Flickr's terabyte move: brilliant big bet or desperate call for attention?

Flickr announced yesterday that they are offering one terabyte - yes, that would be 1,000 gigabytes - of free storage for still images of any resolution and HD videos up to 3 minutes long.

They also redesigned the Flickr experience. Personally I like the new design, although I am sure there will be as many opinions on this as there are die-hard Flickr lovers out there. Check out my new Flickr profile and photo stream here.

Yet, the real question has to be how can they afford to do this? We all know that storage is becoming really, really cheap. BUT cheap does not equal free. Even Google, with their infinite compute and storage resources, made a big thing last week at Google I/O out of the fact that they are offering 10Gb of free image storage at high resolution, with unlimited storage for your low resolution images. Just in  case it doesn't jump out at you like it did at me: 10Gb is 1% of 1Tb!

So what's the deal? Here is my simple logic and theory:

• Y! needs to make some big bets to become relevant again in the imaging and photo sharing space.
• Tumblr and this Flickr reboot are undeniably big bets
• The new Flickr is an arbitrage play. Here is how it works...

Let's look at Amazon Web Services (AWS), arguably the largest "off the shelf" cloud storage service available to developers of websites and apps. For instance, a big part of Smugmug, a competitor to Flickr is using AWS storage solution (S3) to power their image storage. The AWS list price is $0.05/Gb/mo. In other words, $50/Tb/mo.  Amazon has a really good margin on their storage at that price. Let's assume that Yahoo could build their own, large scale storage solution at 50% of that cost. Heck, I'm feeling generous this evening so let's even say at at a 75% discount. That makes their internal cost $12.50 Tb/mo, or $150 year.  

Now comes the tricky part.  How many photos will the average user upload? I'm going to make a wild guess and say that the average storage utilization will be… 10%? In other words, on average, across all users, it's costing Flickr $15/user/yr to service them.  These prices represent storage costs only. We probably need to add in ballpark 10-20% for compute and bandwidth. But, I'm still feeling generous. Let's stick with $15/user/year. In order to cover this cost, Flickr must monetize their traffic with advertising, which has become a more visible and integrated part of the new design.

I think Yahoo is betting that this will be an arbitrage play with a bipolar usage distribution. The majority of people will only use it a small part of their storage, primarily for smartphone photos. These users will probably be averaging in the low 10's of Gb's of total storage used. On the other end of the continuum, a relatively small minority will actively utilize the full free 1Tb or significant portion thereof. If you actually upload 1Tb of images and video to Flickr, it's probably safe to claim that you're a die-hard and/or a professional photographer. Therefore some of these people will opt for the $499 package that Flickr also announced, which doubles your storage to 2Tb. Again, this will likely be a very small segment in the end, surely less than 1% of total users. Given the price analysis above, at $499 for 2Tb, Y! still makes a healthy margin on these customers.

Returning to my back-of-the-envelope analysis above I conclude that If Flickr can get the arbitrage to work, they should be able to make a break-even or slightly profitable business with this play. Meanwhile, they're showing strong leadership, getting lots of attention and, if successful, driving many more eyeballs to the site - which of course fuels their real revenue engine of advertising.

My vote: a brilliant big bet

Nordic Light 2013 in pictures

Einar Sira, an exciting up-n-coming Norwegian photographer

Steve McCurry and Morten Krogvold

Panel discussion summarizing conversations from the Beyond Pixels un-festival

Knut Koivisto

Anne-Lise Flavik, the director of Nordic Light

Rebecca Norris Webb and Alex Webb in conversation with Morten Krogvold

For more photos, click here

Taking Pictures or Making Pictures.

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“Give someone a flute and they own a flute. Give someone a camera and they’re a photographer”. This quote kicked off a discussion last week among a group of technology people and photographers about what it means to be a photographer. The conversation happened at Beyond Pixels – an un-festival of photography that I co-hosted with Mikkel Aaland in Kristiansund Norway. Beyond Pixels was planned and organized in collaboration with the Nordic Light International Festival of Photography.

Steve McCurry's famous image of the Afghan girl on the cover of National Geographic. McCurrey, a guest photographer at Nordic Light this year, has spent a career consistently making iconic, powerful photographs.

You’ve heard the number; billions of pictures are taken, shared and liked online every week. In a world where more and more people carry a smartphone with a camera, we’re all becoming picture takers. Yet does that make us photographers?

Surely taking a picture is easy: point and push a button and with smartphone photo apps that sport and seemingly unlimited filters and effects, it's easier than ever to give a picture an "artistic" look. With enough people pointing and pushing beautiful “signals” will rise from the flood of pictures. Indeed many interesting, fun, informative and exciting pictures will and do surface from the overflowing digital streams. Still, what makes some people take the occasional good picture while others are proficient at consistently making interesting pictures.

As with all art and expression the definition of “interesting” can be subjective and certainly contextual. A picture of a small child may be interesting when seen by a family member, but uninteresting to the rest of us. Yet there are some pictures of small children that transcend the subject and capture something more, something universal. Why does one person with a camera take a picture that is “just” a picture, while another makes a picture with universal appeal?

 Alex Webb, my favorite street photographer, makes photographs that capture the world in a way that pulls you in, asking questions, laughing, wondering?

While anyone can take a picture, to make a picture involves a few basic ingredients:

1)   skill. Making a picture is a skill. Some people have it. Some don’t. Like any skill it is something that can be learned and honed over time And some people have innate abilities and a drive that makes them masters.

2)   storytelling. Making pictures is about expression, communication and telling stories. Photographer make pictures that tell stories. Some pictures stand on their own while others belong together. Pictures can be poetry and abstract, they can be funny, they can be literal and descriptive. And with photographs just like with the written word, there are forms and “genres”.

3)   mastery of the tools. Making a picture requires tools. Whether it’s the camera, editing software or screen calibration for printing, mastery of the tools is a part of what separates the makers from the takers. Selecting, “producing" and editing a picture is often as important to the picture making process as capturing it in the first place.

To be sure, lots of photographers make bad pictures. Knut Koivisto a Swedish photographer perhaps best known for his portraits, pointed out last week in Norway that many professional photographers do not make very good pictures, while many amateurs make wonderful pictures. The camera is a tool, just like a pen or a paintbrush. Becoming a good writer or a good painter requires a lot more than owning the tool of the craft and there are many people who are not professional writers who write beautiful poetry or prose. Surely photography is no different.

In the end the difference between taking and making pictures may simply boil down to commitment, intent and vision. To take a picture requires a camera, while to make a picture requires a commitment to the craft. A photographer sees the world through a lens and tries to make pictures that capture something they see that perhaps others don't. A photographer frames the picture, sees the light, waits for the defining moment to make a picture.