Original Source: Wired
“Claudia Menashe needed pictures of sick people. A project director at the National Health Museum in Washington, DC, Menashe was putting together a series of interactive kiosks devoted to potential pandemics like the avian flu. An exhibition designer had created a plan for the kiosk itself, but now Menashe was looking for images to accompany the text. Rather than hire a photographer to take shots of people suffering from the flu, Menashe decided to use preexisting images—stock photography, as it’s known in the publishing industry.
In October 2004, she ran across a stock photo collection by Mark Harmel, a freelance photographer living in Manhattan Beach, California. Harmel, whose wife is a doctor, specializes in images related to the health care industry. “Claudia wanted people sneezing, getting immunized, that sort of thing,” recalls Harmel, a slight, soft-spoken 52-year-old.
The National Health Museum has grand plans to occupy a spot on the National Mall in Washington by 2012, but for now it’s a fledgling institution with little money. “They were on a tight budget, so I charged them my nonprofit rate,” says Harmel, who works out of a cozy but crowded office in the back of the house he shares with his wife and stepson. He offered the museum a generous discount: $100 to $150 per photograph. “That’s about half of what a corporate client would pay,” he says. Menashe was interested in about four shots, so for Harmel, this could be a sale worth $600.
After several weeks of back-and-forth, Menashe emailed Harmel to say that, regretfully, the deal was off. “I discovered a stock photo site called iStockphoto,” she wrote, “which has images at very affordable prices.” That was an understatement. The same day, Menashe licensed 56 pictures through iStockphoto—for about $1 each.
iStockphoto, which grew out of a free image-sharing exchange used by a group of graphic designers, had undercut Harmel by more than 99 percent. How? By creating a marketplace for the work of amateur photographers—homemakers, students, engineers, dancers. There are now about 22,000 contributors to the site, which charges between $1 and $5 per basic image. (Very large, high-resolution pictures can cost up to $40.) Unlike professionals, iStockers don’t need to clear $130,000 a year from their photos just to break even; an extra $130 does just fine. “I negotiate my rate all the time,” Harmel says. “But how can I compete with a dollar?”
He can’t, of course. For Harmel, the harsh economics lesson was clear: The product Harmel offers is no longer scarce. Professional-grade cameras now cost less than $1,000. With a computer and a copy of Photoshop, even entry-level enthusiasts can create photographs rivaling those by professionals like Harmel. Add the Internet and powerful search technology, and sharing these images with the world becomes simple…”
http://www.wired.com/wired/archive/14.06/crowds.html
Contributors: Open SourceCategories: Industry Articles, SIG U Resource
SRC Type: Outsourcing, Sourcing Management