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Author Topic: LO closure 'the first of many....'  (Read 9206 times)

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« on: April 16, 2008, 01:37 »
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Lucky Oliver's closure is a significant piece of news for the microstock industry.  The message it sends is: if Bryan and his team cannot make it work, and cannot get more funding, what is the future for the other small start up agencies.

With the world trapped in a credit crunch and money much more difficult to come by, the news about LO's failure has just made it difficult or impossible for other small agencies to get second or third round funding.


RacePhoto

« Reply #1 on: April 16, 2008, 02:06 »
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Lucky Oliver's closure is a significant piece of news for the microstock industry.  The message it sends is: if Bryan and his team cannot make it work, and cannot get more funding, what is the future for the other small start up agencies.

With the world trapped in a credit crunch and money much more difficult to come by, the news about LO's failure has just made it difficult or impossible for other small agencies to get second or third round funding.

All true which may also be a sign that investors don't see any future with start-ups in the microstock industry.

Expansion and development is over. Now it's time for consolidation and contraction.

This should be good news for the top sites, as it secures their position and signals a slowing of competition from new agencies.

« Reply #2 on: April 16, 2008, 02:44 »
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I was surprised that LO folded but sales were very low there compared to other sites and it looks like they didn't have mony to promote the site.  That is a recipe for disaster.  Albumo have even lower sales, so they surely can't last long.

Most of the other sites I am on have better sales and have more buyers, so they have a better chance of surviving.

« Reply #3 on: April 16, 2008, 03:06 »
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Hatman has made some good points about this.

In the present climate I think we should all be less hasty in jumping aboard new startups.

DanP68

« Reply #4 on: April 16, 2008, 06:53 »
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Hatman makes excellent points. 

In the world of financial investing, you do best during times like this by identifying companies which are well financed.  These companies not only have a high survival rate, but they also gain market share during downturns as their poorly financed competitors struggle or go under.

No reason this downturn should not apply to microstock companies too.  Who are the well-financed smaller players?  These companies could stand to gain when similar sized companies die off or give their market share to the only strong companies in their category.

How about the Big 7?  Any poorly financed players?  I would think BigStock might lose share to the other 6, but then I assume their sales are strong enough to keep them well in the black.  All conjecture of course.

« Reply #5 on: April 16, 2008, 08:12 »
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I contend that LO closure will not have a significant impact of the stock community.
It was never a strong contender right from the very start.

It was a struggling  new site that in the beginning showed promise and creativity.
As time progressed, LO did not. I suspect they had very little venture capital to throw
into a marketing campaign. They did little or no marketing, and was no where close to the competition.

No one ever made a killing on LO. In the beginning payouts were to far in between, and less frequent than the competition.
Lowering the payouts kept some contributors from bailing out, but it was too little too late. LO was already doomed.

This should serve as a lesson to those who sometimes dream of opening their own stock site thinking its a walk in the park.

The MIZ

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #6 on: April 16, 2008, 08:17 »
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I wonder why they did that major upgrade. The site seemed to work fine before. It must have cost a ton of money and the performance was actually worse afterwards. Maybe the money should have been invested in marketing (?). Who knows...

« Reply #7 on: April 16, 2008, 08:22 »
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The site is so gay to begin with.

« Reply #8 on: April 16, 2008, 08:26 »
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I contend that LO closure will not have a significant impact of the stock community.
It was never a strong contender right from the very start.

It was a struggling  new site that in the beginning showed promise and creativity.
As time progressed, LO did not. I suspect they had very little venture capital to throw
into a marketing campaign. They did little or no marketing, and was no where close to the competition.

No one ever made a killing on LO. In the beginning payouts were to far in between, and less frequent than the competition.
Lowering the payouts kept some contributors from bailing out, but it was too little too late. LO was already doomed.

This should serve as a lesson to those who sometimes dream of opening their own stock site thinking its a walk in the park.

The MIZ

nowdays with all the competetion its a walk in the park in the dark.

« Reply #9 on: April 16, 2008, 08:33 »
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I'm not sure I know what you mean.
Your statement makes no sense to me.

« Reply #10 on: April 16, 2008, 08:37 »
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then your are brave. It is risky to walk in the park in the dark. at least for me.

helix7

« Reply #11 on: April 16, 2008, 09:31 »
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The LO closure should hopefully send a resounding message through the industry. It takes a serious financial and strategic commitment to launch a microstock company, and even with that the chances of success are slim.

All these new sites cropping up should take notice of the LO saga. Sure the temptation will always be there to build a microstock site that can literally generate money while you sleep, but you can't really expect to launch a microstock site on no budget with a couple of computers in a basement or garage.



vonkara

« Reply #12 on: April 16, 2008, 10:35 »
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Too many micros sites. The offer is higher than the demand. It's seem that opening a micro agency is hot these days. That's what I think. Even finding a name for the agency whit "stock" in it is becoming difficult

« Reply #13 on: April 16, 2008, 12:24 »
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I wonder why they did that major upgrade. The site seemed to work fine before. It must have cost a ton of money and the performance was actually worse afterwards. Maybe the money should have been invested in marketing (?). Who knows...
I thought the same thing, too. I can guess that they only had a certain amount of money available, and Bryan deemed it would be best spent on hardware/software rather than marketing. I wonder if he'd do the same again.

As for LO being the first of many, I can see Crestock (who also recently revamped their software) being close to the front of this line. Although they promote themselves better than LO did, Crestock just isn't attracting the number of buyers they should be.
« Last Edit: April 16, 2008, 12:28 by sharply_done »

« Reply #14 on: April 16, 2008, 12:35 »
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The only way a new stock site could/would make it is by offering exclusive content, pictures not to be found on other stock sites.. but what photographer would invest his time in that.?..

Patrick.

« Reply #15 on: April 16, 2008, 12:45 »
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I think the problem for a lot of these sites outside of the big 6 is,  not everyone submits to them. Its hard to compete when you don't have the product. If everyone submits to a certain site it will have a good chance of being successful, with a modest marketting plan. Its going to be hard for future startups to get everyone on board. Why would you shop at site X when these other sites offer so much more in content at a similar price. I could be wrong but this is how I see it.

« Reply #16 on: April 16, 2008, 12:51 »
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The only way a new stock site could/would make it is by offering exclusive content, pictures not to be found on other stock sites.. but what photographer would invest his time in that.?..

Patrick.

right, this is why istock is leading the way and selling more than anyone else

« Reply #17 on: April 16, 2008, 13:50 »
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I wonder what really happened. You don't go ahead and do a major upgrade if you're thinking of closing down the site. Even if he run out of money for the marketing why not keep the site alive with skeleton crew like many of the small ones do and keep looking for financing? Fishy. Probably a human factor - someone decided to pull out their money/support. Or something like that. Happens all the time.
Ah well - too bad, was one of the better new sites.

« Reply #18 on: April 16, 2008, 16:19 »
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I wonder what really happened. You don't go ahead and do a major upgrade if you're thinking of closing down the site. Even if he run out of money for the marketing why not keep the site alive with skeleton crew like many of the small ones do and keep looking for financing? Fishy. Probably a human factor - someone decided to pull out their money/support. Or something like that. Happens all the time.
Ah well - too bad, was one of the better new sites.

I agree it is odd.  In fact, didn't Bryan just take some time off to "recharge" because working weekends for 2 years had taken it's toll?  It could be the case of spousal burn-out.  I don't know him, but I'm guessing he's married and the wife might have said "Enough is enough."  Had close friends who went through something similar.  He ended up selling a [transmission shop] business that had rounded the corner into profit with a good reputation for honesty and integrity. 

I think the thing that irritates me the most is that all the news we were told is "things are improving, more growth, more traffic..." and then the rug is pulled out from under and "Oh by the way, we're not paying you."

« Reply #19 on: April 16, 2008, 16:30 »
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I think the closure has to do with several factors.  Bryan's wife and two very young boys are part of it.  He really didn't have any time for his family, and it was taking a toll.  Another problem was the upgrade didn't go smoothly enough for potential investors (yes, there were a few that were interested including some major major names in the business).  If the pipes aren't working, investors aren't interested.  And of course, the downturn in the economy is a major issue.  Oh well...it was fun while it lasted!  But I also agree that it's a sign of the times.  Too many micros, not enough word of mouth outside the contributors. 

« Reply #20 on: April 16, 2008, 21:34 »
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I think LO had some fairly unique problems which would keep it from succeeding - it didn't appeal to industry & design types.  It appealed to fun, silly, interesting people - but buyers want simplicity.  If I were designing a micro, it'd be like this - see a photo you like, buy it - simple.  Not a ton of razzmatazz - strong search engine, clean interface, very easy to understand and make purchases from.  Everything else could be relegated to a "photographer's side" or a menu item.  Buy. Photos.  That's what we want them to do.

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #21 on: April 16, 2008, 21:40 »
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I saw Bryan post a while back about "going all-in" with the Ruby on Rails development framework. Bad gamble?

rinderart

« Reply #22 on: April 17, 2008, 00:54 »
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I think LO had some fairly unique problems which would keep it from succeeding - it didn't appeal to industry & design types.  It appealed to fun, silly, interesting people - but buyers want simplicity.  If I were designing a micro, it'd be like this - see a photo you like, buy it - simple.  Not a ton of razzmatazz - strong search engine, clean interface, very easy to understand and make purchases from.  Everything else could be relegated to a "photographer's side" or a menu item.  Buy. Photos.  That's what we want them to do.

Agree. It was amataur from the beginning and continued that way. I also believe His wife and kids had nothing to do with it and if thats the case then Thats one of the reasons there was no investors. Theres plenty of money still left out there to get for new business, If you have a product and can sell yourself. It's all about who's asking to borrow. Investors need confidence. We were investors, I bailed and sold my stock 6 months ago. otherwise Lo would be holding my earnings today. No Thanks.

« Reply #23 on: April 17, 2008, 12:36 »
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No good news, just hope this will continue to be an isolated case.

Fewer agencies means more market power for the remaining ones means a weaker position for us contributors.

My prediction has been that strong competition between the micro agencies would in the mid-term lead to a more decent share for us and to more intelligent license terms stopping the lunacy that a Fortune 500 customer pays the same price than a small SOHO buyer.

Looks like I was wrong.

lisafx

« Reply #24 on: April 17, 2008, 16:37 »
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Paul Cowan made a good point on another board, that the proliferation of tiny upstart micros actually hurts photographers.  They cause us to waste a lot of time uploading to small companies that never (or seldom) actually pay off for us, while at the same time they peel some buyers away from the bigger, more lucrative agencies. 

But I do agree that some competition is good to keep contributors benefits going up.  Really, though, I think the Big 7 (with BigStock) are enough agencies to keep competitive.  And sales there would go up even more if they were the only micro options for buyers...

« Reply #25 on: April 17, 2008, 16:53 »
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Paul Cowan made a good point on another board, that the proliferation of tiny upstart micros actually hurts photographers.  They cause us to waste a lot of time uploading to small companies that never (or seldom) actually pay off for us, while at the same time they peel some buyers away from the bigger, more lucrative agencies. 

But I do agree that some competition is good to keep contributors benefits going up.  Really, though, I think the Big 7 (with BigStock) are enough agencies to keep competitive.  And sales there would go up even more if they were the only micro options for buyers...

I agree 100% with the above.

« Reply #26 on: April 18, 2008, 03:49 »
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Paul Cowan made a good point on another board, that the proliferation of tiny upstart micros actually hurts photographers.  They cause us to waste a lot of time uploading to small companies that never (or seldom) actually pay off for us, while at the same time they peel some buyers away from the bigger, more lucrative agencies. 

But I do agree that some competition is good to keep contributors benefits going up.  Really, though, I think the Big 7 (with BigStock) are enough agencies to keep competitive.  And sales there would go up even more if they were the only micro options for buyers...

I agree 100% with the above.

Me, too...which is why I'm in the process of leaving all of the small sites, like Crestock and Canstock.  I've already left FP.  The only small sites I will try from now on are those in different markets.  I'm still waiting for one to open up in Australia, Japan, and the other untapped areas. 

Even though I wholeheartedly supported LO from the very beginning (I liked its kitschy-ness), I also worried that it would more than likely fail simply because there are so many stock agencies already in Northern California competing with each other (BigStock, FP, LO and most recently Albumo). 


 

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