Define The Term “Microstock”

I was asked recently if I could provide a definition for “microstock.” The term is probably meaningless today.

I believe the term was first coined around the turn of the century by people who thought traditional stock photography was too expensive. They created online sites and made stock images available at very low prices, mostly via subscriptions or for around $1.00 per single-image-licensed. The initial leaders in this business were: iStock, Fotolia (now AdobeStock) Shutterstock and Dreamstime. Today, there are a host of other agencies that use similar pricing strategies and refer to what they offer as microstock.

Initially a significant percent of the images distributed were obtained from graphic designers who took pictures as a sideline, and photographers who were more interested in showing off their work and helping others in the creative community than earning any significant revenue from the images they produced. This was at the beginning of the “Everything on the Internet Should Be Free” era.



Because prices were so low these new agencies opened up a new market for stock photography. Thanks to the very low prices, a few image creators were able to make a significant volume of sales, but the vast majority made relatively few sales.

Traditionally, photographers trying to earn a significant portion of their livelihood from the images they produce charged much higher prices and tended to base their prices on the cost of production and the value the customer received from using the image. (The price for an image used in a small brochure with limited distribution was usually much lower than if the same image was used in a major national print ad. In the 1990s, and earlier, this was a very accepted method for pricing image uses.)



This pricing strategy has come to be referred to as “Traditional Stock Photography” in order to distinguish it from microstock. Given the higher prices traditional photographers tend to make fewer sales. Currently, at least 97% of the images licensed worldwide every year are licensed using a microstock strategy.

In the early years microstock images were often of inferior quality compared to those offered through the traditional market, but the overall quality of microstock imagery quickly improved to where the best of what microstock has to offer is of equal quality to images offered in the traditional market. (However, many microstock sites are much more lenient than traditional sites in their acceptance standards. Consequently, there is often a much greater percentage of low quality images on microstock sites than on the best edited traditional sites.)

Most of the people on the “Microstock” side of the business believe that all images – no matter the cost to produce – should be priced equally. Thus the only way to get increased revenue from an image is through sales volume. Those on the “Traditional” side recognize that costs to produce certain images can differ dramatically. They try to account for that fact in their pricing.


 
While initially the microstock philosophy was that all images should be priced the same, several microstock agencies now offer images in various pricing tiers. AdobeStock has a Premium collection, Shutterstock has Offset and iStock has a two tier pricing system. I suspect the number of images licensed at these higher prices are about the same as the number licensed at prices of $100 or more by Traditional agencies, but hard data is not available.

For the most part photographers have chosen to use one marketing strategy or the other. In the last few years an increasing number of “Traditional” photographers have chosen to make some of their images available in the “Microstock” pricing environment.

In some cases, these photographers will make the same image available in both environments, simultaneously. Given that customers tend to search in one environment or the other, but not both, and the volume of choices, seldom would a customer be aware that they might find the same image for a higher or lower price, if they did their searching somewhere else. While this is a way for producers to try to maximize revenue from their production, such a strategy is frowned upon by most distributors. On the other hand, many of the images in the microstock market are available via multiple microstock distributors at different price points.

Particularly since the 2008 recession, the quality of the Microstock offering has improved dramatically and those using the Traditional marketing strategy have been forced to dramatically lower their prices to compete. Based on a recent analysis of sales made by some of the major suppliers to Getty Images, 75% of their images were licensed for prices less than $20 and 50% for prices less than $10. In some cases, Getty licenses Traditional images for much less than today’s Microstock prices. (To understand how much traditional prices have declined it is important to keep in mind that in 2006 the average price of all RM images licensed by Getty Images was $540 and the price for an RF images was $275.)
 
Microstock prices have increased since the early days, but on the whole are still much lower than the average Traditional price. Very occasionally, a very small number of Traditional images are licensed for multi-thousands of dollars boosting the averages.

Accurate statistics are not available, but I believe that worldwide in 2017, more Microstock photographers will earn over $100,000 a year than photographers working in the Traditional market, but the number is infinitely small in both cases.

Thus, while the terms “Microstock,” “Traditional Royalty Free” and “Rights Managed” are still used they are not very meaningful given that there is so much overlap in the ways images are licensed in each of the categories.

And you wanted a simple definition!!