Saturday, December 4, 2010

Photographer Ron Chapple Interview


Ron Chapple on assignment in the Yukon at minus 28 degrees with his new Aerial Photography business..

Industry Leading, Innovative and Super Successful Stock and Assignment Photographer Ron Chapple Interviewed:

Ron, you got an early start in photography even opening your own studio right out of college. You jumped into stock at a good time back in 1992, and embraced Royalty Free at the right time as well.  In fact, you built up a significant collection, Thinkstock, which was acquired by Jupiter images.  Now you have iofoto, which I hear is a very strong micro collection. 

John, I really appreciate the opportunity to be interviewed for your web site. Stock Photography has been a good business over the years and provided a wonderful lifestyle, however, the industry is changing rapidly and we should all be re-evaluating our business strategy. You are providing a valuable resource to the photographic community by sharing your thoughts! 

I would venture to say that part of your success in photography is due to your openness to new ideas. Would you share your views about that with us?

Change is the only thing that remains constant. (How's that for a cliché’!) Before stock, images were acquired via assignment. Waiting for the phone to ring, sending a bid, shooting the assignment, and waiting to get paid was the business process when I started my career 30 years ago.

Within a few years, art buyers began to source images on a Rights-Managed basis. At the time, a studio strategy of creating images for sale as Rights-Managed stock was revolutionary, and controversial! I had more than a few photographer friends tell me that shooting stock was wrong. Fast-forward to current day and RM is considered the backbone of the stock industry!

With that perspective, it was just a matter of time before new stock licensing models would develop. The need for images never changed, just the pricing and delivery options. Microstock is just another business model.

I believe that if you have committed to making stock photography your primary revenue source, then you need to test and evaluate every new business model. The decision is simply to determine the business that works best for you; all choices are valid options.

I also would add that "stock" should encompass more than just licensing the rights to your images. While "Assignment" is a service business, "Stock" is a manufacturing business. There's this crazy dude named John Lund that makes crazy pix of animals doing crazy human things, then he sells them as puzzles and posters. This is manufacturing and a variation of licensing your images as stock. John smartly figured out how to extract licensing revenue from the retail end user instead of the art buyer.

You have as much, if not more, experience in pretty much all aspects of stock photography as anyone. I don’t think anybody can really say what the industry is going to look like five years from now. Many are saying the ride is over, and a few are saying that new opportunities are on the horizon.  Where do you stand on that?

John, I'm the eternal optimist. At best, the industry is in a significant transition to a business model where everyone has enough revenue to make a successful career from shooting stock. Right now, there's too much power on the aggregator/distributor side. The "agencies" decide what images to upload, what fees to charge, and how and when you get paid. While this has always been the general state of business, there was much more "give & take" 10 years ago. Agency and production strategies were planned in harmony. For example, I collaborated directly with FPG International on creating the first images of multi-ethnic children, and the first images for the gay/lesbian marketplace. (FPG was integrated into the Getty Images collection in the late 1990s.)

I do believe the ride is over for photographers (like me) who produced high-end RM and volumes of high-end Royalty-Free material. The revenues from these licensing models and from microstock cannot support the infrastructure we built to manufacture these images. While outsourcing helps turn retouching, key wording and uploading into a variable cost, the overall revenues are much lower. Our high-end production model required enough profit to take a few hits in a downturn, or to fund research into new image styles and delivery processes. We always budgeted 20% of our production expenses to shoot crazy off-the-wall images just to see how the market would react.  Those days are long gone.

There are still a few shooters who may be able to make this work, but my guess is that margins are so tight that these photographers are extremely careful about the types of images they produce and the production investment. Ten years ago, investing $10,000 into a single day of production was a no-brainer. I think you would find very few shooters willing to invest the same funds today.

Can you share your microstock experience with us, and what you have learned from it?

First, I think microstock is a wonderful opportunity for the thousands of new and established photographers who want to earn income from their images. Stock can provide a lifestyle that offers creativity and flexibility. The stock business was a huge success for my business career, and I am supportive of this opportunity for any photographer.

My studio had early success with microstock through our "iofoto" collection. While this 17,000 image collection continues to provide revenue, the numbers have dropped over 50% in the last 18 months. While some of this might be a result of the economy, I believe that most of the revenue downturn is from the overabundance of images. When we started, most micro sites only had 1,000,000 images. Now those same sites have over ten million images! The statistical chance of making a sale has decreased by 90%. Three years ago, in 2007, we made the tough decision to eliminate our in-house retouching staff, to selectively produce images at lower costs, and to outsource the workflow. All of our cost reduction measures were to no avail- revenues continue to drop, and microstock is no longer profitable for our business.

With Change being our studio mantra and discovering that microstock was not sustainable in the long term, we looked for new opportunities. As a caveat, we did make the decision to redirect our revenues to a new business instead of marketing our "iofoto" images. Perhaps if we had been more diligent, we could have propped up our microstock revenues for a longer time.

What strategies would you recommend for those who want to pursue stock photography during this transition phase of the industry?

1. Do not rely on stock as your sole revenue source.

2. Aggressively explore other ways of extracting licensing revenue from your images through product sales, bulk licensing, or value-added services.

3. Keep shooting! Produce some images for stock, but create mostly images for yourself. Don't lose sight of why you wanted to shoot in the first place.

You have experience with Rights Managed, Royalty Free and Micro.  Can you share your insights and ideas about where those different pricing structures are headed, and if any of them, all of them, or none of them offer long-term possibilities?

I honestly have not spent much time thinking about how these structures will evolve. I do think the "low price image" and crowd-sourcing are here to stay. My only conjecture is that once a search engine gets involved in licensing images, many of the current distributor channels will be challenged to offer a compelling reason for customers to visit their web site.

You are once again off into a new area of photography with your aerial business. Can you tell us about your new venture, how it came about and how it is working out?

Ron prepares for a flight in Hawaii.

The Cineflex gyro-stabilized system, with the helicopter mounts, power supplies, monitors and record decks, is a $600,000 investment...a definite "barrier to entry"!

Route map of a flight over San Francisco.

Many people may not know this, but I have been shooting aerials as a sideline to our lifestyle stock for 25 years. When I first realized that the microstock revenue growth rate was not sustainable, I started to look at other opportunities. 

Stock was experiencing a 10 year downward trend of lowered prices and decreased percentage splits to the photographer with microstock being the newest iteration. Increased volume could only compensate for some of the loss in revenue percentage. My strategy was to look for revenues with a contrarian approach. I researched the market to find a niche that would have minimal competition, offer significant barriers to entry, and be somewhat recession proof. I asked the question "What is the most expensive type of project that a client could possibly commission?" The answers weren't hard to find... aerials or underwater work seemed to occupy the high end cost of the content continuum. With encouragement from a stock house, and a friend in the helicopter business, I chose to invest in a state of the industry Cineflex HD aerial video system. 

The Cineflex gyro-stabilized system, with the helicopter mounts, power supplies, monitors and record decks, is a $600,000 investment. If I was looking for a "barrier to entry" I had found one as financing required committing collateral, a second mortgage and personal guarantees. 

Business has been excellent. While we are still in a growth/investment phase, revenues have been doubling every year for the past 3 years. We hope to break-even in 2010 with tons of new opportunity on the horizon. We ended up investing over $2,000,000 with the purchase of 2 more systems, and new platforms to carry the Cineflex. Any new business will take 4-5 years to achieve success, so toughing out those early years is hard work, always painful, but absolutely necessary.

Most of the growth has been in the international market. In 2009, 60% of our revenues came from USA clients that needed to shoot outside of the USA, or from clients outside of the USA that required shoots in the USA or other countries. Export of the Cineflex V14HD is governed by the International Trade and Arms Regulations of the US State Department, plus we need ATA Carnets for customs, and Visas to work in certain countries. We rapidly developed an expertise in wrangling complex international projects. In the last 2 years, we have completed projects in Taiwan, Kuwait, Brazil, Costa Rica, Chile, Oman, Samoa, Nicaragua, and Canada. We commonly have weeks when all of our equipment and crews are outside of the USA.

And never say never… as a still photographer, I really did not think we would be involved much in video or technical fields. Now, our studio also provides HD video editing services and we utilize Google Earth for pre-flight planning, post-flight analysis, and accurate captioning. Our team has quickly learned entirely new skills that extend the value of our aerial filming services. 

For any photographer wondering about the future, I would add that "life after stock" is a rewarding experience. The lessons learned in the stock industry lends itself well to new endeavors.

Using photography to create a rich life is of particular interest to me. From where I stand you have always done a great job of that.  Is that just the way it has worked out, or is that part of your plan?

The lifestyle was the first choice. I always wanted to travel as a young photographer, but could not afford the expense. I decided that shooting "location work" might be the travel ticket I needed over 30 years ago. I invested in a shoot at the beach with two models to revamp my portfolio to target location work. Of course now, the travel can be way too much! In the past 10 months, I have only been home for a total of 5 weeks.

But remember, when you run your own business, you can't get fired. And those things called vacation are just a dream you will pursue for many years... This change has not been without personal emotion. I went a year without shooting a single image... but I had made the commitment to Aerial Filmworks, and aerial video was our new priority.

Sleep is truly a waste of time. The opportunity to experience a new location or new emotion trumps sleep any day of the week.

Do you have a current favorite image or video clip of yours that you can share, and tell us the story behind?

I'm less motivated by a favorite image than the process that happens along the way. For me, the excitement of discovery is when the frame comes together in front of you, and you have no choice but to shoot.  As a photographer, I'm not trying to make a statement, I'm just interpreting the elements and emotions that are being revealed, and the more variables the better!

Listening to the miles of stories from people in every walk of life are the true everyday pleasures of a photography lifestyle.

It appears that for you photography is very much a team process. Can you share your approach to putting together a team?  Is your team still in place?

The team approach allows new ideas to emerge and keeps the creative process fun! A business owner must always hire people way smarter than themselves. I have always been fortunate to be in the company of really talented people at Ron Chapple Studios. When we hire new team members, I'm the last person to talk with them, and then I'm only there to answer questions. A new employee must be selected and interviewed by all existing staff first. Only after they approve a potential new hire, will I meet with the person.

Are you still producing any stock images? Stock footage?

Yes, we are producing a few images whenever we find ourselves involved with a unique image opportunity. We will likely not submit any significant volume to our microstock distribution channels. Our "iofoto" collection already contains a good cross-section of lifestyle, product and scenic images. Recently, we have been exploring bulk licensing deals for 1,000+ images at a time that have worked out quite well. The net revenue per image is low, but the overall ease of the transaction and net income are worth the effort.

We are actively producing aerial stock footage for distribution through Corbis Motion. While revenues are on an overall upward trend, we are nowhere close to a break-even level. Stock footage is way harder to sell than stock images. There's many different acquisition formats, and directors are usually looking for specific camera moves and lighting in addition to the variety of technical options. Also, many of the networks require exclusive rights which necessitate original production. 

I think that as the Internet matures, image search becomes more effective, and photographers increasingly put their work online, direct sales may be one of those up and coming opportunities. Can you share your thoughts on direct sales?

Direct sales are the future. I can easily see the photographer percentage increasing to 80% or more as the "search engines" will simply charge a transaction fee. This will likely only affect royalty-free and microstock sales as licensing is simpler.

I'm not sure about direct RM sales. This seems to be a relationship business that may remain the domain of a few select agencies as well as photographers with unique collections.

How important is the Internet to your business?  

Absolutely critical. We get 90% of our new business through internet searches. We work in multiple time zones so email and online travel arrangements are essential. We use Google Calendar for all of our scheduling, and archive everyday documents on Google Docs.

We are late to the Facebook, YouTube and Skype applications, but slowly learning how to integrate these opportunities into the business. I have yet to become a Twitterer...

Do you put any effort into SEO?

Yes! Search Engine Optimization is the most valuable part of our online efforts. We avoid glitzy Flash sites, go text heavy and update our pages frequently. We have been able to maintain the #1 organic search result for our market. Over the past few years, we have also acquired several hundred generic domains to capture natural "type-in" traffic. 

We have tried print advertising in regional and national directories with lackluster results.

Do you have any last words of advice you’d like to leave us with?

John, that is way too much responsibility! 

There's a couple of things I try to keep reminding myself every day:

First, I try to never forget why I wanted to be a photographer- and while this may be either too simplistic or too esoteric, the opportunity to explore new landscapes... visual, geographic or emotional, continues to be a driving force. The camera is like a passport, not always to other countries, but to other emotions, and to new relationships. The camera can also deliver ugly Rorschach ink blot results, but I will sweep those under the carpet for now!

Second, stock photography is a business. The most creative photographer will always lose out to the better business person. This was a stunning revelation many years ago, and really frustrating. We must learn and relearn how to be better business people. Maybe that means we shoot some images for our soul, and others for money. Early on, I had a "business adviser" tell me that I needed to transfer some of my ego fulfillment from taking a good picture to running a good business. Those words also helped me understand that we as photographers should not be afraid of the business world. Business is just a game we need to play so that we can enjoy our lifestyle.

Thanks again John!
There really is an end of the rainbow in Ron's sights!

Just another day at work for Ron Chapple!

Filming Hawaiian Airline's first airplane off the coast of Oahu..

Ron's Aerial Photography Business: http://www.aerialfilmwork.com
Ron's Web Site: http://www.ronchapple.com/

 

15 comments:

Marco Venturini-Autieri said...

The most inspiring article about photography business I have ever read.
Scary because challenging, inspirational because different.
Thanks for posting.
Marco

John Lund said...

Thanks Marco!

Anonymous said...

Very good article, this Ron Chapple post! Very sober. Thanks for posting it, John!

Anonymous said...

I just noticed my comment said "Anonymous"... guess I didn't fill all the boxes!
Thanks, John!
Tanya Constantine
http://www.tanyaconstantine.com

John Lund said...

Tanyononymous!

Peggy Collins said...

I'm not in the stock photo business but found this interview quite inspirational nonetheless. In fact, John Lund, I just discovered your blog the other day and have to tell you that I've very much enjoyed and learned from all the articles that I've had time to read so far. Also your work is highly original and technically excellent!

John Lund said...

Thank you Peggy!

Joe P. said...

John... Great interview! Very informative. Joe Pobereskin

jon Feingersh said...

John--

Great interview, and a great interviewee. Ron is legendary in the field, and his comments are always inspiring.

You're doing a tremendous service to photographers with your interviews.

Best regards, Jon Feingersh

Bill Pennington said...

Great article and the first I can recall reading that was very "real" in the sense that it forces people to recognize that everything is changing all the time. This is true for everything in life and you have to be able to roll with those changes.

Great stuff!

James Benet said...

This is a great story and shows the hardships we Stock Shooters have to go thru on a daily basis. I am inspired by your courage to go the extra mile on aerial and hope to one day be able to jump into a challenging arena like that. Good luck in the future!

cutcaster said...

Great interview with really insightful questions. Ron really knows his stuff and was great how much he shared about his experience.

Ron or John (if you can), would you mind clarifying this strategy which I think I understand what you are doing but would love to hear how effective you think this actually is and what the strategy is that you deploy if you would share?

"Over the past few years, we have also acquired several hundred generic domains to capture natural "type-in" traffic."

Linda Matlow, PIX INTERNATIONAL (pixintl) said...

I love your blog. Again,very inspiring and I can relate to the branching out as I've always done that for more than just the money aspect.I think it's a great creative challenge to find fun new markets and opportunities when you are in a business you love!
I just sold out of my second entertainment/music photo book,HARDCOVER,Limited Edition.
I have about 5 more ventures slated for the next 2 years. Being a photographer is not enough to make a living,you really have to have your instincts honed for the future.
And even though my entertainment stock photo archive is for sale,I am still in the business,just branching out into new exciting(for me) areas!
Linda Matlow
http://pixintl.com

JeffGreenberg said...

"Stock footage is way harder to sell than stock images."

This gives me authoritative excuse for continuing not to use video function of my DSLR!

RC speaks from team point of view. From non-team point of view, it continues to be possible to start or realize comfortable full time income from just RM stock.

Ann Parry NY said...

Wise, pragmatic advice from Ron Chapple - great interview, John, the Stock Photo Guy :D

Having one's "stock" work go beyond just licensing rights is direction I see more and more fellow photogs go in. smiles - Ann

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