Here’s a way to raise prices without too much pain on anyone. Forget about raising prices on the top end sales. Instead, raise them a little bit at the bottom end. I recently examined licenses of some major suppliers to Getty Images and iStock. They received a royalty of less than $10 on 95% for the licenses. The average gross license fee of these lower end transactions was $5.12.
Suppose instead of raising prices overall agencies add just a little bit to the gross license fee for their lowest priced licenses. To start, the bottom line price to use any image should be at least $1.00. Yes, that will be painful for the customers who have been getting images for $0.10 or $0.20. But, really, is there some reason images should be that cheap?
There is a cost in producing the image. If it is impossible to earn enough to cover that cost, then at some point producers will stop producing. Many photographers have already stopped producing. Unless there is some way to raise prices somewhat many more will follow.
If current prices are all customers can afford to pay, are they really worth having as customers? Does the money they are paying even cover the cost of servicing the account, let alone providing any significant revenue for creators?
Here’s a possible pricing schedule:
| Current Gross Sale Price |
Amount |
New price |
| |
to Add |
Range |
| Under $1.00 |
$1.00 |
$1.01 to $2.00 |
| Between $1.00 and $4.00 |
$1.00 |
$2.01 to $5.00 |
| Between $4.00 and $7.00 |
$2.00 |
$6.01 to $9.00 |
| Between $7.00 and $10.00 |
$2.50 |
$9.51 to $12.50 |
| Between $10.00 and $20.00 |
$4.00 |
$14.01 to $24.00 |
| Between $20.00 and $30.00 |
$5.00 |
$25.01 to $35.00 |
| Between $30.00 and $50.00 |
$6.00 |
$36.01 to $56.00 |
Considering what customers currently pay for images, these prices should not be too painful.
Maybe instead of a fixed dollar increase on each category it needs to be a percentage increase on what each customer is currently paying.
If customers really can’t afford to pay this much for the images, maybe it’s time to suggest that they look somewhere else for the images they need.
Based on the records I have examined these low sales currently represent about 95% of total images licensed. Combined they only generate about one-third of Getty’s total revenue. The other 5% of sales represent two-thirds of Getty’s total revenue.
If these numbers are an accurate representation of Getty’s total Creative business of $280 million then this increase would affect $100 million of Getty’s revenue and raise that segment of the business to about $133 million, assuming all their customers continued to use the same number of images, and they lose no customers.
Creator royalties would go up by 11% to 13%. Not much, considering how low they are for most creators now, but at least they would be headed in the right direction.
Maybe, my recommended figures for dollar increases are too high and need to be a smaller, at least to start. But isn’t it time for some movement in the direction of price increases. It is worth noting that at Getty 44% of current sales are below $4.00 (gross sale price) and another 33% are between $4.00 and $7.00.