The web is a powerful tool to reach people with products and services. With Australians spending an estimated $12 billion online in 2010, reaching consumers through the web is quite lucrative; and with this we are ignoring the fact that the web is a worldwide phenomenon. The web empowers sellers to reach a global market of consumers with lower overheads than traditional stores.
O’Reilly realised the impact of the web on sales to the consumer. Due to plummeting cost of production and distribution, the Internet is actually a large collection of small sites and groups (niches), not a small number of big consumer groups. This is where O’Reilly suggests leveraging the long tail – reaching smaller markets on “the edge”, rather than targeting the major markets like everyone else does. Leveraging the long tail requires excellence in customer self-service and harnessing collective intelligence to deliver the best value to customers.
One online service that leverages the long tail to it’s financial benefit is iStockphoto. iStockphoto sells royalty free photos, illustrations, audio, video and Flash animations. The site started in 2000, selling just a few photos. This is where the site leverages one of the very fundamental parts of the long tail design patter – make your niche in the long tail fatter. By developing the service from a few photos to a diverse range of multi-media covering audio and visual aspects, iStockphoto has grown their market and made it more attractive for them to target. By doing this, they also increased the value for their customers, giving them reason to stay with the service.
Beyond this, anyone can contribute content, democratising the contribution process. People already have their own tools and knowledge and can produce content they can offer to iStockphoto and earn commission off. iStockphoto can also balance supply and demand, as they perform a manual review process. They know what consumers want and can control what is and is not made available. Content is also generated on top of the digital content through keywords (users essentially provide free tagging for their images, making search easier). Unfortunately, iStockphoto does not use other metadata such as popularity or ratings to suggest further purchases to users, so they are missing out on possible value here.
To successfully use the long tail to financial benefit, customer self-service becomes important. This is one area where iStockphoto has made a trade off between control and fully implementing the design pattern. While most of the support services are outsourced to the client through forums, FAQs and manuals, iStockphoto insists on vetting all of the content that actually is put up for sale on the service. This creates significant overhead in terms of staffing to perform the manual approval process. To reduce the actually overheads here, iStockphoto could consider outsourcing this to the users. This could be an effective move, as manuals for quality are already made available to contributors for their own self-check of work before submission. By using multiple users to check and vet the content, iStockphoto gets free labour. Users would also feel more intimately involved because their contributions are visible on the service. It’s a win-win for iStockphoto and their users.
Overall, iStockphoto democratized content sales and reaches niche markets well, but there is a lot of the pattern the service could integrate to improve their service.
What else could iStockphoto do to build their use of the long tail?
Hi Trent,
You have a very well written blog. I agree with you that maybe they should hand over more control to the users, as this expresses trust in them and I think (as the pattern’s best practices suggests) that would help the service to grow even more.
The blog post I wrote for “Harnessing Collective Intelligence” was about the Web 2.0 application RedBubble, which is a space for users to share and sell their art, designs and photography. The users have control over what is uploaded to their profile, but from what I can see, the site still appears to exhibit only good quality content. Meaning the users are only uploading good stuff. This may be partly due to RedBubble’s recommendation to users to “only upload the work that you are proud of.” But I also feel like the whole atmosphere of the site encourages quality work.
I think iStockphoto would have a similar level of quality contributors, so maybe they should trust their users judgement as little more. Plus, as you said, it would be cheaper production for them too.
Great post Heath! I was about to write about iStock myself until I saw your post. I actually was about to work with them in Canada, so sad that I didn’t!! :( I love everything they do- they are a really cool company!! I agree with your comment that they could utilize this pattern more on their website, but from my understanding they are so wildly popular and busy as it is they seemed to be focusing on just keeping up with demand.
Another great site that is similar to iStock, but includes fonts, etc is http://www.veer.com They are a very similar company (and I believe both are owned by Corbis, however iStock was allowed to run more independently… but I could be wrong).
Anyway – great post and great example for a company that is leveraging the long tail!
A well chosen example and a good analysis with respect to the design pattern, Trent.
What else could they do? For instance, they could provide a printing service for the digital media. Alternatively, they could work together and integrate their platform with existing web companies offering those and similar services dealing with digital media. Their revenue could be based on commissions, for example.
(Just a minor note: There is a broken link to http://www.istockphoto.com in your blog post.)
Hi Dave,
There is so much they could do with the community to save on their overheads and server their niches. It would be possible for them to partner with other services to provide printing a la Flickr, but I think they could be better served to leverage these people and brand the service as their own – I feel this would be a better way for them to fatten the tail, as the user remains within the ecosystem of the iStockphoto brand.
Commissions are a great idea, mainly because it provides benefits to both iStockphoto who can more finely control cost and also for the service provider who increases their own reach and sales. Also, commission models really are not that much different to how the sale of items within iStockphoto actually works.
P.S.: Thanks for the heads-up about the link – it has been amended.
Hi Trent,
Totally agree that its important for iStockphoto to keep the user within their ecosystem – they have a fantastic service and a recognisable brand. A printing service would be a great add on – but as we move towards a paperless society printing photos may not be as popular as it once was. I know myself personally, all my images are stored digitally – except for the few that I have in frames.
I know that both for business and personal use, they are the first site i refer to for image searching. They have an image for everything – and their service is easy to use and understand (unlike some other the others that take ages to sign up for, and even longer to work out how to download an image!).
Nice blog post! like always, you’ve got a habit of developing well informative posts.
selected a neat app. can i get a perspective from you, if iStockPhoto gets closer to the mainstream market and moves away from the niche market by increasing the number of users, would you think other competitors (e.g. Flickr) would need to take huge step in breaking iStockPhoto down?
if iStockPhoto provided a different and unique service to their close compeititors and it became more popular because of it, would you think their competitors will adopt some of the unique features that iStockPhoto delivers in order maintain users?
Hey Trent,
I agree with your suggestion and the above posters suggestions, adding in the option for printing is relatively low overhead and has the potential to generate a lot of revenue.
Your criticisms on moderating each individual item are very valid, as it really is a waste of time when you can make use of the collective intelligence to rate and also spot things that do not belong on the site.
Although I may have missed it, which niche market did you identify as being addressed? Or was it more the whole service from submission to selling that you felt was niche?
Chris