One of the biggest challenges African businesses and content writers face is the lack of stock images available for African content. For example, an African spices business needs a picture of an African mother cooking, however, it is difficult to find a quality stock image to purchase. A month ago, we wrote an article on Uber drivers in Africa, similarly, we were unable to find a stock image of an African Uber driver, so we had to use an American driver, which didn’t have the same authentic feel to drive our story.
The increase in brands targeting Africa, content writers, and social media marketing has increased the demand for African related images. That is, images that showcase the people, culture, landscape, and modernization of the continent.
Source: unsplash.com
There are successful companies in the US that have made millions addressing the need for stock images. For example, Shutterstock created an online marketplace that has a library of images that customers can use for their content. Customers pay to use the images (~$4) and about 30% of the amount paid by the customer is paid to the image photographer.
According to Shutterstock, there are 150,000 images added daily. In 2019, the company generated a revenue of $650 million and a pre-tax income of $25 million. So, this is indeed a very profitable business, and since Shutterstock does not include a large portfolio of African related images, the market is wide open for an entrant that focuses on African images.
We initially planned to write an article on starting an African version of Shutterstock, however during our extensive research, we came across an existing company, African Stock Photo, which was exactly the business we planned to exhibit. However, after spending some time researching, we noticed that the website was shut down in August 2020. We were curious as to why did a business that delivers such value shut down?
We located the founders of the company based in Nairobi, Kenya: Sitati Kituyi and Dicky Hokie. Sitati was gracious enough to meet with us, and he explained that African Stock Photo started in 2016 with the mission to tell an authentic African visual story to help address the under representation of urban Africans in stock photography.
They initially tried to raise money from investors, but at the end of the day, they had to bootstrap and fund the company by themselves. After they launched, the community quickly grew to hundreds of photographers across Africa. Growth was steady but slowed down over the next 3 years. Sales sometimes covered their running costs, but not always reliably and they still had to dip into their savings to keep the business running.
They assessed the business and identified a few issues:
- Photographers preferred to get paid upfront for their images as opposed to royalty payments
- Despite the large population of competent photographers in Africa, only a limited number have the correct legal arrangements e.g. model release rights in place for stock photography, leading to a limited number of available images
- Adding to the limited supply of images was photographers’ preference to add a couple of pictures to see if they make some money before adding more images down the road
- On average only 1 out of a 1,000 people who visited the site actually purchased an image because customers most likely did not find the exact type of image they were looking for due to the limited supply of images
To address the supply issue, the founders partnered with an American-based stock photo company, Deposit Photos, that had over 170 million images. Deposit Photos was able to supply them with additional African-themed images, that way if a customer searched African Stock Photo and used an image from Deposit Photos, African Stock Photo paid Deposit Photos a percentage of the revenue. The arrangement worked quite well because it increased the number of pictures African Stock Photo had from ~8,000 to ~12,000 images.
Also, most of the revenue African Stock Photo generated was from pictures contributed by Deposit Photos because Deposit Photos had more pictures of people which are in higher demand than pictures of landscape, art etc. The one drawback of the deal with Deposit Photos is that African Stock Photo had to pay an annual fee of $5,000 to use the images, of which African Stock Photo was unable to sell enough images to meet the $5,000 annual payment in addition to other expenses.
After reviewing the business model, the founders decided to shut down the business in August 2020. They sent a notification to their subscribers and a lot of individuals were sad to see the business go away, and ironically, many investors then came knocking to potentially invest to keep the business running.
However, the founders didn’t think that the business model was sustainable long term, and they will have to re-think the strategy. The founders received a few offers to buy the business, however, they do not believe that the time consuming due diligence and extended buying process is worth the potential upside of selling the business.
Below are a few figures associated with the operations:
- Number of contributing photographers: 296
- Number of images: 8,380 (excludes the 4,000 Deposit Photos images)
- Revenue: $5,445
- Site Visits: 176,683
- Net loss: $9,204
If I were to start this business today, here are a few ways I might go about it, based on our learnings from Sitati:
- Buy a stock photography marketplace site template and then pay a developer to customize the site. This will help reduce the time, cost and effort to setup the website.
- Start with a budget of ~$50,000, identify African forums, Facebook and Reddit groups where photographers reside and start an ad asking photographers to send their images for $1 per image and then they will also receive 10% royalty for each photo used.
- The website will go live with a minimum of 35,000 images. I will have the photographers submit a minimum of 100 approved images to get paid.
- I will not limit the contributors to only professional photographers; I will allow regular individuals to submit their images as long as it has the appropriate release rights and meets quality standards.
- I will spend significant money on SEO and social marketing targeting African entrepreneurs and content writers globally informing them of this new service
