Getty Images & Shutterstock watch out! Pirates beware! $200 million raised! Blockchain could change the way we consume photographs forever

“A person's clenched fist with an engraved ring with the phrase "I am badass"” by Brooke Lark on Unsplash

There’s a bunch of blockchain project’s working to make photographers happier. The projects can be graphed across 2 axis: stock photography marketplace disruption; and copyright protection. Photochain, WeMark, Pibble, IPStock are attempting to disrupt the stock photography marketplace by using blockchain to facilitate peer-to-peer transfer of value thereby removing the need for a middle man. Binded, ImageRights, Ascribe, and Kodak plan to provide copyright protection using image hashes written to distributed ledger to provide an immutable record of IP.

Photo ICO Matrix by Paul Geraghty

Blockchain promoters believe that photographers are unhappy with both stock libraries and copyright lawyers and registers. This assumption underpins their business cases. They want you to believe it too.

Photo Stock Market Status Quo by Paul Geraghty

How unhappy are photographers? Would the application of blockchain technologies fix the stock photography marketplace? Would copyright registration stop image piracy?

Marketplace dynamics

To generalise, photographers are a pretty unhappy bunch and it’s easy to understand why. Photography as a business has been massively disrupted over the last 30 years. Competition has reduced prices. Distribution channels are not as profitable as they once were. Image piracy is ubiquitous. Photographers are particularly unhappy about stock photography dynamics. 15 years ago, if you had 700 images available on a major stock photography website you could have earned up to $30,000 annually. Today, earnings would be around $3,000 annually. Earnings per photographer have decreased. The kicker for photographers is that the incomes enjoyed by 3 big stock photo agencies that dominate the stock photo market have increased. Between 2010 and 2017 Shutterstock’s revenue increased from $83 million to $557 million.

Photographer Revenue Trend vs. Stock Market Revenue Trend by Paul Geraghty

Stock agencies provide an effective sales channel for some photographers. Stock libraries have strong contractual relationships with publishing, media, and communications companies who use large volumes of stock photography. Getting volume consumers to engage with a new channel will be problematic. Many community based stock libraries have failed because they couldn’t engage volume consumers. New entrants would need superb photographic content, deep domain knowledge and offer a superb UX to compete with the incumbents.

A number of blockchain ICO white papers assert that photographers only earn 15% royalty when an image is sold. The number is closer to 50%. Disintermediating the intermediary and applying DLT technologies to fix the distribution of value in the supply chain could balance the transaction towards the photographer. A win in the short term, not in the medium to long term.

Oversupply

Stock photography is super competitive. There are more than 260 million images and videos available on Shutterstock. More than 150,000 images are uploaded everyday. There is an oversupply of images on the platforms. Competition between photographers is fierce. Oversupply forces prices down. The volumes of photographs available also reduces the frequency at which photographers sell their images. Applying blockchain technologies to fix the distribution of value could balance the transaction towards the photographer, it won’t fix oversupply.

If your royalty is 50% or 15% and the pricing trend is down — in some cases has gone to nothing, as is the case with Unsplash who provide royalty free stock for free — cutting out the middleman may make no difference to price in the long term.

Image Piracy

Most Photographers have had their work stolen more than 200 times. 85% of images are used online without a valid license. The key indirect source of competition for the photographers is image piracy. Why would you pay for an image when you get it for free? Image piracy is ubiquitous. Most people simply do not realise that right clicking and saving, embedding, sharing and pinning images hurts the photographer that created the image by denying them income. Platforms life Facebook, Google, Pinterest, and pretty much all news websites encourage this behaviour.

Consumer Piracy by Paul Geraghty

The disconnect between revenues enjoyed by intermediaries and content creators results in a conflict of interest. Intellectual piracy has been addressed by other industries such as software, movies, and music where the interests of creators and intermediaries are tightly aligned. Stock libraries have financial and political resources to address this issue, but have not done so. It is in the interests of the intermediaries to provide photographs for free to drive traffic and awareness for their channel. Litigating at the level required to change behaviour would generate negative sentiment directed towards the intermediaries. The conflict of interest between the stock libraries and photographers that has prevented them fixing this problem. Intermediaries have been slow to take legal action to prosecute unauthorised usage at the level required to disincentivize piracy.

Record of IP

In Europe photographers IP is protected by default. Under european law a creator owns their IP unless they explicitly assign rights to a 3rd party. Storing a hash of a photograph on a blockchain to create an immutable record of ownership has no legal basis. Blockchain based copyright hasn’t been tested in court.

Image piracy is a behavioural issue. Most people simply do not realise that right clicking and saving, embedding, sharing and pinning images hurts the photographer that created the image by denying them income.

Making Photographers Happy

Photographers could earn more money from image sales on a blockchain based system then they currently do using existing centralised stock photography marketplaces. Blockchain and distributed ledger technologies remove the need for a trusted intermediary to broker image rights between photographers and consumers of photography. Tokenization, peer-to-peer transactions, and smart contracts remove the need for an intermediary to handle payments and image file transfers. Disintermediating the intermediary by creating a distributed application to handle payment and distribution would reduce costs. Savings could be shared between photographers and consumers.

Photo by Logan Fisher on Unsplash

A decentralised application (DApp) would be governed by those with the greatest stake in the system — the photographers who store and sell images using the application. An image stored on the DApp could be represented by a token. The tokens would prove the photographer’s stake-in-the-system and would confer participation rights in the systems governance.

Operating a node could provide an opportunity for photographers to earn new revenue. The distributed application would require infrastructure. Photographers could operate the nodes that run the system and provide the storage and processing infrastructure required to run the distributed application. Photographers currently pay for cloud storage and backups: they could substitute these centralised cloud services with a DApp node and perform these functions for both themselves and other photographers. The photographer’s image library would be their proof of stake. They could earn revenue by providing services within the ecosystem.

Distributed Infrastructure and Machine Vision

The nodes would provide the distributed infrastructure to support the marketplace, filestorage and value transfer. A digital asset could only be added to the chain if the consensus algorithm concludes that the creator owns the asset and the asset does not infringe the IP rights recorded on the chain. Machine vision would be required to verify IP.

Every image has a unique visual pattern which would be used to create a visual signature. The image signature, or hash, is a unique identifier. Once stored the image hash can be used to pattern match images. Machine vision could be used to detect incidents of IP infringement. This machine vision technique could be used to identify photographs published online and match them against the image signatures stored on the distributed-ledger to identify incidents of IP infringement. As the ledger grows, and the DApp scales to accommodate millions of visual signatures, this could be the key resource to stop image piracy. Image signatures stored on a permissioned public distributed ledger would provide an invaluable resource in the battle against piracy. DApps could be developed to consume the visual signatures stored on the distributed ledger and provide automated processes to enforce photographers image rights and pursue pirates for payment.

Conclusion

Most photographers struggle to make meaningful money from stock. Stock agencies have not addressed image piracy even though they have financial and political resources to do so. Blockchain and distributed ledger technology could provide an alternative channel that removes intermediaries with conflicted interests. A blockchain based stock photography marketplace could, in the short term, improve revenues for photographers by removing the stock agencies from the transaction.

Image piracy is ubiquitous. Stopping image piracy, flipping pirates to paying customers, would improve photographers circumstances. A decentralised blockchain based solution could drive behaviour change by providing the infrastructure and incentives for the photography industry to change user behaviour and address piracy.

There are number of blockchain projects raising money through ICO’s. Some have raised $45 million equivalent. All projects are missing skills. In some projects machine vision competency is missing which brings into question the ability to build a solution required to fix piracy, in other cases photographic industry competency is lacking which brings into question the ability to build value for volume consumers and drive adoption. The real risk is that these projects end up being a substitute for the existing stock marketplaces, or simply replace the role currently fulfilled by lawyers and agents, and fail to redefine the ecosystem and fix image piracy.

…or they pull it together, create a new ecosystem, and fix image piracy.

Entrepreneur, Director at the Gallery of Photography, Director CAP Prize, CEO Picturk