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Before that, you had to be a member of the community if you wanted to actually benefit from having stock art available. After the change, anybody could buy, whether or not they were supplying photos to the site.
Livingstone: When people like me who are crappy photographers first started using the site like this, they're willing to pay 25 cents for an image, but didn't really have anything really great to contribute. We were paying 5 cents of every quarter to the photographers, so it was funny--we were all getting nickels for a photograph.
When did you switch to the system where money changed hands?
Livingstone: We started charging in 2001. Probably toward the end of 2002 or the beginning of 2003 we actually had a bit of a budget and realized, "Hey, there's a business here."
When did the existing stock-photo shops realize, "Hey, iStockphoto has a bit of business there"?
Livingstone: Around 2004. I would go to industry events like CEPIC in Copenhagen, and people had no idea who I was. They just knew that when they searched in any of the search engines iStockphoto was always at the top, and they didn't really know what we did or who we were. They weren't very Internet-savvy. (In a speech in 2004, one rival executive said that) "iStockphoto was a crappy company selling crappy images to crappy customers."
Laughing at you is the first stage of recognition. But by early 2006, Getty bought you. What's the story behind that acquisition?
Livingstone: In 2005, we knew that we were going to have to grow a lot internationally in order to keep up our pace and in order to keep being No. 1 everywhere--search engines and traffic rankings. Even today our hardware is overburdened. So I was in New York and Boston and everywhere looking for venture capital money in 2005.
At this point you got by on $50,000 to start and then were self-funding?
Livingstone: Yeah. But we did a budget and (the server hardware spending) was $6 million that year. I had a term sheet I was ready to sign with Insight Venture Partners, but I decided I'd better phone Getty and see why they keep calling me. I had a meeting with (Getty CEO) Jonathan Klein within a few days. I went to Seattle and we hit it off. It was obvious that we were cut from the same jib. We struck a deal within a couple of weeks.
It's always a tough call for founders to lose that independence.
Livingstone: The problem was that if we took venture capital money, how involved would they be, and would they influence the growth of the company in a negative way, and would they do things that I wouldn't agree with? And then I thought what would be best for the photographers and the artists on iStock. It just seemed like a really natural progression to have them be part of the Getty family and have a career path. They can move on from iStock, start submitting to Getty and move up the food chain.
Is the argument from Getty's perspective that it's better to cannibalize yourself than be cannibalized by somebody else.
Livingstone: That's what Jonathan said, but I still I look at it as complementary. Sometimes (stock art customers) can't pay huge money. The handshake is a totally generic image--why not get it for $5 instead of $200?
At the end of that first year before you started charging, how many were people in the community submitting photos?
Livingstone: It was definitely under 500.
And how many do you have today?
Livingstone: There are 35,000 photographers and illustrators today.
Realistically, how many of those are going to graduate to Getty? Probably the vast majority of those people have no expectation of turning fully pro.
Livingstone: It's going to be an additive solution for them. The first 100 or so (iStockphoto members) now have Getty contracts, and their images are going to be on Gettyimages.com in October.
What reception did you get from the professional photographers when they started seeing competition from some amateur who happened to have a digital camera who happened to snap a picture that was good enough of something like the Golden Gate Bridge?
Livingstone: It's a natural thing to blame us, but we didn't make inexpensive cameras. We didn't make semipro photographers. We made a Web site, an open marketplace for people to sell.
Have the pros decided that it's better to band with you than to try to fight you?
Livingstone: The ideas are changing. A lot of pro photographers are now submitting to microstock agencies, and at least testing it out and seeing, "Can I actually make money here?" I think a lot of them are finding that yes, they can.
There are about 30,000 submissions a week. About 60 percent make it through. What growth do you expect to see in numbers of contributors and submissions per week?
Livingstone: We just started localizing. In September 2006 we did a French version, a German version and a Spanish version. In June we're going to start rolling out the rest of the languages that we have in the Getty-controlled vocabularies (technology to improve image-labeling accuracy). We're going to start in Japan and stop when we get to China.
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