Everyone says there is increasing demand for photos. And there certainly is for photos that can be had for $1.00 or FREE. But is there increasing demand from those customers who used to buy photos for use in advertising and major marketing campaigns? The following are some statistics. Unfortunately, this story may raise more questions than provide answers, but the questions are worth considering.
The high end buyers – those willing to pay more than $1,000 for the rights to use an image – used to be a significant reason for licensing images as rights managed (RM) rather than royalty free (RF). There are certainly many more RM images available than there were a few years ago, but are there more buyers for such images?
Getty has taken over Corbis, and is now unquestionably the primary source for RM images. Will Getty see an increase in high end sales and be able to raise prices or will the consolidation have little or no effect on high end sales?
I was able to analyze the 2015 sales of a major Getty RM contributor. I believe this contributor’s sales are representative of Getty’s overall RM sales. Customers paid over $1,000 for about 4.5% of the images licensed, and the average price was about $2,500. Almost 50% of images licensed were for $25 of less averaging about $8.00 each. The remainder of the sales were for prices between $25 and $1,000. Overall, the average price of all the RM sales was about $250. Also the percentage of high end sales seem to be steadily declining over the year both in number of sales and average price.
I believe Getty’s gross Creative revenue in 2015 was no more than $280 million. RM sales represented about $100 million of that revenue with the remainder coming from RF sales. If the average price of an RM license is $250 that would mean that there were about 400,000 RM sales annually. About 200,000 of them were for prices under $25 and only 18,000 were for prices over $1,000.
To put that 18,000 in perspective, in 2006 Getty’s overall gross revenue for the company was about the same as it was in 2015, but $325,930,000 or 40% of the overall 2006 revenue came from RM licensing. The average price of an RM sale was $546 and 607,945 RM images were licensed during the year. (See
here.) If 4.5% of the 2006 licenses were for more than $1,000 there would have been 27,357 of them (not 18,000) and they would have generated $146,668,500, more than three times the estimated $45M generated in 2015.
In 2006 Getty had 973,933 RM images in its collection and they represented about 55% of the total collection. (See
here.) Today, Getty has 5,460,821 RM images in its collection, 5.6 times the 2006 number. RM currently represents only 36% of the Gettyimages.com collection.
But to make matters worse only 152,640 of the RM images (2.8% of the total) are in the Prestige collection. It is these images that are considered most likely to be in greatest demand and they are the ones most frequently seen by customers. The chances are extremely slim that any of the other 97.2% of the RM images will ever be chosen for a $1,000 or greater sale.
But even if you have images in the Prestige collection there is only a 1 in 8.5 chance that one of your images will be chosen for a high end use in a year. Many of these Prestige images sit there and get no use at all.
Questions
1 – I would like to know the number of over $1,000 sales Getty is making and the trends over the last few years. One of the major reasons for supplying images exclusively for RM licensing is to get a crack at high value sales. If such sales are declining, as the figures above seem to indicate, does it make good business sense to continue to produce for that market?
2 – If, despite the increased overall demand for images, customers who will spend this kind of money are disappearing, what happened? Where did they go?
3 – If some of these customers are not buying stock anymore, where are they getting the images they need?
4 – If the odds of making such sales are declining, does exclusive representation with a stock agency still make sense?
5 – If there is little or no chance to make high end sales does it make more sense to license your work as RF (over 99% of all stock images licensed are RF and many RM images are licensed with such broad rights and low prices that they are effectively RF)?
6 – If producers can’t get access to more in-depth and accurate data can they afford to continue to blindly produce?