(Photo: Steve Bartel)

Crowds are known for many things: wisdom, madness, overhauling the market for stock photography. WIRED editor and author Jeff Howe touched on these traits and many more in his presentation yesterday at the Mediabistro Circus. His topic? Crowdsourcing, a term he coined and the title of his 2008 book about "why the power of the crowd is driving the future of business." Howe showed the below video—worth it for the whimsical visuals alone—to explain the concept to the assembled crowd:

He went on to demonstrate the power of crowdsourcing with examples that spanned multiple industries. Howe pointed to commercial photography, a market that has been transformed in recent years by microstock agencies, as "the canary in the coal mine." Born in 2000 from founder Bruce Livingstone's annoyance at having to pay hundreds of dollars to license a single image, iStockphoto pioneered microstock (and in 2006 was acquired by Getty Images for $50 million). When Livingstone began charging a quarter per image download, he "opened up an ecosystem," said Howe, who then presented the audience with two photos of fiery sunsets. "Which one do you think cost $300 and which cost a dollar?" A quick poll of the audience revealed an evenly divided crowd. So which photo was which? "You know, I totally forget," said Howe with a shrug.

Another crowdsourced company highlighted by Howe was Threadless, founded by Jake Nickell and Jacob DeHart ("the Jakes") in 2000 as a community that's one perpetual design competition. "Threadless started as a gift of the Jakes and became a business," said Howe, noting that the company had 2007 revenue of approximately $30 million. "Threadless has never spent money on marketing and advertising. The crowd gives them a fine-tuned idea of demand," by scoring submitted t-shirt designs (Frosty the Fro-Man, anyone?) and electing to click the "I'd buy it!" button.

A media world crowdsourcer to watch: Spot.Us, which aims to raise micropayments to fund investigative journalism. A nonprofit project founded by David Cohn with the support of a Knight Foundation grant, Spot.Us is pioneering "community funded reporting" by enabling the web-surfing public to commission journalists (including photojournalists) to conduct investigations on important and perhaps overlooked stories. Currently a "hyperlocal project" for the San Francisco community, Spot.Us is expanding to other cities, beginning with Los Angeles. "The platform can be adapted to any community," said Howe. "What happens when larger players do this? What happens when NPR does this?" Having already funded 24 stories, the project is working to "create sustainability for investigative pieces" along the lines of advocacy journalism. "What it's not trying to do is '10 Questions for Perez Hilton.'" Not to worry: Time has already taken care of that.

Previously on UnBeige: