Yahoo’s fate was pretty much sealed in the aftermath of Microsoft’s take over attempt.  Shortly there after control of the firm shifted to a handful of wealthy individuals who’s only aspiration was to maximize the short term return on their investment.  Yahoo will die or be torn asunder trying to met their demands.

So what about Flickr?  Which without exaggeration I think can be described as one of the few great cultural achievements of the last twenty years.  What can they do to it?  What will squeeze the maximum return on investment out of it?  Fast.

Here’s a possibility: Yahoo is sells the Flicker community to Getty Images.  Let me explain.

While opinions vary about copyright’s fate, everybody agrees that copyright is looking a bit sickly right now.  The internet upset the traditional distribution barriers, barriers that encouraged bottlenecks.  Bottlenecks where copyright fees could easily be collected.  The physical world analogy for this transformation is a toll bridge over a fast and dangerous river.  If the river dries up it’s going to be hard to get people to pass thru your toll booth.

One school of thought argues that technical and physical realities have changed; and that makes the copyright business models obsolete.    Moral or legal arguments are irrelevant if they are physically impossible to implement.  And much the same way that you can make compelling arguments against extreme disparities of wealth, you are severely limited in how much you can do about it.  You can temper it, but you can not eliminate it.  You can temper our inability to pay creators of information goods; but you can’t eliminate it.  It’s not like they aren’t going to do it anyway.

Another school of thought holds that shifting distribution channels are nothing new.  Each time one emerges there is a period of, to use the analogy, untaxed river crossing.  And each time bottlenecks emerge and it becomes possible to collect the tolls once again.  And there is a lot of history to suggest that’s the case.  Distribution networks, like all unregulated networks, tend to condense so their are hubs.  A boatload of efficiency emerges out of that condensation.  The standardization they enable goes hand and hand with the opportunity to collect a toll.

One of the pleasures I get from thinking about his stuff is the stories.  Here is an amazingly fun story about condensation in a distribution network involving dope smoking, junk food, and the cash flow of the a distributor.

A common 20th century pattern in shifting distribution channels was the roll-up.  Early in the century every city had it’s own department store, and by the end of the century these had all merged.  Early in the century every neighborhood had it’s own hardware store, privately owned by a single proprietor.  By the end of the century national chains had displaced or rolled up displaced the neighborhood business.  At this point there are very very few locally operated businesses.  The pattern that a new industry starts with a diversity of vendors and condenses into a few is surprisingly inevitable.

Which brings us to Flickr.

Flicker is a photo sharing community.  It is a direct competitor to the more traditional stock photography industry; companies like Corbus and GettyImages.  These businesses provide a place were a publisher can shop for an image, pay his toll, and get back to work.  They are classic two sided network buisnesses; bridge between the photographers and the publishers.  Keeping most of the revenue for themselves.  Their success depends entirely on the vitality of copyright.  No doubt all those images at Flicker under liberal creative commons licenses have undermined the value of those businesses.  Copyright is pretty sick these days.  Thus, years ago, when Bill Gates bought Corbus by reaction was a combination of “wait!, copyright’s on it’s deathbed” and “oh, he think’s it will recover.”  Markets climb a wall of worry, and all that.

In talking about Corbus the Wikipedia page states: “By buying out the many family-owned businesses that created the field, Getty and Corbis are in the process of “rolling-up” the stock photo business.”

So.  How would you go about rolling up Flicker into your stock photo business if you wanted to?

This morning a friend, who has a delightful popular presence on Flickr was invited by Flickr and GettyImages to sign an “Contributor Agreement for Photo Sharing Content.”  The incentive was that she might receive a 20-30% share of any royalties they collect.  It includes this clause:

“Exclusivity:  All Content accepted by Getty Images is on a Content exclusive basis. Such Content and any Similars may

not be submitted to any third party for license, sale or distribution. However, on a non-exclusive basis, You

may use Content and any Similars for Your personal or self promotional, non-commercial use, including

Photo Sharing, provided that You do not compete with or limit the rights granted to Getty Images under the

Agreement. On an exclusive basis you may use Content and any Similars for limited edition, signed and/or

numbered fine art prints (though Getty Images retains the exclusive right to sell and license prints not

signed or numbered).”

So let us imagine how this plays out.  Currently thousands of pages on thousands of sites around the Internet are decorated with images she created.  After she signs this agreement the bots working on behalf of GettyImages quickly discover them all.  Actually, I suspect thier bots already know this information and they invited her to sign up because they know her images are widely copied.  The also know she didn’t already relinquish her rights with a liberal creative commons license.

She currently manages the “enforcement of rights” problem her self.  Trading off the chance of some royalities against the cost of chasing after those royalities.  But since she makes her income from the work she photographs the wide distribution of the photos has many beneficial effects.  It builds her fan base, it’s advertising, it contributes into the community she her work is situated in.  So how to manage the enforcement problem is more subtle than it might appear at first glance.

Not so for GettyImages, their business decision on enforcement is simple.  For example if sending a note to every site with one of my friends images on it asking for a toll maximizes revenue, why not.

So, I think, Yahoo is selling the Flicker community to Getty Images.  I wonder if Google could do something analogous with their image search collection.