Extreme Taco Stock Image Plus is a stock image service provider that offers a new level of support in the B2B space. We intend to revolutionize the industry by streamlining operations, minimizing website administrator time, and improving website performance. This white paper explores stock image market opportunities from a 30k foot view.

Addendum of errors and addendums can be found in either this separate post or YouTube Video.

Introduction

For years, stock image service providers have given the same tired solution to businesses seeking to refresh their imagery. This age-old solution is monthly image packs. These packs provide too many images for the typical business and do not address some of the other core technology needs that modern businesses have. Extreme Taco Stock Image Plus aims to revolutionize technology and operations for real-world businesses.

We will start this whitepaper by addressing market incentives. In this section, we will review general pain points that our clients have. In some detail, we will review current business processes and how we will improve them. Additionally, we will review the technology needs of real businesses. Finally, we will review how we will secure image licensing for Extreme Taco Stock Image Plus.

Market position is critical to success. We will review the existing marketplace and how the incumbents address B2B market needs. Our product Extreme Taco Stock Image Plus does it better, but we will need to demonstrate how to differentiate ourselves from a service and pricing perspective. The future does not look bright for our competitors.

For the critical techies, the last topic we will cover is general architecture and hardware/software considerations. This section will go into our use of a CDN and how we intend to maximize value while minimizing costs using creative hardware and software solutions. This will round out our documentation by outlining how the system will generally function.

You will find Extreme Taco Stock Image Plus to be the ideal solution for website stock images moving into the future. This is an ideal investment for anyone that knows how profitable the B2B space can be, and a game changer to reduce costs for growing businesses of all sizes. Extreme Taco Stock Image Plus is the stock image provider of the future!

Incentives

Client Motivations

Stock Image Pain Points

Clients have many pain-points when it comes to stock imagery. Typically, these pain points become more apparent as organizations grow in size and become targets of litigation. The most common complaint from senior management tends to fall along the lines of legal concerns, while low-level employees tend to focus on business agility (ease of decision making). These are not easy issues to address at the same time.

Broken out into bullet form, the pain points as listed are:

• Legal risk
• Business agility
• Branding guidelines

Business agility is the core point of relief we are addressing. The cause for reduced business agility is sluggish operational performance, typically caused by legal compliance and branding requirements. The other concerns compound and can freeze decision making for years.

Easier Decision Making

The pain-points that we are best equipped to address are agility and legal concerns. We believe that the reason why these two seem so at-odds with one another is that they are closely intertwined. Redundant workflows are one of the key sources of waste in any organization. If a single process can be eliminated forever, it is typically a good idea for an organization to take the time and do so; this often holds even if it takes costly senior executive time.

With any stock image that an organization purchases, employees need to go through a series of administrative steps (whether they know it or not):

• Brand Compliance Approval / Creative Review - ensures no duplicate purchases because an employee purchased a bad stock photo
• Financial Authorization to make the purchase - ensures management agrees with the decision
• Image Licensing Verification - reduces risk of litigation

It is our experience that clearing all three of these hurdles can take many months and sometimes years in large organizations. In such companies, this takes an extremely motivated employee to update images at all. Often, the shortest timelines for final approval occur when an enterprise is launching a new website, where many of the financial hurdles are addressed over months before the project even begins. The minimum time-frame we have found in companies with over 150 employees is about 2 weeks.

We plan to have our partners lease imagery on a per-view basis, rather sell restricted ownership via licensing. This means that the business decision to work with us offloads the Image Licensing Verification step from above AND the Financial Authorization process for any replacement images. Businesses will be able to update the look and feel of their website homepage every month if they so desire, with no additional charge. We are offering flexibility and agility to make businesses stand out.

Finally, as we address the pain-points of growing businesses, we will digitally load these images over lightning fast CDN servers. This will allow our clients to scale to any size while maintaining enterprise-grade quality and performance. The one decision to use our stock image service eliminates a whole host of approvals, processes, and future business decisions.

Our Competitive Advantage

Ease-of-use and innovation are Extreme Taco Stock Image Plus’s primary value propositions above other stock image providers. While our competitors require photos to be purchased, downloaded, and then re-uploaded to company-owned servers, we will load our images directly to our clients’ websites and apps. This gives us a number of market advantages, specifically: liability, analytics, and performance improvements. We will discuss performance in greater detail in the technology & infrastructure portion of this plan.

Liability Protection for your Lawyers

On face-value, centralized control of stock imagery appears to be a disadvantage but we will demonstrate this perception to be false. It seems intuitive that a business would want to own its stock images. One can quickly dispel the myth of stock images ownership simply by looking into stock image licensing terms. Let’s have a look at Shutterstock's terms, “PART I – VISUAL CONTENT LICENSES”, “Standard License” bullet 1. a. i. 5. (this is where lawyers get you):

For your own personal, non-commercial use (not for resale, download, distribution, or any commercial use of any kind)

Seems straightforward enough, but...

Let’s get Socratic and ask a question about this phrase:

Q: If you have a personal website, are people capable of downloading images from it?

A: Of course they can, it’s on the internet…

Q: So could Shutterstock sue you for downloads and distribution?

A: Probably, it depends on how motivated they are and how big your wallet is

These are the kinds of legal liabilities that growing companies ignore when they are small (small targets), which they realize are big problems as they grow. Note that this may be one of the drivers for why the largest companies (think Coca Cola) hire photographers for privately controlled shoots. By sourcing images from a centralized server, Extreme Taco Stock Image Plus’s clients offload that risk to the image host (us) and avoid the costs associated with hiring a copyright litigator.

To close: I have been told, “not even the lawyers fully understand copyright.” The current market situation is scary.

Analytics and the Power of Information

Information is power and we will have more of it. Our centralized control gives us more insight into how images are used than the market leaders. We will understand:

How frequently images are actually used - most stock image websites have no way of verifying the actual number of loads/impressions for stock images, and clients are unlikely to accurately report that information up the market channel

• What photos are trending - information gleaned by reducing the barrier to swap out stock imagery
• What are the most popular resolutions and parts of images are used - each image load request from our client’s websites will be accompanied with custom resolution and coordinates for a pre-cropped image load

Extreme Taco Stock Image Plus’s model is to charge on per-view bases through a centralized system, we will track these metrics as they are core to our revenue and P&L. Other information, such as trending photos and popular parts of images, is helpful information which can be used to help coach new authors, such as Creative Designers and Professional Photographers. Regardless of the source, this information will give us the information needed to be more responsive than the competition.

Motivation for Our Authors and Creators

The initial pain-point of any new entrepreneur is making the first dollar, the second challenge is usually generating a steady income. Once the business begins to grow, the concern changes to concerns about theft. As Extreme Taco Stock Image Plus is leasing access to imagery, we have two major advantages for these creators: steady income via royalties and intellectual property protection.

Most stock photo providers give sales-based commissions to its creators; our model will be materially similar. The key difference between our service and our competitors is that our platform creates residual income for our authors. We will pay our percentage of the revenue for every 1,000 times an image is loaded (percentage rate is TBD). Couple this with the fact that our model makes it easy for businesses to seek new and exciting imagery, and it is clear that new contributors in our system are more likely to make their first dollar quickly. This dollar is the first of many, as our client base continues to lease access to the image with each consumer page-load.

We understand that some content creators have concerns with our model that as quickly as they begin making money, a business can take that income away. While we cannot completely disregard this concern, as it is one of our product’s main selling points, we request that authors consider the way that businesses operate. Businesses crave stability and the option to change out imagery does not always translate into swapping out images on a weekly basis. We encourage all of our contributors, not to look at our service as a “get rich quick” scheme to strike it big with a handful of stunning photos, but as a steady income stream to help flatten the boom and bust cycles of the creative sphere.

We protect against Intellectual Property theft as an inherent feature of our centralized system. Because our images are all stored on our CDN, any time that an image appears from a different domain, the authors and we know that the image has been stolen. The pay-per-view nature of our model insulates both the buyer and seller from the headaches of the legal system.

Many or most photographers and creatives will find this model attractive. Our revenue model and the authors’ general interests are intrinsically linked.

Market Positioning

Incumbent Model

The current competitive landscape is tightly controlled by legal usage agreements. Every business must carefully consider its options before licensing an image from any other stock image firm.

Among the legal requirements, the stock images are often controlled for a specific number of uses. Again, Let’s have a look at Shutterstock's terms, “PART I – VISUAL CONTENT LICENSES”, “Standard License” bullet 1. a. i. 5. 3. (among the most generous available):

As part of an "Out-of-Home" advertising campaign, including on billboards, street furniture, etc., provided the intended audience for such campaign is less than 500,000 gross impressions.

The costs of stock images can vary by several orders of magnitude at the extremes. More typically they range from $10 to $100 each. Images that cost less than the high end of that spectrum typically have limited uses, often half of the views offered by Shutterstock at 250,000 impressions. These costs and impressions do not tell the whole story.

It is important to note that the vast majority of stock photo purchases never get anywhere near even 250,000 impressions. In our experience, as a digital firm with a background in advertising, the majority of image downloads are lucky to get 10,000 impressions. Certainly there are edge cases when a marketing campaigns go viral, and of course website homepage assets can get a substantial number of views, but these well-used images are rare. Most of the time these assets have a massively underutilized impression ratio.

Shutterstock and others mask their actual costs with bundled and subscription pricing, making business dollars spent difficult to quantify explicitly. These subscriptions are designed to create breakage via underutilization of the business’s subscription. Agency experience shows that there are months when businesses use far fewer images than allocated by a subscription; there are other months when the business needs to wait a few days for credits to replenish. For all but the largest marketing networks, the going rate for images seems to be around $10 per image; for most non-agency businesses this cost is often substantially higher.

Again, this example is taken from Shutterstock

Now that we understand the impression breakage and business licensing breakage, we can now estimate the actual cost per impression per image. This analysis will require some basic arithmetic and core assumptions to suss out details. We are going to assume a price per image at $10 (based on Shutterstock’s 5 image bundle) and average total views at 50,000.

• $10 / 50,000 total views / 1,000 views = $0.20

So we can see that the cost per thousand views is 20 cents. This number does not provide any infrastructure support, such as a CDN connection. You may have some concerns with our value assessment and we are glad you are keeping up. Major questions and concerns are addressed in our 3 Devil’s Advocate points below:

• Images will have considerably higher views than that - this is a fair point, homepage images will frequently have substantially higher views
  • There will be breakage with interior page images, which rarely get viewed and still cost $10
  • Websites that have substantially higher total average views will get into legally at-risk range and need to step up to premium “unlimited use” licensing
• $10 is too much for stock images, monthly subscriptions can help get these prices even lower -
  • As mentioned in the “Easier Decision Making” part of this document, these subscriptions are typically used by agencies and not other business types
  • In our experience, $10 per image is a really solid and low market rate
• Why focus on 1,000 views? The number seems arbitrary - we are trying to keep numbers within human readable range and 1,000 seems like a fair and easy to understand divisor

We hope that you are starting to understand the incumbent model more clearly now! Stock photo market leaders make money by charging for underused images and overselling clients into packages with breakage. Their services also bear the risk of exposing clients to legal liability. Finally, these companies provide zero distribution service even though they are positioned in the market to do so. So far as we can observe, nearly all stock photo services are structured very similarly to this. The market is ripe for disruption.

Our Model

The disruption that we are adding to the market is that users will only pay for what they use. Users will pay on a per-view basis (counted by image loads) coming from our CDN to ensure the best possible pageload experience, and as mentioned before, all growing businesses will have the piece of mind knowing that legalities are covered. We provide premium service and with it comes a very competitive price for the level of legal protection and hosting service that we provide.

Our rate will be set at 35 cents for every image view (counted as a load from our CDN). To reiterate what is included in this pricing, so you understand how we arrived what value we provide, review the following:

1. Reduced client-server overhead
2. Eliminated risk of IP lawsuits
3. Superior speed
4. Our image resizing service (discussed in greater detail later)

Within a typical use-case, we anticipate that users will pay approximately $17.50 per image as compared to use-cases similar to Shutterstock or similar services on a complete page load. Fortunately, we have a plan to ensure that our users are charged only for what they use and it is related to how the images will be loaded on their web pages.

Image resizing services are worth discussing here insofar as it affects cost. We will be resizing images based on clients’ needs and allowing them to crop the images for webpage loading. What is far more important to costs, however, is that we will give embed codes to our partners to drop into their web pages based on their resolution and cropping needs. This is an incredibly important detail with costs, since Google announced that they will be adding support for Lazy Loading in Chrome via HTML using the loading = “lazy” instruction.

In an age where mobile designs are increasingly important, web pages are getting longer, which reduces the frequency that users will make it to the bottom of a web-page. If we assume an optimistic 75% image load with lazy loading enabled, this brings our total cost down to an extremely competitive rate with the lowest priced market competitor (Shutterstock), regardless of our service level.

Our model is disruptive. We are empowering our partners to make faster decisions, protecting them, offering top-speed hosting services, and doing all of this at near-bottom market pricing. Many of the pay-per-download stock photo service providers will struggle to stay in the market after our product launches.

Technology

We are a services company and there are two ways that provide value to our partners. The above sections delt with content aggregation services. This section will discuss how we can serve our clients with technological content delivery.

Content Delivery Network

As mentioned in detail above, we will use a CDN to load images for our partners. The advantages of this service include reduced complexity for our clients’ server configuration, faster load times, faster seek times, and reduced processing requirements. Our clients will only need servers that generate dynamic pages and handle instructions. This means that they will be able to spend less time managing their website and more time doing business in their core competencies.

Content Delivery Networks (CDN’s) are server infrastructure that specializes in delivery content in the form of photos and images. This specialization of purpose means that CDN’s are located in major network nodes, lending major advantages from a site visitor perspective:

• Proximity - CDN’s are located near major network nodes, which means that they are never far from where a site visitor is placing an HTTPS request. Requests take time to travel geographically, so CDN’s ensure faster load-times by reducing latency (time to respond to a request)
• Bandwidth - CDN’s are located on major network nodes, plugged into network backbone ensuring that they can send as much data as possible
• Hardware - CDN’s capitalize on low latency and high bandwidth with the fastest hard drives possible. The servers on these networks typically require minimal processing power and very large, extremely fast, solid-state hard drives known for fast seek times, and low latency and high bandwidth in their own right

Our service will also reduce the system requirements on our clients' servers, in addition to improving image content delivery speed. This is accomplished because our partners’ servers will no longer need the processing power to adjust image sizing, for example, displaying a small thumbnail of a larger image. Our partners’ machines will simply need to generate CSS, JavaScript, and HTML to run on their consumers’ local computers. Finally, their servers will require less space, as most of the large media will be hosted on our system instead of their own which again, reduces their external hardware budget.

Predictable hosting costs and reduced complexity is a benefit for businesses of all sizes and structures. As mentioned earlier, we believe that growing businesses will benefit the most; especially small and medium-sized companies. Scalable and simple system design, much like scalable operational and legal frameworks, are invaluable to companies that are growing as it reduces liability and Business Process & System Re-Engineering (BPR & BSR) costs.

The core advantage of our CDN is performance and simplicity. Our system offers the fastest content hosting available due to high bandwidth and the lowest possible latency at every turn within the hardware ecosystem. Simultaneously, we will offload much of the work that our clients’ systems need to do, enabling them to keep their architecture simple. As mentioned above, we want to keep our clients focused on what they do best.

Other Architectural Considerations

Hardware Solution

To minimize our costs, we will need to maintain compressed files at appropriate resolutions for our partners. Additionally, the images that we host will need to display the parts of the files that our users want to display. Both of these together mean that our system needs to be able to crop images, maintain downsized versions of the files, and deliver them to our partners rapidly.

Without pre-cropping, our systems would need to be running our CPU’s 24/7 constantly downsizing and compressing files. This is extremely expensive and would add latency for our partners; as mentioned above, we are a high bandwidth / low latency provider and cannot compromise performance when it can be avoided. Our servers will have the ability to store and index files that our partners use based on requested resolutions and cropping bounds. Once cropped, the images will be stored and indexed, and our client will be issued an embed codes for their website.

We will need to make one compromise to performance to minimize our storage costs. We will use a machine-learning algorithm to cull dormant images from the system regularly. Culling images may add some latency on infrequently used images, which we believe is a worthwhile trade in instances when a specific web-page has not been loaded in weeks or months. Given the inexpensive nature of storage, any performance reduction here will be extremely rare.

One final question:

Q: You may be asking, _”why not send the entire uncompressed image to the user’s browser? This would save on CPU and storage costs?”

A: This is a fair question but there is one more cost center that we need to focus on, bandwidth. Large images cost more money to send for us and the general public, AND they slow down page-load depending on the end-user’s internet service. This is particularly important for mobile users. Full-size images are a non-starter

This central processing is necessary for clients to crop benefit all parties involved. Our operational expenses are minimized due to reduced bandwidth costs and CPU expenses, our clients get fast/low-latency access to images, and end users get fast websites that do not impact their mobile data caps. The processing of cropping is an obvious inclusion in our product solution.

Cropping Tool

To continue to promote accessibility and reduce web-admin costs, we need user tools to feed into our centralized processing resizing servers. Considering that we are a web-based digital-only distribution platform, all of our activities must take place in the browser and must be accessible to general business users. We plan to use existing software to support our project rather than using a homebrew solution.

We will use a GUI cropping and downsizing tool to help our clients use the portions of stock imagery which are of the highest importance to them. There are several tools in the market that help users resize images for web-use for both cropping and resolution selection. Our preference is to integrate open-source projects Croppy with ImageResizer to meet our clients’ needs. This software can be stylized to be user-friendly, to ensure accessibility to our product for normal business users rather than website administrators.

It is important to note that our software solution is targeted at keeping our clients’ business costs as low as possible. While continuing to address the pain-points, we are keeping users from falling into other pitfalls such as including website administrators or hiring additional graphic designers. Our partners that have these team members will be entirely free to loop techies and creatives into the process should their processes dictate, but we need the software to be as flexible as possible to keep staffing options open.

Conclusion

We are the next-generation solution that will make enterprise-grade business websites available to companies of all sizes. Rather than approaching the market with a tired old model of competing on pricing and selling subscriptions that our clients will forget to cancel, we are addressing the root causes of our clients’ pain points. Our complete marketing and architecture solution is innovative and easy to use for our clients.

Our clients have a variety of pain points including operational costs, staffing costs, decision-making costs, and image licensing costs. These pain points are exacerbated in any organization undergoing growth due to organic market position or acquisition. We simplify process flow and minimize all of these costs by combining image licensing and hardware sourcing into a single package. There is a market need for this product and small to large size growing businesses are ready for our disruptive solution that will minimize their short, medium, and long term operational expenditures.

We are well positioned in the marketplace. Our competitors such as Shutterstock, Adobe Stock, and Getty are fossilized and in market consolidation mode. This is a dangerous position for any company in the online space, where innovation is king. While these companies have incredible technology and incredible selection, their improved market offerings are all focused on selling subscriptions for image packs rather than making their clients’ lives better. Our mission is to reverse this trend and displace all of the major stock image providers by relieving our clients’ pain points instead of selling image-pack subscriptions and hoping it helps.

Our technology provides services that none of our competitors can match and our partners desperately need. A CDN network is flexible and scalable as our clients grow, and our software makes our product easy to use. The underlying architecture is structured such that we will minimize operational costs on launch, which will be helpful as the incumbents struggle to catch up. We plan to offer the best balance of performance to cost ratio of any solution currently on the market.

The future brings continued integration of operations, hardware, and software solutions in the B2B space. The market shows that B2B technologies such as image editing software makes its way into the consumer space as costs decrease. Likewise, contractor concepts such as AngiesList made their way into the B2B space with services such as UpWork. Our product is a logical progression of this market trend into a space with very old and sluggish incumbents.

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