Last summer Getty Images launched an API initiative called Connect by Getty Images that made it possible for then to collect a share of the advertising revenue when an ad appears on a page where a Getty Image is shown.
One of the first companies to use the API was Yahoo. In the February statements Getty is reporting royalties from some of the early pay-per-view deals. The numbers being reported have alarmed a number of Getty’s contributors.
How Does It Work?
To get a sense of how the API works go to
http://images.yahoo.com and do a search for Natalie Portman. Some of the first images that come up will have an (HQ) in the top left hand corner. This stands for “high quality” according to Getty. All these images are supplied by Getty. Hovering over an image with the cursor reveals the name of the photographer and the collections it came from. Getty says this process also reveals their watermark, but I can’t see it.
Click on the image and the watermark does appear on the larger preview along with the caption. In this view random advertisement placement may appear in the margin of the page. If an ad appears Getty gets a share of what the advertiser pays and they share a portion of that with the contributor.
The ads are not part of the image or vice versa. The ad does not have to be clicked for a revenue share. Anytime an image is viewed on a page with an ad the fee is triggered. Getty says that initially no ads have been included as they try to determine a live transaction experience to sell against.
The company’s goal is to start serving customer ads in two possible formats the next month or two. The formats are: (1) interspersed in slide shows and (2) below the slide show images.
Good news and bad news. The good news is that images from the Getty collection always seem to be pushed to the top of the search return. That means your images will be seen more often. Also, when the user chooses one of the Getty images and starts searching through the slideshow all the images shown are from the Getty site, not images from other suppliers that the Yahoo search might have uncovered.
The bad news is that users can still right-click these images and get a 200 megapixel file that would certainly be satisfactory for use on the web. In addition, there is no indication that customers must license these images if they want to make any other type of use of them. And, if a customer wants to license an image it is very difficult to figure out how to go about it. (The customer might go back to the cursor reveal, look at the name of the agency credited and search for that agency, but it is not simple.) Getty says, that a “License Image” button is under development and will appear next to the credit and collection name.
Revenue
The real kicker is the revenue generated. There have been cases so far where the average royalty per image viewed was about $0.0007. And you thought selling images for $1.00 was bad! At this rate you would have to have over 1,400 views to earn $1.00.
One photographer had 4 transactions in February. On two of these transactions there was no license fee so no royalty. Why is there a transaction without a license fee? On one there was a $0.04 license fee and no royalty. In one sense not a big deal to get upset about, but why no royalty if Getty is collecting a fee no matter how small? The fourth transaction had a license fee of $0.33 and a royalty of $0.03. The royalty here is a lot less than the photographer’s normal royalty so there is a big question of how royalties are calculated. The photographer’s statement says the percentage “varies.”
At least one “image partner” had well over 100,000 transactions and received about $100.00 in total royalties. Figuring out how to apportion that money to the individual contributors will certainly cost the image partner much more than the royalty received.
There are some other questions. If they are not serving ads yet, and the only time a fee is earned is when the picture appears on the same page as the ad, where are these payments coming from? How is the creator’s portion of revenue determined since it doesn’t seem to be based on the contract terms?
There is certainly a potential as they ramp up this line of business that there will be a much greater revenue stream, but it will have to grow astronomically before there is any significant revenue for creators.
Selling Direct To Consumers
One thing seems certain. In the future a significant number of the transactions that generate compensation will based on actions by individual consumers. I would call your attention to
Encyclopaedia Britannica’s Picture Access and
Stipple.
There is probably nothing that can be done to reverse this trend. But, it is worth recognizing that this is coming. Those paying for ads will more efforts to track individual use, and if photographs draw the consumer to the ad then the creator should be compensated. But if what has been happening on the Internet so far is any indication advertisers will be unwilling to pay more than a fraction of what they used to pay to reach people when the only way to reach them was through print.
A couple years ago the New York Times reported that its online ad revenue was one-tenth of what they were receiving for ads in the print edition despite the fact that they had more online viewers than print readers by a significant percentage.
Based on a
Pew Research study in 2012 on the State of News Media in the traditional print model advertising covered 80% of the costs and subscriptions the other 20%. In the current Internet model advertising is covering about 3% of costs.
The rates we are used to for the use of our photos are gone. Occasionally, there will be an image of a celebrity that millions of people will want to look at. At the rates outline above a million views might be worth $700. But, such paydays will be few and far between.
Another factor to consider is the splits. The advertiser are not paying Yahoo, Google, Bing, etc. anything near what they paid print publisher for the same type of viewership under the old model. What percentage of that fee does the search engine keep before giving a small share to Getty? How much does Getty keep before giving a small share to the Image Partner agency and what percentage of that will reach the creator?
Some photographers will not want to allow the licensing of their images in this manner. But, if a significant percentage of a photographer’s revenue is based on licensing images for advertising use, and more and more advertising dollars are spent on online activities where consumer response can be measured while less and less is spent on the old print model; image creators may have little choice.
What about those creators that earn revenue for editorial use? As print advertising declines there will be less demand for images that are used in print and publishers will be unwilling to pay as much as they have in the past for the images they use. Currently, what they pay for most online uses is a fraction of what they paid for print.
There may be no good solutions, but the options offer something to think about.