Making Wise Business Decisions

How to Maximize Revenue: RM or RF?

Return-per-Image (RPI) may offer a false sense of return-on-investment. Photographers would be better advised to calculate return-per-shoot. Before microstock, stock distributors were clamoring for more RF, but demand has changed. At the recent CEPIC Congress, distributors were looking for RM collections. Photographers need to carefully determine which model is more advantageous for them. Two major arguments favor RM over RF.

(1) Customers occasionally pay large amounts for broad, unlimited, exclusive use of an image. A photographer who recently switched from shooting RF to RM recently licensed rights to an image for $80,000 and use fees much higher than RF.



(2) Distributors currently favor RM because they can negotiate lower fees.

The director of a production company that markets both RM and RF told me he believes RM is the preferred choice. His average annual return-per-image (RPI) for RM is three times RF. However, there may be flaws in this argument.



At 3:1, the argument for RM would seem to be conclusive, but it’s dangerous to build a career around a strategy dependent on a certain number of sporadic big sales. If may be better to drop the big sales from your calculations. Then examine the averages on those sales at a more dependable level.

To calculate RPI, simply divide total images in a collection into the gross revenue received. But a more important number is revenue received relative to the cost and time it took to produce the images. Higher billings don’t mean much if it costs a lot more to achieve revenue. The important thing is not gross sales, but net margins.

Assume the average annual returns per image are $600 for RM and $200 for RF. (3:1 but not real numbers from this particular source). Despite occasional high ticket RM sales, the volume of low sales severely reduces RPI. The photographer’s agency pays him 35% of the $600 or $210 for RM sales and 20% of the $200 or $40 for RF sales.



Getty licenses rights to twice as many RF images annually as RM. This is probably close to an industry standard. Taking this sales volume into account, the comparative numbers would be $80 vs. $210, still giving RM a big advantage.

Note that RF is a nonexclusive product. Until recently, it was easier to place the same RF images with multiple distributors than with RM. If a particular RM image was exclusive with Getty, it could not be marketed elsewhere. That probably knocked out well over 50% of the image’s sales potential. Thus, an RF image represented by multiple distributors might sell as often as four times as frequently as an RM image exclusive to Getty, raising RF revenue to $160 compared to $210 for RM; still an advantage for RM particularly if the photographer gets more than 35%.

Yet another factor: the RM selection process is usually much tighter than RF. Photographers who use both methods of marketing get two to four times more images selected from an RF shoot. If 60 RF images were marketed from a single shoot, the average annual return for the shoot would be 60 times $160 or $9,600. The same production might produce only 30 RM images or less. At $210 per-image, 30 images generates $6,300 annual return.

Of course, from these numbers all overhead and production costs would have to be deducted. Some say production costs for RM shoots can be significantly lower RF. Segmenting all these costs and tracking sales by shoot rather than by image may be difficult, but the results in measuring actual profits on various productions would be more revealing.

It should also be recognized that exclusive future use to RF images can be licensed in the same way as RM. When RF images were on discs and purchasers had unlimited rights to use any image on the disc, it was impossible to track use of a particular image. Now, most RF images are sold individually, not on discs. This makes it possible to determine actual use of each specific image. It’s also possible to remove an image from a collection so it’s no longer available for sale or future use.

Most customers interested in an exclusive care little about who used the image in the past, unless it was a direct competitor. Their primarily issue is insuring that the image won’t be used by others in the future. Moodboard recently licensed rights to an RF image for $16,000. These are a few things to think about when deciding whether to license images as RF or RM.

Steve Pigeon, President, Masterfile Corporation commented: “You said “Now, most RF images are sold individually, not on discs. This makes it possible to determine actual use of each specific image. It’s also possible to remove an image from a collection so it’s no longer available for sale or future use.”

You are right that it’s possible to remove an RF image from a collection but you are dead wrong about being able to determine how that RF image was used previously. RF licenses are too broad to enable anyone to say with any certainty how the licensees may have used the image previously. The only way to do that would be to contact each of the licensees and ask them exactly what they did with the RF image after they downloaded it. Good luck finding that out.


After a recent article (above) suggested that return per shoot—rather than return per image—should be used to determine which licensing structure produces the best return on investment, New York photographer Shannon Fagan pointed out that “the photographer must weigh the time [spent on] tracking such data against just going out and shooting more pictures for eventual sale.”

There is, however, no question that the more complete the data available before deciding what to shoot, the more likely the photographer is to not waste time on unproductive shoots. There is certainly no point in continuing to shoot subject matter that isn’t selling.

Most traditional agencies provide their image-identification numbers on sales reports. To track usage over time, the photographer must devise a way to track this data (for example, create and maintain a database). The photographer also needs to look up images on a given agency’s Web site, in order to visually determine why one image had greater appeal to buyers than others.

Microstock Web sites make this process considerably easier. These sites are searchable by category, and the results can be sorted by frequency of image sales. Portfolios can be viewed by ascending or descending number of downloads, highlighting best and worst sellers. The total number of sales for each image is also publicly available, making it easy for a photographer to see which subjects are in greatest demand among all work in his or her portfolio.

Such information is based on all images in the collection, so photographers can compare results with their competitors. In addition, photographers who have portfolios on several sites can easily compare results. Certain subjects may sell better on one site than on another.

This information demonstrates which shoots and which images within a particular shoot have been most productive. It also helps photographers determine which models and situations have held the greatest appeal for buyers and where to concentrate future efforts.

The photographer is not required to build complicated databases to reap this benefit. The information is completely up to date and available instantly.

In contrast, traditional sellers do very little to help their photographers figure out what to shoot or which of their images are of most interest to customers. At best, agencies supply photographers with general categories of in-demand subject matter. But the real issue is to identify the specific frequent-selling images in each category and the image qualities that appeal to customers.

Agencies have all this data at their fingertips. One would think it would be easy to make such information available to photographers, particularly since microstock portals do it. With better data, photographers would likely become more productive. Perhaps the agencies are embarrassed to show how few images actually sell, but these statistics will not improve if kept secret.

If agencies do not want to release this information to customers, why not supply it to contributors on password-protected pages? Password protection could also solve the problem of allowing one photographer to see the results of others. On the other hand, most photographers recognize that having some idea of best sellers in all categories would far outweigh the benefits of keeping individual statistics secret.

Reviewing a traditional agency’s inventory without knowing what actually sells is more likely to lead a photographer astray than be helpful. Often, agencies encourage photographers to shoot images art directors like to look at, rather than the images they actually buy. This may be good for the agency, as it gets art directors to the Web site, but it does little for the photographer who shot the image, if no one buys it.

Why aren’t traditional agencies doing as much as microstock portals to help contributors make better business decisions? Do agencies want their photographers to fail? Do they want those trying to make rational business decisions to decide that, given the risks of shooting images that do not sell, it is time to move on to some other line of work?

More and more frequently, successful photographers say that, given the oversupply in all categories, tighter editing and declining usage fees, it no longer makes economic sense to continue producing new stills. Add the need to guess what customers will want, without the benefit of any data, and more experienced shooters will move on to something else.