Sunday, July 6, 2008

Digital Railroad's Market Breakdown

I was pleased last week when I stumbled across a BusinessWeek piece on John McCain, which ran an image that was probably 1/2 page, black and white, which had at the end of the photo credit"/". Contemplating DRR's inroads into the market, I found a piece well worth reading - SAA ombudsman David Sanger's Q&A (Charles Mauzy responds to questions from SAA ombudsman David Sanger, 7/3/08) that appeared on the DRR blog, with Charles Mauzy about the shift out of beta for their Marketplace services, their market breakdown, and their justification for the price change paid to photographers from 80% to 70%. We were very critical of DRR's move on this (70 Is The New 80 - Digital Railroad's Mis-Step, 7/3/08), but Mauzy provides thoughtful responses on this, and many other points.

One I'd like to echo, and which StockPhotoTalk did as well, is Mauzy's breakdown of their market:
(Continued after the Jump)

"Up to today our sales by industry segment have been definitely weighted to the editorial buyers. Over the first 6 months of MP 25% of our sales were to Magazine Publishers, 24% to Book Publishers, and 5 % to Newspapers. Corporate buyers comprised 23% and the Advertising plus Graphic Design firms combined for 19%."
As for moving forward, Mauzy went on:
We are very focused on shifting this mix to increase the percentage of sales going into the Advertising and Graphic Design segments where there is still a proven need for higher value rights-managed imagery and licensing fees are higher in general. To add some color to this, over the same 6 month period our average license fee per transaction into the Advertising segment was $609 and into the Magazine Pub segment $243.
Now those are some insightful numbers. It makes perfect sense to be moving in that direction - towards the more profitable per-image sales.

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