Many
Shutterstock investors see the steadily rising number of images in the Shutterstock collection and the number of new content creators being added each quarter and come to the conclusion that there is no problem on the supply side of the stock photo business.
But, having more and more product is not enough. It needs to be the right product that fulfills the customer’s needs. And the right images need to be easy for each unique customer to find.
The following statistics indicate an area of concern. (The Downloads and Image in Collection numbers are in millions.)
| |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
| |
2014 |
2014 |
2014 |
2015 |
2015 |
2015 |
2015 |
2016 |
2016 |
2016 |
| Downloads |
31.5 |
31.2 |
33.5 |
33.4 |
35.9 |
38.1 |
39.8 |
41.2 |
43.4 |
41.2 |
| Images in Collection |
38.8 |
42.7 |
46.8 |
51.6 |
57.2 |
63.7 |
71.4 |
81 |
92.1 |
102.7 |
| % Images Licensed |
84% |
81% |
72% |
65% |
63% |
60% |
56% |
51% |
47% |
40% |
Yes, the number of images in the collection and the number of downloads continue to grow, but the ratio of the number of images actually used per quarter relative to the number of images in the collection is declining fast. Now, it is half of what it was two years ago.
If we think about images used the actual discrepancy between growth and percentage used may be even worse. 90% of downloads are via subscriptions and a huge percentage of those images are used for reference rather than in a finished product. (Since there is no additional cost for extra downloads there is a tendency to download lots of images that may or may not be eventually used. Nobody knows how many of these downloads are used.)
Increase Volume By Lowering Price
Should they lower prices to increase downloads? For several years Getty has tried to increase its customer base by significantly lowering its prices. Based on my recent analysis of Getty pricing and estimated revenue generated, I believe Getty licensed about the same number of images in 2015 as it licensed in 2006. In 2006 they generated
$634 million in RM and RF revenue. in 2015 it is estimated that their RM and RF revenue was less than half the 2006 number, and still declining – and they had about 7 times as many images in their collection as was the case in 2006. As a result, image creators really took a bath.
A growing volume of product doesn’t necessarily generate more sales, or more revenue. Among the other factors that need to be considered are:
1 – Has demand for images customers are willing to pay for reached saturation?
2 – Will lowering the price increase demand? (It hasn’t worked for Getty)
3 – Can supply outpace demand?
Will Today’s Photographers Produce What Customers Want?
Are today’s photographers producing the right product? There is an abundance of great and beautiful images out there, but are they the images customers actually want to buy?
More and more of the product being delivered to agencies is produced by amateurs. They photograph things they enjoy. They have some other means of support. If they make a little extra from their hobby, fine. But if the cost in time to participate in this market gets too high, or the positive feedback in the form of downloads of their images gets too low, will they move onto something else.
Some of what customers need requires more time, skill and organization to produce than most amateurs are willing to expend. These subjects are not necessarily of situations that amateurs stumble upon in their normal daily routines. These factors are often referred to as “production values.” They include hiring good, experienced professional models, finding props, building sets, studying the subjects to determine exactly where and when is the best place to shoot, and, when necessary, waiting for the right moment to shoot.
Professionals will put forth the effort to learn what is necessary and make necessary expenditures so long as they are adequately compensated. One photographer defines “adequate compensation” as earning enough money, based on an average 40-hour work week, to live a comfortable middle class life, have children, pay all the bills, including all necessary insurance, and put enough money away to live the same standard of life in retirement after age 65.
Stock photographers used to be able to do that. That possibility is rapidly disappearing, if it hasn’t already disappeared. Many professional photographers have seen their stock income decline by 90% or more in the last decade. (See
story) They have turned to other ways to earn a their living.
Some of the luckier ones who’ve only seen 30% or 40% declines may still be producing and trying to find a way to cut costs enough to justify continued production. Most are still seeing steady revenue declines. Few who have been in the industry for any length of time are seeing growth.
Nobody knows the percentage of today’s stock photographers who are actually earning most, or a substantial portion, of their living from the stock images they produce.
Nobody knows the percentage of total unit sales and revenue the work of these photographers represents.
If these photographers stop producing what effect will it have on the gross revenue of the agencies? Will amateurs pick up the slack? Will the amateurs be willing to spend more on production than they earn in royalties just to keep the agencies functioning and solvent? Will the customers be satisfied with whatever is available even if it doesn’t fulfill all of their needs?
A few things to think about.