Recently, I posted on the “Stock Photography: buy and sell photos” group on LinkedIn.com some of the information about photography revenue relative to printing revenue that is found in this
story.
Peter Dean came back with a related question that deserves some careful examination. He asked, “Approximately how many more images are used these days in print compared to 10 years ago?” He also wanted to know whether print revenue is Static? going Up or going Down?
In order to discuss current and future trends we need to start by taking a look at some of the available data. I wish there was more hard data, but there isn’t so of necessity my analysis is based on a lot of assumptions.
First we need to look at Getty Images sales. We can go back to 2003 after the U.S. economy began to come out of that recession and examine Getty’s quarterly data until they took the company private at the beginning of 2008. Based on the numbers being reported at that time, I don’t believe there was much growth in the number of images licensed on an annual basis. (See
Getty statistics for 2006 and 2007)
Their revenue grew through acquisition and through a dramatic rise in the average price (from $99 to $254) for their RF images. The rise in revenue was NOT because they were licensing rights to more images. The average price of a RM image stayed flat during this period. During this time they grew revenue, but not the number of images licensed by any significant number. When they acquired new companies the growth in revenue almost never matched what the two companies had been earning separately before the acquisition. For the most part they simply gave their customers a greater choice of images, but that did not lead to the customers purchasing more. Customers still only purchased what they needed for the projects they are working on.
At the end of 2007 Goldman Sachs did an analysis of Getty’s business and provided a five-year estimate of growth for various segments of the business. Revenue for Creative Stills (RM and traditional RF) was expected to decline from $561 million to $348 million by 2012. That is a 38% decline in 5 years. That was before the recession hit. That was before the fantastic rise in the use of microstock. My guess, based on what I am hearing from photographers, is that Getty has already seen that much of a decline, if not more.
If we look at Alamy during the same period, certainly they grew as a start up company in the early part of the decade. But by 2007 and 2008, based on the figures they were providing, their sales had flattened. They were licensing rights to a little less than 200,000 images a year.
The really interesting thing about Alamy is what happened in 2009. The company’s revenue
was down 27% compared to 2008, but, I believe they made approximately the same number of sales as they had in 2008. They just dropped their average price per image licensed by 30% in order to hang onto their market share. I believe the average prices per unit licensed are still about 30% lower than 2007 and 2008, but at least prices have leveled out in 2010. Recently, when the company hit 22 million images in the collection I asked if they were licensing rights to more units than I had estimated in 2009. They said yes, but without providing any reference numbers. I’m skeptical that there is any significant increase in number of units licensed based on reports I get from photographers.
Magazines and Newspapers
In general most RM and traditional RF stock images are used in magazines, newspapers, books, brochures or catalogs. Magazines and newspapers are getting thinner, or going out of business. With fewer pages they need fewer pictures. Pictures are used smaller – more thumbnail shots and fewer full pages and spreads. Publishers are paying less for images than they used to. There is no indication this trend will reverse when the economy gets better. More people are getting the information they need from online sources rather than print.
A small bright spot is regional and specialist publications. However, the content needed by these publications tends to be of a very specific, localized nature. Images shot for such publications are unlikely to be of interest to anyone else. This line of business may be an opportunity for assignment shooters, but they should get paid enough for the first use to offset costs and make a profit. Residuals are unlikely.
Books
Books are a big segment of the print market. I don’t believe there has been any real growth in the number of titles published. The trend for the decade has been to request much larger print runs than before for only slightly more than used to be paid for small print runs. Reuse fees have almost disappeared.
In the education field there is growing use of electronic devices and less use of print. Licenses are still based on a print runs and publishers ask that “unlimited electronic use for 10 (or more) years” just be thrown in. Seldom is there much of an additional fee for electronic usage. Ten years from now the major delivery system for educational materials will be online and from satellites to hand held devices. For all practical purposes print will be dead. In January Amazon.com said that for the first time it sold more ebooks than paperbacks in the US, with 115 ebooks purchased for every 100 paperbacks sold.
Brochures and Direct Mail
The third major type of print use is for direct mail, brochures and print catalogs. Anyone looking in their mail box would think direct mail is still a thriving business, but printers say the number of units they are printing is declining. Postage increases are part of the problem. In addition many small users are now able to print materials they need using home printers. These users go to Flickr, Google, iStockphoto or other microstock seller for the photos they need, not traditional agencies or individual photographers. They certainly aren’t going to pay photographers $100 or more for the images they need for small projects.
In 2010 approximately 1.5 million images were licensed at RM prices and 3 million at traditional RF prices. That 4.5 million images annually has been a pretty stable number over the last decade. Meanwhile, in the range of 100 million images were licensed at microstock prices in 2010. And that doesn’t count all the free images people got from Flickr or Google.
We don’t know how many of the 100 million microstock images are being used for printed products? Certainly, a huge percentage of them are being used online. We do know that a significant number of traditional customers that used to purchase images at traditional prices for printed products now get a large number of the images they need from microstock sources.
In summary I think traditional customers are using fewer RM and traditional RF images than they did in the past. Prices have dropped. I suspect there is big growth in the use of images in short run print products produced by small businesses and individuals, but most of those are microstock images and that isn’t helping the RM and RF sellers .
So the question becomes, are you willing to sell to the small user? Are you willing to price your product, and offer it in such a way, that you pursue volume sales at low prices rather than just a few sales at a significantly higher price? And finally, if you do take the second approach can you actually earn enough to offset your cost of production and realize a profit.
For more about the data on which I base my judgment check out
Going Pro: State of the Print Market.