve its sales figures.
The new on-ramps may help solve a particularly vexing public relations problem.
When Adobe Stock Photos launched last April, the division relied exclusively on imagery from large and mid-sized stock distributors, leaving photographers and small image suppliers wondering if they would be excluded from the process.
Photographers were especially concerned because their earnings from stock photography have eroded significantly over the last five years.
Alexander said working with larger firms is necessary because only well-funded companies can create and implement the necessary computer programming for their databases.
To help solve the problem, Adobe struck deals with the four competing on-ramps operated by Getty Images, IPN Relay, Image Source and Masterfile.
"When you create a situation like this, people go and get their bids," Alexander said. "What we didn't want to do was get in a position where one supplier becomes king of the on-ramps."
Alexander suggests that photographers and small distributors compare the deals before signing with any of the on-ramps. He said that more than 24 small distributors and an undetermined number of individual photographers are now exploring the various programs.
"We have seen competition," he said. "I don't know exactly what all of them are offering."
Non-disclosure agreements with Adobe make it difficult for the four companies to publicly discuss details of their respective contracts. In addition, Adobe has not disclosed how much money it keeps from each image transaction.
But, Alexander says Blend, a royalty-free company, joined Adobe Stock Photos through IPN Relay. He notes that IPN Relay, a division of the company that owns PDN (Photo District News) magazine, was created specifically to work with individual photographers.
While Adobe Stock Photos will continue to focus on royalty-free photography, Alexander asserts that "We are going to try to do something with rights managed this year."
He says Adobe "tried to stack the deck in our favor by starting with royalty-free photography, which is the fastest-growing area of stock photography and the most automated kind of stock photography."
"We're looking at how we can automate rights-managed," says Alexander. "Or maybe there's an unautomated way through partnerships. We're going to spend some time through the first part of this year considering options. I don't know if we will have something set this year, but we could be well on our way to planning something."
For Alexander, the big problem with rights-managed is producing a simplified approach that satisfies image buyers, photographers and stock distributors. Adobe wants all transactions to be computer automated, meaning they should be simple and free of negotiations.
Currently, rights-managed sales involve collecting a significant amount of information from each license buyer.
And there's a long tradition of bargaining over rights-managed prices. Many buyers feel unfairly treated if they cannot get 15 to 20 percent off the stated price of a rights-managed image.
At the same time, every stock producer and seller seems to have a different idea about how to tamper with this traditional licensing approach. Some want little or no change while others would scrap the very notion of managing rights. Most fall somewhere between the extremes, but even those in the middle can find a lot to disagree about.
"It's like trying to negotiate a peace treaty through the United Nations," says Alexander. "Every country has its views about what it wants to see and what it doesn't want to see."
"I think that what we are discovering is how complicated it is. It is frustrating for me because I want to do everything today."
Adobe policy prohibits Alexander from providing sales numbers, but he does note that the company has done a good job of publicizing the new service. He says awareness of Adobe Stock Photos among potential users (those who have already purchased CS2 software) is in the 80 to 90 percent range.
"That's fantastic," says Alexander. "Of that figure between 20 and 30 percent have have actually come in and conducted an image search."
Alexander expects a boost from Adobe's recent acquisition of Macromedia. The merger will bring new software buyers under the Adobe umbrella, which should result in more business for Adobe Stock Photos, especially if the division can keep improving its library.
Currently, he notes, " It is highly unlikely that customers will get nothing when they search Adobe Stock Photos. "We need to help buyers find the exact images they are looking for. If we can always have the image you are looking for, then you are going to come back.
"It's like running a start-up company within Adobe," says Alexander. "We're doing everything we can to run this business as a business."
"We are funded through 2006. Adobe has indicated that it is behind Adobe Stock Photos. They like to plant these tiny little seeds that will one day grow into big trees."
"Furthermore," he adds, "I know that what we are doing will eventually be incredibly beneficial for photographers and designers."
That's important, of course, since designers and photographers make up a very large portion of Adobe's customer base.
For the Adobe Stock Photos web page: click here
Adobe Systems, Inc. is at: http://www.adobe.com
