Getty is contacting its RM photographers with non-exclusive or co-exclusive agreements and asking them to convert all their images in the Getty collection to exclusive so Getty will be the only organization that can license rights to use the images. This may be a particularly difficult decision for photographers with co-exclusive arrangements if they typically license a fair number of uses directly to clients annually. All those future sales will be lost.
It is unclear whether stock agencies who license their RM images through Getty are also receiving the same request. I would think that it would be very difficult for agencies to agree since most will want to continue licensing uses to the same images themselves. I suspect that about half of the RM images in Getty’s Creative collection have been supplied by other agencies.
It appears that later this year Getty intends to somehow segment its RM collection in a way that shows whether an image is immediately available for Exclusive licensing, or whether the image is represented on a co-exclusive, or non-exclusive basis. Currently, if a customer wants to license a co-exclusive, or non-exclusive image for exclusive use, Getty would be forced to do some additional checking and that would be inconvenient for both Getty and the customer.
Photographers are being asked to make a decision by August 10th as to whether they will accept the Getty offer, or not. Some have asked for my opinion as to what they should do.
The decision is not an easy one. It depends on several factors:
1- What percentage of the photographer’s total revenue earned from Getty in the last year or two has come from sales over $1,000? (Getty has indicated that exclusive sales will start at $1,000.)
2- What revenue has the photographer received from direct sales (co-exclusive) or through other agencies (non-exclusive) of the same images over the same period of time? (This level of revenue would be lost if the photographer accepts the Getty exclusive option.)
Getty may make very few sales for fees over $1,000. However, given Getty’s high volume of low priced Premium Access sales the few high priced sales may represent a significant percentage of annual revenue generated.
A few months ago I did an
analysis of 2017 sales of some of Getty’s major producers. Combined about 1% of total Creative sales were for gross license fees of over $1,000, but those few sales represented 32% of total revenue for the year.
Given, who these photographers are and the kind of work they do, I suspect that they had a higher percentage of high priced, high dollar sales than the average Getty photographer. Thus, it seems likely that for most photographers significantly less than 1% of total sales are for fees of over $1,000.
3 – Are exclusive sales of your images likely to be for fees of $5,000, $10,000, $15,000 or more?
Higher value sales are increasingly rare. If you choose to bet on making an occasional very high value sale recognize what you will be giving up on co-exclusive or non-exclusive sales. Look carefully at your history.
The fact that you made a few high dollar sales in the past, probably had nothing to do with the quality of your work, but more with the type of subject matter you shoot. There are certain subjects that tend to more in demand than others for exclusive rights. If you have made few, or no, over $1,000 in the past it is highly unlikely that number will improve regardless of whether you decide to make your entire collection exclusive with Getty, or not.
4 – Will most of the RM sales you make in the future be for very low – RF level – prices?
If that is the case, then maybe you should consider pulling those images out of RM and place them in RF.
Getty has been moving a lot of images from RM to RF. That trend is likely to continue. Currently, about one-third of the images shown in the default search return are RM while 2/3rds are RF. The percentage of RM images is likely to continue to decrease as Getty pushes more RM suppliers to move their images to RF.
On top of that, an increasing percentage of customers only search for RF because they need unlimited rights to use the images they license in a variety of different presentation formats. Seldom are they aware of all the possible uses when they make their first buy. They don’t want to have to come back and re-negotiate for additional uses. Thus, they never even look at RM images if they are required to pay based on how they use the image.
Finally, if Getty is going to push the RM images that they represent exclusively, those images will likely be moved to the top of the search return order. At that point it becomes even less likely that anyone will see a co-exclusive or non-exclusive RM image.
Thus, if with the new system it becomes less likely that customers will ever see your non-exclusive RM image it may be wise to move them to RF to give them a better chance of being seen. They might also get a more current upload date which would give them a better chance of being seen. And since most sales are done through Premium Access deals the price of all images are the same, regardless of whether they are RM or RF .
5 – Will “Spot,” “License,” “Industry” and “Total” exclusivity take more images out of the market for a periods of time?
From the information provided so far, it is very hard to understand how these various types of exclusive licenses will work or how they will affect the possibility of licensing multiple uses to the same image after the license expires. In addition, will any of the “exclusive uses” drop to prices below $1,000?
It is clear that Getty needs to find some way to get more high dollar sales. Over the last few years they have pursued sales volume at all costs. That has produced a significant increase in sales overall, but, at a heavy decline in price.
If we assume gross Creative revenue of $280 million annually then about $7.73 million of their revenue comes from 55% percent of their sales licensed at prices under $10.00 while over $90 million of their revenue comes from the 1% of sales of $1,000 or more.
It is obvious why they would like to increase those over $1,000 sales, It won’t take many more to generate a significant increase in income. Such sales would certainly benefit a few photographers. But, it seems likely that the vast majority of photographers will not benefit from additional high value sales. What is really needed is a strategy to increase the revenue generated by the lower priced sales.