Friday, September 22, 2023

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GenAI Will Permanently Change the Landscape of Stock Imagery

“Man and woman stand at a crossroad.” So reads the description for a photo on Getty Images, a go-to provider for stock imagery. With Shutterstock, they own or license hundreds of millions of photos and illustrations, sourced from millions of contributors, to agencies and their clients for use in ads, presentations and other materials. If you’ve browsed a website or read a magazine, you’ve seen licensed stock.

Or at least that’s been the case. Like many industries today, the stock photo world is undergoing ground-shifting changes from generative AI—particularly text-to-image generators like Midjourney, DALL-E 2 and Stable Diffusion. The technology has brought new entrants into the competitive landscape, forcing the traditional industry to reorient itself to protect its business.

Yet for advertisers and agencies, these changes present an opportunity to assert their own interests—with both traditional stock photo licensors and the emerging GenAI companies.

Substitute goods

GenAI imagery threatens some artists and photographers more than others. For well-known visual artists, these tools likely won’t hurt the market for their work. If you want Andrew Wyeth’s 1948 painting “Christina’s World,” for example, you want the real thing.

But for businesses trading in more generic images like Getty and Shutterstock, GenAI tools present a competitive threat. These tools can convincingly generate the type of stock imagery common in many ads, like “Man and Woman Stand at a Crossroad.” In economic terms, AI-generated images are a closer substitute good to human-created stock: Marketers can use either product for similar ends.

GenAI tools’ price and flexibility make them particularly threatening to traditional stock licensors. These companies often sell licenses a la carte—a high-res version of “Crossroad” goes for $499. But GenAI tools let users obtain near-unlimited photos for a modest monthly fee—for Midjourney, between $10 and $120 a month. And while stock services offer a collection of ready-made photos, GenAI allows users to tailor images to suit their exact needs.

Of course, the resulting images aren’t perfect substitutes for photos created by humans. Much AI-generated art looks like, well, AI-generated art. At its worst, it’s grotesque—hands with too many fingers, faces out of horror movies. But even at its best, AI art has shortcomings, especially for advertisers and agencies eager to incorporate AI into their campaigns.

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