Recently, the “citizen photo agency” Demotix has had reason to celebrate. The site gained fame by selling front-page photos to the New York Times taken by Iranians who captured shots of protests after the disputed presidential election in Iran. Then came another seminal moment when the site got the only shot of Harvard professor Henry Louis Gates Jr. in handcuffs when he was arrested. That photo was featured on CNN, CBS and NBC and in the Washington Post, Boston Globe and other papers, bringing in more than $4,000 for Demotix and the photographer, William B. Carter.

But the money-losing startup, which launched last year, still has a long way to go to prove that a citizen photo agency is a viable business. Three years ago, I wrote about a trio of citizen photo agencies — Scoopt, Spy Media and Cell Journalist. Two of them don’t exist today and the third, Cell Journalist, has turned into a platform for citizen journalism submissions at traditional media websites. The tough truth is that it’s a difficult road for Demotix to build name recognition and compete with CNN, BBC and countless other media sites asking for citizen-shot photos.

The basic idea for a citizen photo agency sounds plausible. Traditional photo agencies work mainly with professional photographers, and media outlets usually get photos from their own photographers or agencies. So when a citizen is at the scene of a bombing, tsunami, break-in (that’s really not a break-in) or other important event, they can send their picture to the citizen agency, who then can help broker deals with all the outlets that want to run that picture.

Demotix, like Scoopt before it, does a 50/50 split of revenues for photos submitted to the site, and lets the shooters keep their copyright to sell it on their own. When Demotix launched, the site considered running citizen articles and video as well, similar to what a site such as NowPublic does. But CEO Turi Munthe told me it was simpler to focus on photos and expand from there.

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Turi Munthe

“Scoopt had a different focus than what we have,” Munthe said. “They were ahead of their time, and ahead of the curve and (I think) more about paparazzi shots, which I think is a competitive market. We have a more global focus on events happening around the world, and are looking for raw, original content from the streets… Our real competition, I think, comes from possible copycats. I think both CNN and NowPublic are in different spaces from us.”

Munthe said the recent successes of Demotix have been a combination of “luck and hard work,” with an editorial team that is reaching out to photographers on various continents and checking all the photos that are submitted from the 7,000 site members. Of those members, Munthe believes that 15% to 20% are regular contributors who have received some kind of payment from Demotix. The site took a “friends and family” round of funding in 2008, and Munthe is looking for a second round of funding that might come from venture capital or strategic investors.

The Scoopt Cautionary Tale

While Munthe is predictably optimistic about Demotix’s chance for success, Scoopt’s co-founder Kyle MacRae is unabashedly pessimistic. Having lived through the roller-coaster of Scoopt’s brief life — going from hot startup to being acquired by Getty Images and then shut down — MacRae is not bullish on the concept of the citizen photo agency.

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Kyle MacRae

“I’d say their chances of acquiring significant volumes of content with commercial value — where value is largely driven by timeliness — are slim to zero,” MacRae told me via email. “It’s hard to get sufficient awareness to stand even the remotest chance that the next punter to witness a newsworthy incident will have heard of Demotix, and know how to submit a photo or video quickly…Demotix (or Scoopt in its day, or any similar site) will always score well when they get a big hit — but otherwise?”

Graham Holliday, who worked as an editor at Scoopt and now does new media training and consulting, told me that the problem for Demotix is marketing itself so well that they become the go-to site for breaking news photos.

“There are no universally accepted destinations for newsworthy citizen media,” he told me. “People upload stuff wherever. How many people had heard of C-Box before, or even during, the Saffron Revolution in Burma in 2007? Yet that’s where a lot of the conversation was happening. Demotix is just one place to listen. The conversation may occasionally happen there, but it’s more likely to happen elsewhere.”

Holliday pointed out that it was MacRae who actually first registered the @demotix name on Twitter, and that Demotix was still sorely lacking a presence on various social media sites such as ImageShack and Blip.tv. (You can plug in “demotix” at Namechk.com to see where they haven’t signed up for their own name.) “That has to make you wonder how seriously plugged in they are,” Holliday added.

One other challenge for Demotix is the danger for photographers who are shooting newsworthy events. Munthe told me the site tries to warn contributors that they are responsible for their own safety in dangerous situations, and said a number of Demotix photographers were arrested and beaten in Iran — and were arrested even in the UK for photographing police.

“Thank goodness our Iranian contributors were all released, but it’s a tough situation,” Munthe said. “We ensured the anonymity of contributors in Iran and use anonymizing proxy tools like Tor. We post warnings, scrub all the identifying metadata from their photos, use multiple emails, and have deep and growing relationships with Index on Censorship, the Committee to Protect Journalists, Human Rights Watch and others that can help when the going gets tough. In the case of Iran, it was actually an advantage for our contributors not to be tied to a major news outfit like the New York Times. We helped them stay under the radar.”

Twitpic, Flickr, Cell Carrier Deals

Despite all the hurdles Demotix has ahead of it, some folks believe in the idea of citizen photographers being paid fairly for their work. Beverly Spicer, an editor at The Digital Journalist and former freelance photojournalist, realizes that pro photo agencies will struggle to compete with the plethora of images on photo-sharing sites snapped by amateurs at the scene of news. She thinks Scoopt was onto something good before Getty bought them and shut them down to stifle a low-cost competitor (in her opinion).

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Beverly Spicer (photo by Eli Reed)

“My feeling is that this sort of thing will eventually be the way of the world, because agencies are less and less able to dispatch professionals in a timely fashion to the scene of an event which has already been captured 100-fold by citizen journalists by the time the pros arrive,” Spicer said. “And yes, it’s true…anyone running a photo agency is struggling mightily in the digital age, an age that seems to be driving the economic standard established by printed media into the ground.”

If Demotix can’t drive enough name recognition on its own, it makes sense to partner with photo services such as Twitpic and Flickr, where the photos are already being uploaded, or with cell phone carriers that could embed the upload function into phones. Janis Krums, an entrepreneur who snapped the famous first photo at the scene of the US Air water landing in the Hudson River, said that he would have used Demotix if he knew it existed at the time. Instead he used Twitpic because it was integrated into Twitter.

“For [Demotix] specifically to be successful, they need to be integrated with all the photo sharing services,” Krums said. “Ideally a site like Demotix should partner with a site like Twitpic and use their strengths to push through. Or a site like Twitpic needs to add services that in the event that there is a wide demand for a photo, it has the resources for distribution.”

Built-In Distribution, Auction Ideas

MacRae agrees. In a piece he wrote for Journalism.co.uk last February, he noted:

When Krums uploaded his picture, what if he had had the option to control licensing there and then? I’m talking about a simple one-click option to, for instance, permit free usage and distribution of his image for non-commercial ends but reserve the right to charge for commercial usage. A Creative Commons licence with commercial partners tie-in would do the trick (as indeed Scoopt prototyped with CC)…

There’s probably still a role for a Scoopt-like agency to protect the rights of photographers, negotiate payments and handle sticky issues of verification, but this action can now happen retrospectively. The real trick is being able to find, suck in and license that (very occasional) #breaking image or video — without building a dedicated cit-j agency around it.

Munthe told me that Getty still has a deal with Flickr, but that further down the line Demotix will be looking to partner with telecom providers all over the developing world where people have more cell phones than computers with Net access.

Citizen journalism pioneer Dan Gillmor says he likes the idea behind Demotix, but thinks a better system would be a real-time auction for breaking news stories and photos, where news outlets compete for the content. Here’s what he wrote recently on the topic for Idea Lab, explaining how such an auction system would operate:

Photographer captures breaking news event on video or audio, and posts the work to the auction site. Potential buyers, especially media companies, get to see watermarked thumbnails and then start bidding. A time limit is enforced in each case. The winning bid goes to the journalist, minus a cut to the auction service.

The premium, then, would be on timeliness and authenticity. One or two images/videos would be likely to command relatively high prices, and everything else would be worth considerably less.

Whether it’s an auction or tagging system or deal with cell carriers, Demotix will have to move beyond being a destination site for citizen photos and put itself where amateurs will be taking the shots and uploading them.

What do you think about Demotix and the idea of citizen photo agencies? Have you used them before and were they worthwhile? How do you see the market shifting for the use of breaking news photos? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.