Thought to add a few comments to this interesting, and very important (to some of us) discussion. I too have seen business fall off the cliff. Oddly, it was the "Uncle Fred" type that did in a major line of my work. My polo photography got a double whammy this fall season. First, we got clobbered by Hurricane Ike. That storm destroyed many of the stalls, stands and clubhouse for the polo club. It also did a lot of tree damage and turf damage from flooding and debris tearing up the fields. So, right out of the gate, the season took a hit....fewer matches, fewer players, fewer sponsors, etc. Couple that with an amateur, who is also a club member that decided not to play, picked up her camera and started taking snapshots of the same events I was getting paid to cover. She then proceeded to offer those shots for free, since she did not care about the business end of things, nor my contracts and income evidently. The club members were happy to buy crappy 4x6 snaps for scrapbooks, but then the club decided to start using some of her shots for marketing, as they were looking so save some money over my rates to help them rebuild. They have been very short-sighted in this, as their ads we blurry, no color balance, could not take enlargement (but they did it anyway, artifacts and all), etc. Their "professional club" look quickly descended to very amateur looking, but hey, they were saving some bucks this season.
Then came the rest of the economic story that we are now experiencing. That was added injury to injury, not just insult to injury. It is not stopping me, as I am working toward other lines of business, but the "Uncle Fred", or in this case "Auntie Frieda" or something, put the skids under things at a tough time, and then folks got too scared to spend anything. All of the marketing I had in place through the operation has done nothing to help push my other lines at all. No sales coming from an entire fan and client base now. THAT really is where the hurt is, enough so that I am trying out completely different directions like portraiture and things.....very different from shooting fancy expensive leather, Jags, sterling silver stuff, etc. The corporate spending and marketing has dried up....for now, as I am an optimist. I think that it now becomes important to find those clients that understand that during times of economic downturn, it is MORE important to have good, professional looking marketing efforts and photography for their competitive/successful looking edge. They do not want to pay as much as before, but are still going forward with quality work. The sales are tougher. There are more things cut out than put into sales, but offering excellent service, top quality, and a willingness to work hard with the client helps.
This is not going to get better for some time. As with anything, it really does help to find the differentiator, be that stunning files that can be multi-purposed, or just unique portrait shoots with interesting package options (like clusters of gallery wraps instead of just one big canvas and other tweaks). None of this is competitor proof nor immune to economic shifts, but there is something to be said for trying to stay in business through these really tough times. It may mean waiting a bit more to replace some gear, or holding off on that kind of stuff, but it will work out.
I think Tim's comments about potential impact on the entire industry are important, but it is too early to tell how much that may impact innovation and such. My gut tells me that there are probably a lot of tweaks waiting in the wings, and we may see them get rolled out.....they do have a "shelf life" of sorts, so might as well use them in new offerings to help sales even in a down market. At least that is my thinking.
Marc's comment about the S2 having to wait is the one that personally does hurt and bother me the most right now. I have been holding off on Hassy or other choices for this new offering. Going to be really hard finding the capital to finance that now, BUT, if one keeps at business, and does not fret so much, but finds ways to keep moving and shooting, it will work out. As I said, I am an optimist. I may have to alter my timeline for some things, but I will not change my dreams and drive ;-)
LJ