There is a specific kind of frustration that shows up at a certain size in this business, and most owners feeling it think it is a personal failure.
You are doing more volume than ever. Your team is bigger. Your brand is known in your market. And the money is somehow harder, the clients push back on price more, and the wins cost more to get than they did three years ago. You have not gotten worse at any part of it.
What changed is the position. The middle of this market is being compressed from three directions at once, and it feels personal because everyone experiencing it is experiencing it alone.
The floor came up
Start with the direction most owners underestimate, because it does not arrive as another agency with a sales team. It arrives as a guy with a laptop.
Consistently good listing photos used to require either skill or an editing operation, and both took years to build. Now they require a subscription. The owner who moved daytime editing from 85 cents an image to 43 kept twilights with the human editors "because right now I just think they're flat better." The former owner whose bill went from $12,000 a month to $3,000 let go of an editor of eight years to do it.
Now we don't need the person with experience that can edit the photo. They're basically obsolete because auto HDR is doing it for us already.
Video is going the same way at the low end. Matt Giesow, a coach in the group and a former agency owner, has watched new shops in that market pitch listing video with no videographer on staff: "they're just using photo to video. And that is their video offer."
AI has lowered the barrier to entry to one man bands. And so we find ourselves just kind of trying to constantly reaffirm our value proposition to our clients because there's guys coming — increasing the race to the bottom. I was that guy eight years ago, so it's hard to be too mad about it.
Run the arithmetic honestly. If your average order sits in the $500 to $1,200 range, and what separates you from the next vendor is reliability rather than something a client can name, a solo operator with AI tools and almost no overhead can deliver roughly eighty percent of what you deliver at about forty percent of your cost. Eighty percent is good enough for the price-sensitive middle of your book.
One owner selling a mid-to-high tier package described the agents in that market in August:
There's two types of agents. One, very wealthy don't, don't care. We'll spend whatever on like the top media. And then two is like even top producing agents don't want to spend more than like 200 on a photo video package… So let's say I have like a $900 package. I'll get compared to like, like a 400 package.
That operator does not have your team, your systems or your relationships. Those advantages only matter to clients who have been burned by the alternative, and a client who has not been burned yet does not know what they are paying you for. The hungry operator does not have to beat you. They have to be close enough, cheap enough, and available on Tuesday.
The ceiling came down
At the same time, from above, the buyers are consolidating.
Brad Ziemer at Window Still is acquiring agencies at around 2.83 times earnings, running twelve AI-trained cold callers at four dollars an hour to find owners who might be ready to hear a number. Full Package Media is running a similar playbook with multiple acquisitions a year. Zillow acquired VRX, which told every platform company in this industry that owning the media service beats selling tools to the people who provide it. What those buyers pay, and why the number is what it is, is in The Consolidation Wave Is Already Here.
The agencies at the genuine top of this market are relatively insulated. Real luxury positioning, clients who are not choosing on price: that business is hard to replicate with a subscription and hard to commoditize from above. There are not many agencies in that category, and most operators who believe they are in it are one tier below it.
The middle is the exact profile a consolidator is looking for, and the exact profile a solo operator can take share from. Both pressures are pointed at the same businesses.
And the middle pays rent
The third pressure gets the least attention because it arrives as a monthly invoice rather than a threat.
Every agency in this industry runs on platforms it does not control, and those platforms know exactly how expensive it is to leave. Moving a mid-size operation off a 3D tour system runs to fifty thousand dollars conservatively once you count retraining, client communication, and the jobs that go sideways while everyone adjusts. We have said that number to a vendor's face. When a competing tour platform asked what it would take for our agencies to switch, the honest answer was that even a $50,000 incentive would lose the argument with the team, because the incumbent tour sits on about 40% of our orders and the retraining costs more than the check. Switching costs are the product.
They locked us into a $10,000 a month contract for seven months when we were hurting. And they're like, you have to pay. Otherwise we're shutting all of this down. And because of the contract, we're like, bro, we didn't even sign the contract that auto renewed.
The solo operator is not carrying an enterprise stack, so they are not paying that rent. The consolidator has scale, so they renegotiate it. The mid-size agency pays full retail on every line.
The owners in the group can itemize the rent. One agency counted seven programs that did not talk to each other, bought 26 phone lines at about $10,000 a year to route client texts the booking platform should have handled, and still cannot run revenue per photographer because invoices bundle services instead of tying them to who shot the job.
All these seven programs didn't speak to each other. So it solved 80%. But I really need to be with a company that can solve, you know, 98%.
The ask on that call was small: "I just want to not have a fourth platform change for as long as I'm the owner." Another owner, the same month, had stopped asking at all: "it's been a year or maybe a year and a half… that I stopped just giving feedback to them because it doesn't go anywhere."
Waiting for those platforms to catch up — and if they're even going to catch up — like I'm currently on Spiro, there's no API access and it's not on roadmap. That's not a future that I can continue to work with. If you can't pivot and move quickly, you're going to become a dinosaur faster than those who can.
That is the squeeze in full. Undercut from below, bought from above, paying rent the whole way through.
Working harder in the middle is not a strategy
The instinct when margins compress is to push volume. Take the extra jobs, hold the price, get through the season. That works once. It does not work as a plan, because none of the three pressures respond to effort.
This year the season is arriving on top of it. Our own forecast for the agencies we run is a revenue drop of 30 to 50 percent across November and December. That is a forecast, not a result, and it is the stretch of the calendar a consolidator's cold caller likes best.
There are three real exits from the middle, and they are not mutually exclusive.
Move up. Build a genuine premium position rather than a claimed one, where clients choose you for something specific and defensible. Corey Dostal at Kiln Media launched a Lux photography package in August at a little over double the base session, about $700 to $730 against $325, and added a $500 Lux upgrade to every existing package. Twenty of those upgrades a month is $10,000 on the same shoot count. It is the hardest of the three exits, and most markets only support a few agencies at that tier.
Build what a solo structurally cannot. Coverage across a market on a day's notice, guaranteed turnaround when volume triples in April, and brokerage relationships that need account management rather than a booking link. Don, who hosts the ACRE Process Labs, shot a listing at nine in the morning and had the photos back to the agent at 10:45, and still only promises same day. A solo operator cannot promise that on a Tuesday in April.
Retainers do double duty here. They smooth the seasonality that makes January a liquidity event, and predictable revenue is priced differently than project revenue when the business is valued. One agency in this network grew its branding and marketing division ninety-two percent in a single year building content retainers while real estate itself slowed down. The retainers that hold are tied to a number the client can see on their own books. The math, and the ones that churned, are in Recurring Revenue Changes the Math.
Get scale. Not by growing your own headcount, which is how most owners ended up with more revenue and worse margins. By organizing with other operators so the leverage consolidators and platforms have over you becomes leverage you have too, on vendor contracts, on the cost of talent no single agency can justify, and eventually on the multiple your business commands. One owner at the September Pulse call added up about $3,000 a month in software across websites, client sites, booking, project management and storage. The host of the Process Labs still pays over $800 a year for a tool the team no longer uses, because dozens of old automations run through it. Fifteen agencies on the same contracts are a different conversation with every one of those vendors.
Adopt AI before it adopts your market
For most mid-size agencies, AI appears as a cost line, one more subscription to train the team on. For the operator taking share from you, AI is the business model. It is the entire reason they can quote what they quote. The agencies that push it deepest into their own operations, editing, delivery, scheduling, quality control, client communication, are the ones whose cost structure survives what is coming. The ones treating it as an optional upgrade are choosing to compete on price against people who have already restructured around it.
The line we gave our own team this year was blunt: double your output with AI in the next two to three months or be replaced by it. We budget 160 hours a quarter to put one new AI tool into the workflow. The last human step, the outsourced QC check one agency in the group pays $550 a month for, is on the same clock. Our guess, said out loud at the September Pulse, is that you will not need a QC person in a year.
One caution from the same call. An owner had an AI build a replica of a $200 a month project-management tool in about 24 hours, and later described what that produced: "I actually, like, have a job now." Every tool you build yourself is a tool you now maintain.
The platform that comes next
The rent problem and the AI problem are the same problem seen from two sides. The software your agency runs on was built to sell you seats and make leaving expensive, not to take work off the desk.
The test we apply to any platform is simple, and we said it to an owner on an August call whose booking system cannot report what each photographer brings in:
As long as they can give me an API to plug into, my agents will move stuff around better than their agents could inside their platform. As long as I have an API.
There is a platform being built right now called Remo, and it is the first one we have seen that starts from the other end. It keeps the agency as one structured record, orders, people, services, schedules, delivery and pricing, and puts an AI layer over the top of it, so the person running the desk can type the change instead of making it by hand. The work it is aimed at is the coordination that eats the middle of every day: the reschedule, the reassignment, the editor who has not answered, the agent who wants to know when.
Two things about it matter more than any feature. It is open, so your data leaves with you and your own tools can plug in. Alex Serrao's line above, about a platform with no API access and none on the roadmap, is the exact situation it was designed against. And it is being shaped by people who run agencies, so the workflows are ours rather than a software company's guess at ours.
It is early, and we say that plainly. The platforms you use today have years of polish on booking and payments that a new one does not have yet. The direction is set all the same. The agencies whose cost structure survives the next cycle will be running on something built this way, and the ones paying full retail for seats on a platform that would rather own their service than sell them a tool are funding their own squeeze.
We think this ends with the middle splitting rather than disappearing: some operators move up, some organize into something with scale, and some keep running the same business at slowly worse margins until an offer arrives at a bad moment and the decision gets made for them.
If you want to know which of those you are positioned for, start with the number. You can value your agency in a few minutes, and the shape of the answer, project versus recurring, founder-dependent versus not, tells you more about your exposure than any forecast will. The longer argument for why organizing beats waiting is in the full A27M thesis.
The squeeze says nothing about how well you built this. It describes where it sits. Positions can be changed, and this is the part of the cycle where changing one is still a choice.
