Making Money with Multimedia — Part 2

If multimedia producers such as Brian Storm of MediaStorm followed the typical business model in dealing with photographers as suppliers of the content, they would seek to get maximum value at least cost. But from my observations at his conferences and his website, I doubt Brian thinks strictly in those terms.  He seems quite passionate about helping those in need throughout the world, and he also seems quite driven to help photographers earn a decent living. Over time, though, producers must think at least generally along the lines of maximum value from their suppliers (photographers) at least cost to stay in business. In a competitive world, a sustainable business needs to earn a return sufficient to compensate the owners and employees. So let’s look at the natural consequences and strategies that both producers like Brian and documentary photographers can follow to achieve sustainability.

Context

This is the second post in a four-part series on the multimedia business model. In the first post, we looked at the relationship between multimedia producers and their customers. We explored how companies like MediaStorm could enhance their value proposition to customers, and thereby earn higher returns. In the third post, I will look at how multimedia competes with other media, print and electronic. And in the fourth post, I will look at how multimedia competes within the new multimedia industry.

But for this second post, I will explore how multimedia producers work with the photographers who supply the content. Following the conceptual framework of Prof. Michael Porter, we are looking at the relationship on the left side of the following diagram, highlighted in red.

[gview file="http://christiandocumentaryphotography.com/wordpress/wp-content/uploads/2011/02/porter2.pdf"]

Ensuring Adequate Supply

Multimedia producers like Brian must ensure that there are enough photographers out there trained in the unique elements of producing stills, audio, and video to allow him to produce the multimedia clips for which he is famous. Since, in the grand scheme of things, multimedia is still relatively new, producers like Brian find it necessary to conduct training programs to help traditional photographers develop their skills for multimedia content.

Increasing the supply in that way does a couple of things for Brian. First, obviously it allows him to develop the quantity and quality of the multimedia content he desires. From Brian’s vantage point, he needs a wide variety of photographers with different skill sets and different areas of focus.  The photographer’s personal vision and voice come through each project, rather than generic treatment. The result is that Brian can’t use the same photographers for each project.  He needs a variety of photographers to avoid every MediaStorm clip looking the same.

Further, Brian needs experts in each of the areas he wants to cover with his clips. A photographer can’t tell a story she don’t understand well, really well. There are very few generalists in this world who can succeed in documentary photography on nearly any subject. Further, specialization allows for increased speed and efficiency.

Indeed, the trend is to use people who have far more than merely a background in photography.  For example, National Geographic photographer Paul Nicklen obtained a B.S. in biology and began career aimed in that direction, before teaching himself to be a wildlife photographer.  I can’t quantify it, but from my reading it is not unusual for a person to start in one career, then go into photography making use of what they learned in their first career, often in an advocacy role.  More unusual, though, is the story of Anna Maria Barry-Jester.  According to PDN (August, 2010), photojournalist Barry-Jester went back to school to earn a Masters of Public Health degree at Columbia University to support and strengthen her work in photography. She now focuses her documentary work predominantly in the area of public health around the world, doing work for sponsors such as medical device maker Becton Dickinson & Co. that wants to highlight the need to improve healthcare. She finds the Masters degree opens up doors both with potential sponsors as well as the subjects of her photography.  As her projects, she has focused, for example on the need for better care for people with diabetes in southern India, as well as on the programs to avert maternal death and disability through Columbia University.

Of course, specialization is not accomplished through advanced education alone, or even predominantly. For years the photography field has been growing toward the use of specialization where photographers really hone their knowledge and skill in a particular subject matter. We read all the time about people who grow up with a passion for skateboarding, for example, and turn that into a career photographing people skateboarding.

The second thing that increasing the supply of capable photographers does for multimedia producers is potentially lower the price of the photography. At least that’s how classical, free-market economics works.  And photographers in general have felt this effect, keenly. As the ranks of photographers have swelled with many people able to participate because the technology barriers have come down and because they have a passion for it, the market for photography seems to flooded and the prices have dropped precipitously, at least for average quality photography.

But Brian advocates higher pay for those who have demonstrated excellence in their craft. While part of his motivation seems to be that Brian is simply sympathetic, I would also guess that he is personally trying to attract the high end of photographic talent to work with MediaStorm.  And if he can command higher prices with his customers, God bless him for doing so. For those producers who are not paying a premium for the expertise of the photographer, presumably they either have a different business model, or they simply are unable to convince their customers of the added value these photographers bring.

Viewed from the photographer side, all of these trends indicate a compelling need for photographers to identify and exploit a reasonably narrow niche. Rather than competing with all documentary photographers, those who focus on a niche only compete with those who legitimately are in the same space.  It’s all about finding a niche and really developing that niche by trying to learn everything there is to know about the subject. I plan a future post to identify those things a photographer can do to really carve out a niche, but in general it means the focus on a relatively narrow market, both in their production and in their marketing efforts.

Structuring the Relationship

When gathering talent to help produce multimedia documentaries, producers like Brian have at least three choices:

  1. Hire them as employees
  2. Contract with them for specific services
  3. Engage them only for specific, episodic projects

Brian always has to think about what gives his business that special edge, that competitive advantage over other multimedia producers. And he needs to make sure he solidifies his relationship with those people who give him that edge. If the source of his edge is needed day in and day out, he probably would prefer to bring those people on board as employees if he is well enough capitalized to afford that commitment. If his needs are more episodic, he would go with one of the other relationships.  But he must have a tight relationship with those people who provide the skills that ultimately distinguish MediaStorm from its competitors.  So this might mean employing these special people full-time as associate producers or special skill positions, in addition to the people who he needs for more generic skill sets.

Photographers may very well be one of the key skill sets that distinguishes MediaStorm from its competitors. As explained above, if Brian also does not want to depend too heavily on a small number of photographers because their vision would get to look monotonous after a while, Brian probably would want to hire a larger stable of photographers on a periodic or freelance basis. Even though the quality of the photographers is immensely important to Brian, he needs a staple of them, rather than riding a single horse.  So, the question is, how can Brian structure a relationship that keeps these key photographers close to him, but does not over-commit to using them more frequently than he should.

It would seem that a contractual approach often referred to as a retainer might be the most appropriate.  Retainers are common practice in the business of law, but also make sense in other professional services industries. The concept of a retainer is to buy an amount of time from the professional that you predict you will need, but it is certainly less than full-time.  Retainers have psychological and economic impacts. A retainer relationship means that the purchaser of the service becomes essentially a preferred customer, getting special treatment. A wise professional will take care of their stable of retainer clients more carefully, cultivating those relationships because they are long-term. Preserving long-term relationships is always cheaper than having to go out and find new business. So the loyalty associated with a retainer relationship becomes an important element.

Retainer relationships also have economic advantages to both the buyer and seller. From the seller’s standpoint, a retainer becomes a reliable source of income that doesn’t vary month-to-month, and allows for much more effective business planning. From a buyer standpoint, a retainer represents usually a fixed fee to cover the general scope of work, so the buyer doesn’t get surprised by an unexpectedly high bill. Sellers also tend to provide a bit more services to a retainer client than they might provide to others who are paying by the day or on some other basis.

Structurally, there are many ways to put together a retainer agreement. The simplest version is a fixed monthly payment for a defined scope of work. Photography, though, is much more episodic than that. A producer might go months without needing the work of a given photographer, and then may need the photographer to work intensely for a period of time. Producers also often prefer project-based fees because from an accounting standpoint that allows them to better connect their costs to their revenues.  So perhaps a more practical arrangement would be a relatively small retainer amount paid perhaps quarterly for the photographer to be available for consultations on approaches to visual problems that come up, just to keep the photographer close and engaged, and then larger project-based fees when an actual project needs to be done. Frankly I can think of dozens of variations that could be employed based on the unique needs of the producer and skills of the photographer.

Managing Risk in These Contracts

For Brian, managing the risk on these contracts is perhaps the second most important thing from a business standpoint he will do, beyond producing high-quality work. In this case, risk refers to the chance that the intended finished product will not meet the needs and expectations of Brian’s customers. Many factors contribute to that risk:

  1. Will the photographer be able to gain access to the key areas needed to capture the story?
  2. Will the photographer do his work with the necessary skill in collecting the still images, audio and video?
  3. Will the storyline develop into an interesting plot, which will resonate with audiences?
  4. Over the sometimes long period between conception and execution, will other events in society heightened or lessen interest in the topic?
  5. Will the photographer complete the work on time?

So Brian has to manage those risks, and he will do so through the contractual relationships he enters into with photographers. In doing so, Brian has many options:

  1. Asking the photographer to do the project first and then come to Brian to sell it at the end. In this case, the photographer would bear most of the risk, and so the price should reflect that (i.e., the price goes up).
  2. Waiting until the photographer is part way through the project before getting financially involved.
  3. Tying payment to certain objective milestones, with the amount weighed toward the end.

Another way for Brian to deal with risk is to diversify. In this context, that would mean supporting several different projects with just a bit of seed money each and then seeing which ones bear fruit.

From the photographer’s standpoint, even if Brian wants to own the work all from the beginning, if Brian does not offer enough money, the photographer might decline that offer, and try to find some seed money from family, friends or other interested investors.  That seed money might be enough for the photographer to finish the project, and shop it around to producers at a point in the project when much of the risk has been eliminated. For large projects, from a financial standpoint, it’s probably best to spread the risk across several investors.  The bottom line, though, for photographers to remember is that the more risk they can take, the more reward they can expect.

Increasing the Value Proposition

Quality content will always be worth something.  But if the photographer wants to increase the value to producers like Brian, in addition to providing high quality content, the photographer can work to enhance the ultimate market — the market into which the producer will be selling the content.  Let’s say the photographer wants to do a multimedia documentary on access to health care in rural America. The photographer should not necessarily limit his thinking to reaching out to producers to convince them that it’s a valuable idea. The photographer can directly reach out to organizations that might want to purchase some level of rights in the final product even before approaching a producer. So the photographer might approach companies, for example, that sell telemedicine equipment and healthcare provider systems known for telemedicine and try to stir up interest in the project. That increases Brian’s market, and reduces the risk, and the photographer can and should expect Brian to compensate him for that added value.

Marketing that the photographer can do directly to end users will be the subject of a whole different post in the future. Clearly such vehicles as blogs, newsletters, networking at events, approaching corporate sponsors and NGOs, utilizing social media and the already discussed techniques for crowd sourcing all can play a role in stirring up the market. My point is simply that doing so enhances the perceived value to the producers to whom you will be pitching your idea.

Conclusion

I’ve tried in this post to approach this issue of the relationship between photographers and producers from both sides, offering ideas regarding best practices that will ultimately produce sustainable relationships. Clearly we have to get to the point where both the producers and the photographers make enough money to satisfy their personal needs.

[gview file="http://christiandocumentaryphotography.com/wordpress/wp-content/uploads/2011/02/BusinessModelelements2.pdf"]

At the end of the day, I know with certainty that there is such a model. It’s basic economics.   Photography, like writing, can have great value when done well. Society will always need to communicate. It’s a very basic need. Clearly, though, we are in a transition phase where the Internet and other elements of technology and business have disrupted the old business model. But the Lord is ultimately in control of both supply and demand, creating just enough photographers to serve His purposes. We will find a new model, and in the meantime I have hope and pray for those suffering the painful transition.

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One Response to Making Money with Multimedia — Part 2

  1. David Bro says:

    Hey Brad,

    This is very interesting reading—its a thick topic for sure and you have done well to break it down and parse out the each aspect of multi-media. I think we are climbing the same mountain, but from different sides. You have my regular email now so get in touch with me when you can; I would like to send you some links about what I have found and I am curious to see what you think.

    David Bro
    Freelance Editorial/Newspaper Photographer.
    Orange County, California.

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