It’s been circling through the design community online—iStockphoto will soon be offering “stock logos” for sale on their site. Much digital ink has been spilled in outrage, disgust, indifference and excitement. But what does this really mean for the design industry and the creative marketplace of the future?

Why this will be bad for iStockphoto
The move hurts their brand. iStockphoto has been good at what it does—providing inexpensive stock photography for designers and marketers with small budgets. Its high-quality photos and vector illustrations are miles beyond its competition. But much like BMW’s entry into the SUV market, iStock is venturing into untested waters where maintaining the same quality level will be much more difficult (and expensive).

Is iStock biting the hand that feeds it? Their primary buyers are graphic designers, art directors and marketing people looking for affordable photos and illustrations. Up to this point, these creative types saw themselves as customers and partners with iStock, and their offerings were a useful creative resource. But that strategic friendship will probably be strained as the company seems to be competing with its customers. I can foresee many designers boycotting iStock in an effort to fight the perception that the company wants to take away their business.

The devil might be in the details of this announcement. iStock has probably considered this, but the whole effort could be a legal nightmare. How do they ensure that submitted logos are original? How do they deal with cost-effective revisions after the purchase, and who will manage the relationship afterwards that could reflect on iStock? How are trademarks handled? These are muddy areas, and the company seems to have put much of the legal burden on prospective clients, something few of purchasers will want to contend with. To be fair, iStock says:

“Files purchased and used in accordance with the iStock license, will not breach any trademark, copyright or other intellectual property rights or rights of privacy. We’re calling it the iStock Legal Guarantee and if a customer does get a claim, iStock will cover the customer’s legal costs and direct damages to a combined total of $10,000. Here’s the best part: it’s on us. Starting Wednesday, every iStockphoto file automatically comes with a free Legal Guarantee.”

This is a huge, new responsibility for those within iStock who will screen and approve logo submissions. Despite the $10,000 guarantee (actually not much when multi-million dollar companies are involved), I can almost hear the trademark lawyers salivating at the prospect.

Why this is good for identity designers like us
On the face of it, this might seem like bad news for professional designers and firms. After all, no one in the marketplace wins when a Wal-Mart entity comes in and lowers “prices” to commodity levels. But despite all the hand wringing, this is a great opportunity for great designers.

Much like the difference between stock photos and commissioned photography, excellent identity design is more than just creating an image. It’s a relationship between designer and client: Good listening, back-and-forth interaction, astute competitive analysis, alignment with business goals, research, craft, responsiveness–these are all elements that can only happen within a relationship of mutual trust between consultant and client. Those sorts of things don’t come attached to a downloadable logo file.

This is a chance for true identity designers and firms to differentiate themselves. iStock logo customers will quickly see the difference between their fast-food logo, selected from a menu of options, and what they’d get when hiring a firm to truly meet their design needs. A “one-size-fits-all” solution will never be as powerful, effective or meaningful as one created specifically for a client’s brand. Customers of iStock might think they know their need (and will “know it when they see it”) but this is no replacement for the expertise of the consultant.

A logo does not = a brand. Purchasing a logo through iStock might be akin to buying a home theater sound system with no instructions, cables, or hookups. Sure, it would look nice sitting on the entertainment center, but you won’t hear much. A company can purchase a logo, but it won’t come with a marketing plan, style guide, accompanying graphics, or the technical expertise to prepare it for various applications (printing, video use or web). When customers come back to us after being disappointed with the results of their purchase, we can explain what we do provide: a product that isn’t easy to outsource. A system of graphic and emotional touchpoints that weave the story of an effective brand. With a foundation of research, insight, and expertise, our work will clearly prove its value.

In the end, this effort might actually save design firms time and money. A service like this could serve to filter prospective clients. The decision to “hire” iStockphoto could serve as a natural division between prospects who value design (enough to budget for professional design expertise) and those who want to get it on the cheap. As I’ve pointed out above, there is a difference. In the end, this will be reflected in your brand, your market share and products. While we are always excited about educating clients and showing the value in what we do, sometimes the person who wants a $300 logo won’t be moved.

And what are your thoughts, as a client, designer or prospective logo buyer? We’d love to hear them and discuss.