Fast Company

Can Photosharing Be a Sustainable Business?

Photosharing is doomed as a business.

I am not a photographer. My family and I have agreed that I'm a good person to document things, because I'm always present and ready to shoot, but most of my photos are either undistinguished (crowds of people with no central figure to draw interest) or downright bad (lighting so wrong you can't see the subject's face).

And yet, I have Instagr.am, PicPlz, Flickr, and PicPosterous on my iPhone. I take photos all day long and inflict them on my friends. I have to decide which of these apps gets the honor of my latest experiment at color and light.

Worse, most of my photos are of babies and dogs. And not yours. Mine.

And I am not alone. There are millions of bad photographers with mobile devices running around documenting everything from children to street crimes and putting those photos online somewhere for safe keeping and sharing.

Social sharing of photos has a certain pleasure to it. But as I watch Instagr.am grow almost overnight to 300,000 users because you can apply filters to bad photos and make them look worse (they can now be yellow, green, sepia, etc), I wonder where the business model is.

What has happened to former photo sharing services?

Yahoo photos got shut down when Flickr emerged. Yahoo bought Flickr, and all my old photos went to Flickr. But then Flickr didn't advance fast enough, and many other services emerged.

Each service has a new technology or a new feature set. But none seem to have sustainabie business models (except perhaps SmugMug, which charges a subscription fee and offers a slightly different set of services, making it appealing to professionals.) Flickr has Flickr Pro, but only a small number of users elect it. In the Flickr forums, I saw a spirited discussion on whether to renew a pro account as Flickr tries to further monetize a service that probably costs a significant amount in bandwidth. The users were angry that they were now being charged to store more than 200 photos.

The question is, what will people pay for? They used to pay for the developing and printing of film, and for the film itself. You paid at both ends. Now, it's a bit more complicated, because there is no "deliverable," nothing an ordinary consumer can see and touch.

So here's where my photos are today: on my hard drive, first. Backed up to Carbonite and Mobile Me. Shared on either Flickr, SmugMug, Instragr.am, Facebook, or PicPlz, and sometimes posted through PicPosterous to one of my blogs.

They are not aggregated, catalogued, or any more easily accessible than they were when they were in the box of prints thrown in a draw, or the mountain of envelopes full of photos picked up from the drugstore and forgotten.

We're no better off with our photos, despite new technologies. than we used to be. I still can't find that picture of my daughter taking her first steps. Let's see, is it in the drawer, or on the drive. No wonder few customers are paying.

All these new companies will have to be acquired. They won't be able to stand alone. And if/when they are acquired, will it be for their technologies? That's a good thing for the acquirer. It's the"buy" answer to the "build.vs.buy."

Or will they be bought for their teams? Those will be some very expensive engineers.

One thing is certain to me. In five years, none of them will stand alone.

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4 Comments

  • Tom Munro, CEO Photobucket

    Francine,

    Photobucket merged with Ontela (leading provider of award-winning imaging services for wireless carriers) last December to combine our operations and, at that point, we were no were no longer part of News Corporation (MySpace) – in fact we are a standalone company, although News Corp remains a strategic investor. Over the past year, the new Photobucket Corporation has made significant investments in our mobile applications and we are seeing a corresponding increase in the number of photo uploaded from mobile device. Our users upload more than 4 million photos and videos to Photobucket.com every day and we've seen a 400% growth in mobile uploads in the past 10 months alone. Obviously, mobile is going to continue to play a larger role in photo and video sharing.

    As for Facebook – they are a partner; it is a top sharing destination for our users. Our use case is slightly different from than Facebook’s though. Not only are our users sharing to Facebook, but they’re also uploading to MySpace, Microsoft Messenger, Blogger, Digg, Hi5, Orkut, iGoogle, Blooger, LiveJournal, myYearbook, personal websites, CraigsList, eBay and more. There are multiple places they want to share their photos, and not only do they want to share, but then want to edit and personalize before they share, which is where we come in.

    The bottom line is, we do feel that online and mobile photo storage, editing, personalizing, back-up, and sharing is a sustainable business; in fact we have been very successful in the market since 2003. As for the newcomers, we do believe they standalone mobile only photosharing services have some big hurdles to overcome.

    Best,
    Tom Munro, CEO of Photobucket
    www.photobucket.com

  • Francine Hardaway

    Tom, both you and Josh reference the older models of photosharing, not the new mobile apps. Those new apps, the ones getting all the attention, seem to work the least well, and also are entering a crowded market. Photobucket is really part of MySpace, is it not?

    And as for Facebook, I think it DOES play the role of platform, and eventually all the little apps I talked about will have to deal with it.

    Still, I don't see users paying for things in photosharing, and therefore I don't see these as standalone busineeses.

    . There has never been an argument about whether people want to upload and share photos -- that's been assumed since 1996 when I was at Intel and we did the original deal with Kodak to develop digital imaging. It's just a question of who will pay. In the case of Photobucket, am I incorrect in assuming that MySpace absorbed Photobucket as a tool to bring users to its ad supported network? Please correct me if I am wrong.

  • Tom Munro, CEO Photobucket

    Francine,

    This was an interesting article and your frustration really mirrors what we hear from our new customers before they start with Photobucket. Your assessment that there is disorganization and fragmentation when it come to the organization (or not), archiving and sharing of video and photos is correct; however, our customer data tells us that, not only is there still an interest in photo and video sharing sites, but that the new technologies offered by mobile phones and social networks are actually increasing the amount of files uploaded to sites like ours.

    The growth of mobile is a great example. Photobucket users upload over 4 million images a day from the web, smartphones, and connected digital cameras. Those same users download over 2 million images a day to their computers, tablets, and mobile phones. Although mobile is growing rapidly, the majority of users still want to be able to view, edit, manage, and share images and video via the web. In addition, users want to be able to view images from consumer electronic devices; such as internet connected TVs, digital picture frames, and tablet computers. Photobucket recognizes those multiple user activities, often happening simultaneously, and we strive to be the ideal home for all photo and video content to live and be disseminated from.

    Even as we make advances in imaging technology there is still going to be an onus on user to organize, tag or manage their own images – but we aim to make this as easy as possible and our users agree! We'll do our best to continue to make it easy for them and we hope to keep advancing our services to adapt to their behavior. In the meantime, we find it exciting that so many people are capturing memories and sharing them with fervor.

    Best regards,
    Tom Munro, CEO of Photobucket
    www.photobucket.com

  • JoshGrot

    While I agree that photo-sharing space is going through a good deal of disruption and that many of the companies mentioned offer incomplete point solutions and will likely fade away via acquisition or attrition, I don't think that it's fair to say that the business of photo-sharing itself is unprofitable, bereft of a sustainable business model or doomed (at least not doomed for the reasons you mention--more on that below).

    Three companies that you didn't mention (Shutterfly, Kodak Gallery and Snapfish (a division of H-P)) collectively account for what I estimate to be approximately $750M to $1B in annual revenues, and Shutterfly itself, a pure play photo-sharing company, has a $1B market cap. While not indicative of a HUGE industry, it's not a trivial one either. And it's growing.

    And while these companies still rely on photo printing to drive their core sales, their growth businesses are in new product, high margin areas such as photobooks. Further, they are embracing social media sharing tools and channels and are each moving into complementary technology areas such as personal video sharing (where they are exploring paid subscription models (Full disclosure: until recently, I ran a video sharing company, Motionbox, which had partnered with Shutterfly and was eventually sold to Snapfish)).

    A fourth "company", Picassa (a division of Google), continues to provide innovative ways to collect, curate and search photos dispersed throughout the web and on mobile phones.

    And another, smaller company, Animoto, has developed a novel approach to displaying and monetizing photos by mashing them up with music tracks and charging on a subscription and pay-per-use basis.

    So, the underlying business of photo-sharing seems to me to be alive and well.

    All of that said, the photo-sharing business landscape does have major storm-clouds. These clouds though are coming not from the shakiness of the foundation of the current entrants, but rather from the Facebook juggernaut. Facebook now has some astronomically high number of photos stored on its servers. This is making it increasingly difficult for the incumbent services to extract value as photo repository portals, and is forcing them to tie their value-added products to social media applications which don't necessarily rely on the the photo-sharing service "owning" the consumer's photos.

    The jury is out to see whether Facebook will try to vertically integrate into the photo (and video) space, or whether they will play the role of platform extracting rents from the incumbent photo services to have access to the photos housed on the Facebook platform.

    So, while it is an industry that's going to go through significant change and likely consolidation over the next few years (and likely to benefit the consumer as it does), I don't know if it's fair to say that it's an industry in search of a business model.