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Market Intelligence and Competitive Analysis Online Professional Photographer Services Team: Shai Maskit, Shelly Rosenfeld, Dvir Rosenfeld, Adi Yankovitz, Ori Zohar Advisor: Uri Paz Slide 2 Agenda Research Results Industry analysis Competitive platform analysis Conclusions Conclusion How photographers operate? Surveys and Interviews Recommendations Target Market Online pro/semi-pro photographer services Slide 3 Research Methodology Market research * Photography in the United States IBISWorld, May 2015 Industry Analysis Structured interviews with photographers Online survey in photography forums Marketing in key Verticals Online research Competitive Platform Analysis * Acquired by Kodak Slide 4 INDUSTRY ANALYSIS 4 Slide 5 US Market Analysis - Segmentation 170,000 Full-time Photographers Source: Photography in the United States, IBISWorld, May 2015 Full-time Pro Photographers Total $10.1bn Yearly revenue Slide 6 US Market Analysis Key Points 44.5 5.9 Average wage is $26.6k per year Low profit margins of 5.9% Expected Annual Growth Until 2020 Over 90% Under 10% Employed as Independent Industry Employment 2.4% 1.3% Revenue > = Average Revenue Decline Trend to increase value-added services Generate less than 1% of photographers revenue * Source: Photography in the United States, IBISWorld, May 2015 Margins and wages are low Expected to further decline Reducing costs or increasing revenue is key Slide 7 COMPETITIVE PLATFORM ANALYSIS 7 Slide 8 Competitive Platforms Research Full details: Total 30 platforms reviewed Slide 9 Platform Classification users Photographers Imaging services Cloud storage Images Directory Website Services Stock Stock+ Slide 10 Platforms Researched Search by Photographer Search by Image YesNo Yes Stock+Stock DirectoryWebsite Services Photography only General platforms Scatter plot data: Monthly visits, June 2015. Source: SimilarWeb Smugmug PhotoShelter ImageBrief 500px SmartShoot Photographer Central Photographers HoneyBook Gigsalad ThumbTack The Knot Gigmasters Fearless Photographers No Pixieset Pixpa Wix Zenfolio ShootProof OnlinePicProof APhotoFolio FolioWebSites Orosso FolioLink FolioHD InstaProofs Cloudspot Sq Space Livebooks RedCart Slide 11 Traffic Sources Search by Photographer Search by Image YesNo Yes Stock+Stock DirectoryWebsite Services Consumers Pros / Photographers Scatter plot data: Monthly visits, June 2015. Source: SimilarWeb Smugmug PhotoShelter ImageBrief 500px SmartShoot Photographer Central Photographers HoneyBook Gigsalad ThumbTack The Knot Gigmasters Fearless Photographers Pixieset No Pixpa Wix Zenfolio ShootProof OnlinePicProof APhotoFolio FolioWebSites Orosso FolioLink FolioHD InstaProofs Cloudspot Sq Space Livebooks RedCart Slide 12 Search Implementations Blind request Get quotes for jobs or images according to specs Search by features Locate photographer or image using various criteria Platform with combined offer might be stronger Pull Customer screening Push Photographer in control Slide 13 Business Models All Monetize Photographer Side Search by Photographer Search by Image YesNo Yes Stock+Stock DirectoryWebsite Services No Freemium Subscription Generic platforms $4-$33 / month (Photography specific platforms) Subscription Commission $3-$50 / month 8%-30% Subscription Affiliation $4-$70 / month (Differ by features) Affiliation with external labs for prints fulfillment Slide 14 Legal Aspects Source: Terms and Conditions of 30 platforms Copyrights: Photographer content ownership retained on all platforms License: Display content * on platform All Use content * for promotion 31% With or without attribution Typically no cost to platform * Photographer content: Directory profile pictures Stock+, Website services pictures and galleries Promotional License 31% Basic License 69% Type of License Slide 15 Pixsy What does Pixsy do? Locate unlicensed imagery on the web Seek fair license fee on behalf the photographer as an alternative to aggressive legal tactics Business model success fee (50%) Litigation is costly and returns are low 1 : $1250-$1500 - Five hours of legal consultation at the average rate $150,000 Maximum statutory damages for copyright infringement in the US $373,000 The average cost of taking a copyright case to trial 1 Source: Pixsy WebsitePixsy Website Slide 16 Funding Aspects Search by Photographer Search by Image YesNo Yes Stock+Stock DirectoryWebsite Services No VC, $22.3M VC, $4.2M VC, $3M Bootstrapped Family owned Photography Specific Most bootstrapped Generic Platforms $1.3M-$148M Photography Specific Most bootstrapped Generic Platforms $5M-$78.5M Slide 17 HOW PHOTOGRAPHERS OPERATE? 17 Slide 18 Surveys and Interviews Pets Events Journalism Fashion School Sport Personal Portraits Weddings Real Estate Family Portraits Online Survey 65 pros Artists NGOs Corp. Actor Portraits Family Portraits Phone Interviews 7 pros (approached ~40) Slide 19 Business Is Hard Physical media an important mean for customer communications. (Also in, NY for tax purposes) Wrong tax calculations for some US regions made almost all platforms unusable Building a business is a big unexpected challenge. Learning on the go (examples) Pay per click marketing leads to price competition. Not effective after the business matures. To do well you need 90% business and 10% photograph y. You need to know how to market yourself Would be great if someone could do that for me but that s another cost Consideri ng leaving the business because it s so hard Learning a lot about building a business Photographers are in need of business management solutions Slide 20 Directories Dont Generate Business Sources: Pro photographers survey (n=65); Pro photographers interviews (n=7); What is your main directory platform? On Photograph er Central because was offered on Zenfolio Never heard of these Director ies don t bring in significa nt business Photographers dont see the value of directories Slide 21 Website Hosting Zenfolio Rules What is your main website services platform? Selling prints - a criteria for choosing a platform Zenfolio is the go to platform Ease of use Selling prints Good enough Sources: Pro photographers survey (n=47); Pro photographers interviews (n=7); Important that the company knows photography, knows technology, has responsive support Used the first that came up on Google Slide 22 Marketing Is a Challenge Word of mouth dominant channel for new and recurring business 2 Websites are obligatory, but mostly minimally maintained as a virtual business card 2 Social networks have marketing potential, all expressed they need to do more in that medium 2 Main Promotion Method 1 Sources: (1) Pro photographers survey (n=65); (2) Pro photographers interviews (n=7); (3) Photography in the United States, IBISWorld, May 2015 Marketing expenditure is only 2.4% of revenue 3 People with marketing skills can start quickly Inefficient marketing lack of knowledge and skills Room for disruption Slide 23 Target Users Initial Profile Ages 18-20 Only a Small portion of consumers Ages 36-55 Largest consumers of industry products Ages 20-35 Small presence in family portraiture market Strong consumers of wedding photography Source: Alexa (Traffic in Websites such as 500px, Smugmug, Zenfolio, Shootproof) Online User Profile Caucasian Female 35-64 College Graduate Income Over $30k/yr Need to crack target user discovery and decision making processes Industry Customers Source: Photography in the United States, IBISWorld, May 2015 Slide 24 Firm of Interest Founded 2009 Atlanta, GA Bootstrapped ~16 Employees Product Offering Website Services: Online storage and client proofing platform Custom, white label mobile gallery apps International 12 languages supported Potential Match: Platform and cloud services backend Boosting word of mouth expertise Increase your word of mouth referrals and book more clients with ShootProof Mobile Apps Tens of thousands of users in 32 countries Slide 25 Firm of Interest Private (Michael Grant) Photo Holdings, Inc. Founded 2000 Torrance, CA VC, $32M 2012 Image storage, retail fulfillment Wholesale imaging fulfillment Studio management software Aug 24, 2015 Potential Match: Assets IP and know-how ShootQ Tax benefits Print sales decrease Storage requirements increase Faulty computing infrastructure Why? Slide 26 Developed by photographers, for photographers Saves time and boosts sales by providing sales leads with an easy booking service: Contracts review and sign online Marketing lead tracking Scheduling never worry about double booking Branding customized look and feel Integrated payment solutions invoicing payment process Email templates Workflows and task reminders Customers questionnaires Subscription based - $39-$79/month ShootQ and ShootProof announce integration partnership (Aug 27, 2015) Slide 27 Conclusions Pro photography margins and wages are low, expected to further decline Photographers lack business and marketing skills, express interest in management solution Discovery and decision making processes for photography target users unclear to photographers Photographers dont see the value of being listed in online directories Slide 28 Recommendations A full ecosystem to address photographers pains Business Management as a Service Guidance Tools Marketing as a Service Support and enhance word of mouth marketing Lead generation through directory, search and social mechanisms Helping photographers reduce costs or increase revenue is key for platform appeal Directory Website Services Users Imaging Services + Slide 29 Recommendations Consumer Side We recommend researching consumer side to crack target user discovery and decision making processes Platform with combined push/pull implementation for best results Pricing should emphasize website services rather than directory services Directory service Should be implemented in a clever way Slide 30 30 Thank You! Shai Maskit Shelly Rosenfeld Dvir Rosenfeld Adi Yankovitz Ori Zohar