It’s hard to believe that it was a little more than a year ago that People magazine made headlines by forking over $14 million—in partnership with the fabloid Hello!—for the first, exclusive photos of Brad Pitt and Angelina’s newborn twins, Vivienne and Knox. The sale was more than three times what People paid for the couple’s firstborn, Shiloh.

Click Here to See What 10 Classic Paparazzi Photos Sold for Then, and What They Cost Now.

Back then, in June of 2008, it was still boom times for the paparazzi business, which grew in exponential leaps and bounds in the new millennium, as celebrities, one by one, imploded, and a growing number of media platforms emerged to chronicle each train wreck.

More recently, however, the celebrity media bubble has burst—destroyed by the recession, among other factors—leaving hordes of paparazzi, the agencies that employ them, and the magazines and Web sites that showcase their wares, facing a new, very bleak reality.

The Daily Beast recently quantified just how far the paparazzi market has fallen. Taking a basket of photos sold by the paparazzi agency x17 Inc. during the golden years, 2005 to 2007, we created an index that compared the prices those snapshots fetched then with estimates of what they would garner now. All told, a typical celebrity shot sells for 31 percent less than it did in 2007. The dropoff has been more dramatic at the high end of the market. Six-figure photographs are down more than 50 percent.

“Every day I’d get to work, it was like going to the trading floor,” said one magazine editor, who wished to speak anonymously. “The phones would be ringing, you’d be doing these crazy deals.”

“We had to look through tax papers today,” said Brandy Navarre, herself a symbol of flush times, and co-owner with her husband, Francois Navarre, of x17. (The couple was featured prominently in an Atlantic Monthly cover story in March 2008.) “We were looking at forms from 2007 and my husband was almost crying. You can’t believe the checks that were coming in, in ‘07 versus now what we’re getting. It’s a different world.”

It’s a world in which Nicole Richie is the mother of two; Britney Spears is, astonishingly, under control; and Lindsay Lohan (whose troubles continue) has become so ubiquitous that she’s devalued her market value.

“Lindsay photos are not rare to get,” Navarre said. “She doesn’t really hide. So unless she does something really surprising or sensational—snorting coke, kissing Samantha—her images are between $500 and $1000.”

It’s also a world in which magazines are spending far more cautiously, as opposed to tossing money at every picture of an Olsen twin leaving her apartment.

“We make smart investments,” said Mark Pasetsky, managing editor of the American version of OK! magazine, which, earlier this year, was reportedly losing half a million dollars a week.

“I don’t believe in running a business where you just throw money to throw money out there.”

OK! still does, occasionally, throw. The fabloid recently paid $300,000 for the rights to Khloe Kardashian’s wedding, which it splashed on its cover.

But such outlays are rare these days, which are more about shots of Jon Gosselin hanging out with a new girlfriend on a boat in St. Tropez. (No gurney. No drugs. Not even any skin.) The sale of the photo nabbed “a good five figures” for x17, seeing as it was an “all-arounder”; i.e., a photo sold to a plethora of outlets (another trademark of the new reality, in which prices have so depreciated that selling to one buyer no longer pays the bills).

Needless to say, the sale was nowhere near the kinds of prices x17 and other agencies, such as Splash News and Bauer-Griffin, were seeing back in 2007 and 2008. Lindsay passed out drunk: $150,000, for exclusive, worldwide rights. Britney shaving her head: $300,000.

Navarre calls this new world, “the Post Britney Era,” seeing as it was Britney’s much-publicized downfall that coincided with, and fuelled, the paparazzi industry. In 2007, paparazzi agencies estimated that 20 percent of their coverage was devoted to the fast-falling pop star. X17 had 15 photographers devoted exclusively to Spears.

By itself, Spears’ slide into mayhem—the crazy driving; the hospitalizations; the custody battle—was certainly impressive, even by Stars Gone Wild standards. But it became something even more historic when it was thrown into a bubbling media cauldron that—at precisely the time Brit totally lost it on February 16, 2007, raising a razor to her iconic, golden locks—became a perfect, and very ugly, storm.

By then, of course, Us Weekly was going toe-to-toe not just with People in bidding wars for celebrity photos, but with In Touch Weekly, OK!, Star (which went glossy under Editor in Chief Bonnie Fuller), and Life & Style.

Gossip Web sites like TMZ.com and PerezHilton.com, had also joined the fray, along with magazine’s own sites, which posted photos immediately instead of having to wait until an issue hit newsstands.

Us Weekly, which declined to comment for this story, was spending $30,000 to $40,000 a week just on its front-of-the-book section, Stars: They’re Just Like Us. Its total photo budget was a whopping $8 million a year (now it’s less than $5 million).

“Every day I’d get to work, it was like going to the trading floor,” said one magazine source, who wished to speak anonymously. “The phones would be ringing, you’d be doing these crazy deals.”

Feeding the frenzy were the celebrities themselves, who, it seemed, collectively decided to all go bonkers all at the same time.

But the ubiquity of the media platforms, and the Wild West nature of the environment, was simultaneously undermining the swell. Bloggers, such as Perez Hilton, were stealing photos from agencies, leading to lawsuits (x17 sued Hilton; the case has been settled out of court). And Web sites, as rule, pay far less for photos than print publications—between $40 and $150 for an individual photo as opposed to magazines’ range of between $500 and $1,500. TMZ, for which no image is too sordid or seamy—Octomom’s bloated stomach; Rihanna’s battered face—is known for being especially thrifty.

The paparazzi ranks, too, simply grew too big, to the point that every meltdown was being photographed by seemingly every outlet—even Getty Images began dispatching paps. The age of the exclusive was over.

Throw in the recession, and you have the complete portrait of doom.

Not all is dead, however—some stars, such as Paris and Brangelina, still merit the big bucks.

But what is missing is the Great Story. Not even Jon Gosselin’s bizarre hijinks come close to Britney at her worst, or the Brad-Jen breakup in terms of fixating a nation. Not that the media isn’t trying. People is banking on Nicole Eggert, the former Baywatch star who is starring in the upcoming reality-TV show, Celebrity Fit Club, to spike newsstand sales with her tale of Babe to Balloon (more like, slightly chubby) to Babe. And Navarre is keeping a close watch on Twilight stars Robert Pattinson and Kristen Stewart, whom x17 just caught holding hands in Paris.

The real money, though, would be in the smooch.

“That’s the dream shot,” Navarre said. “Rob and Kristen kissing in public. If you get a nice, clean shot. That’d be a huge scoop.”

Already, she’s thinking dollar signs. “$150,000,” she says, and you can tell she’s smiling.

Plus: Check out more of the latest entertainment, fashion, and culture coverage on Sexy Beast—photos, videos, features, and Tweets.

Nicole LaPorte is the senior West Coast correspondent for The Daily Beast. A former film reporter for Variety, she has also written for The New Yorker, the Los Angeles Times Magazine, The New York Times, The New York Observer, and W.