“The idea for this company has been around for ten years, back when we had a budget of a few thousand dollars”, said former SABA picture editor and photographer Nisselson.

His company, Digital Railroad this week launched the public beta of a project which puts it head to head with established stock giants Corbis and Getty. Backed by $15.5million of venture capital, Nisselson is bullish at entering an overcrowded market a time of low market prices.

“The stock photography industry is worth $2.5billion, and the big players – Corbis and Getty – only have a 40% market share of that.”

As an indication of how different Digital Railroad’s business model is from conventional stock sites, at a time when Getty has been seeking to buy up other companies, from the $200m purchase of WireImage, the unsuccessful recent bid for third-biggest player JupiterImages to the purchase of relative newcomer Scoopt, Nisselson said that Digital Railroad had not been approached by either of the major industry players.

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The company recently announced a second round of funding had raised $10m from venture capitalists, in addition to $5.2m raised in 2005. Nisselson, who says he “put his money where his mouth was” by investing significant sums of his own money in the company, says that there are no current plans to seek further funding in the future, but would not go into details as to how the $15m funding will be spent.

“We didn’t want to restrict our photographers”

Digital Railroad provides photographers with individual searchable archives integrated with their own websites, as well as the online storage space and ability to transmit files directly to their clients. Photographers pay an annual fee, plus 5% of the sale price if they use a Merchant account to accept payment via a credit card.

“But what we discovered is that in the stock photography market was that only 10% of sales were made via a credit card.”, says Nisselson. “90% of sales are done by invoice or by credit account. We didn’t want to restrict our photographers to just 10% of traffic.”

With the launch of Marketplace, photographers now have the ability to add their individual archives to a central searchable archive, allowing buyers to search all archives in real time from a central website. Sales made via Marketplace are on a 80%-20% split in favour of the photographer, and the payments are handled by Digital Railroad


The Digital Railroad marketplace interface

At the time of writing, Marketplace has over a million images searchable. While this represents only a small number of the total images available in all the individual Digital Railroad archives, Nisselson says that number is rising rapidly, although he won’t be drawn on their internal targets for the number of images or photographers they are looking to sign up to Marketplace.

However, other stock agencies have recently seen an exponential rise in the number of submissions. Oxford-based picture library Alamy took five years to reach an archive of 3.5million images, but then doubled their archive in the sixth year.

Initial trials

While the initial trials involved a high percentage of editorial photographers, Nisselson says that the current split of editorial and commercial photographers is roughly equal. “We originally focused our technology services to meet the needs of photojournalists who, by the very time-sensitive nature of their work, need the fastest work-flow. Tools fast enough for photojournalist deadlines will be more than fast enough for all other photographers.”

While the beta launch of Marketplace, which was first announced in October 2004, has been heavily delayed, Nisselson says it was important to build up high quality content before going live, and stresses that it is more of a priority to have quality of content than sheer numbers of images. Marketplace is expected to come out of public beta in the next few months.

In this years World Press Photo awards, fourteen of the winners were either photographers with Digital Railroad accounts, or were represented by agencies who were clients of Digital Railroad

Nisselson, who has an infectious enthusiasm for his vision, remains bullish about the prospects for stock photography, even in the same week as one stock library began to give away its pictures for free. He argues that the emergence of microstock – where royalty-free licenses are sold for typically a dollar apiece – has coincided with a simultaneous growth of demand for stock photography usage on new media such as the internet, and so that the market price for traditional stock imagery uses remains relatively unaffected by microstock.

He also argues that the evolution of new business models need not necessarily lead to the extinction of older ones.

“I remember when most work was commissioned, and the photographers who used to shoot that resented the photographers who offered rights-managed (RM) stock to the publishers. Then along came subscription stock sites, and the RM photographers didn’t like that. Then along came royalty free, and the subscription stock sites photographers didn’t like that. Now we have microstock, and what I call micro-microstock, and its the same again”

Nisselson concedes that the stock photography market has changed dramatically over the last decade, but says that the advent of the internet and broadband access has given Digital RailRoad the platform on which to build his vision.

But what will be the next technology breakthrough ? Nisselson is uncharacteristically coy when asked: “Just watch this space”.


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