By Daryl Lang

Just a year after announcing a new stock photo licensing business with great fanfare, PhotoShelter says it will close its PhotoShelter Collection on Oct. 10.

Staff who worked exclusively on the service will be laid off; the company would not disclose the number of jobs lost.

The failure of the PhotoShelter Collection is another sign of the difficult business climate for stock image licensing. The announcement came the same day that Corbis said it was laying off about 16 percent of its staff.

PhotoShelter will continue to run its Personal Archive service, the company's core business.

In a blog post reflecting on what went wrong, PhotoShelter CEO Allen Murabayashi says that the PhotoShelter Collection's business was not growing fast enough to be sustainable.

Murabayashi adds that the PhotoShelter Collection couldn't compete against market leader Getty Images. "The use of stock imagery isn't growing fast enough to create a displacement opportunity, and Getty is far too aggressive (and smart) to allow secondary players to displace them in any fashion," he writes.

He took a dismissive shot at microstock sites ("I remain defiantly stubborn on the microstock front as ever"), referring to the popular model that offers royalty-free images for just a few dollars each. Microstock images have are increasingly popular with small business and Web sites.

The PhotoShelter Collection advertised itself as a service friendly to photographers. It hosted workshops and other events for the photo community. The collection let photographers set their own prices for royalty-free and rights-managed licenses. PhotoShelter collected 30 percent of the licensing fees, sharing a larger cut with the photographer than most competitors.

But despite the goodwill built up among photographers, three contributors contacted by PDN reported they had never seen a single sale through the service.

PhotoShelter Collection photographer Stephanie Keith, who participated in the PhotoShelter Shoot the Day! event earlier this year, says in an e-mail that the closure comes as a surprise.

"As I had no sales up to this point I can hardly say that I am crushed since I did not rely on them as an income stream, but rather I used them as a way to get people interested in my work and to have another well traveled web presence," Keith says.

Photographer Chris Carroll, another PhotoShelter Collection contributor, also says he had no sales on the service.

Carroll writes in an e-mail that he is a Corbis contributor, but had put some work on PhotoShelter in an attempt to diversify. "I'm now basically sending everything from PS over to Corbis, my goal of diversifying thwarted yet again," he says.

A third contributor, John Fedele, writes that he had never sold an image through the service, but he was disappointed it was closing.

"I applaud their efforts in doing their best to swim upstream against a strong current of industry trends leading to lower compensation for content providers and an overall mediocre pool of imagery," Fedele says.

Last year, PhotoShelter said it would spend $1 million marketing the PhotoShelter Collection in 2008, an effort that included launching Shoot the Blog!, a popular photo blog edited by Rachel Hulin. Hulin is among the staff being let go.

The company will phase out the PhotoShelter Collection site's functionality between now and Oct. 10. Photographers will be paid for all sales until the site closes, the company says. Full details are online in FAQ pages for photographers and buyers.

The PhotoShelter Collection kicked off on Sept. 14 of last year with a launch event at a New York concert venue that was attended by photographers from around the country. At that event, PhotoShelter founder Grover Sanschagrin described the collection as a solution to many of the problems that have made stock licensing unfriendly toward photographers.

"We believe the Internet can actually provide solutions to the questions and the threats it has introduced," he said.

Related stories
- Sept. 14, 2007: PhotoShelter Launching Community-Based Stock Site
- Corbis Cutting Another 175 Jobs, Combines Exec Jobs