A photographer recently asked if I could point her to a chart that shows what royalty percentage each stock distributors pays its photographers so she could better determine which offered the best deal. She added, “I recognize that there were a number of factors involved -- home territories, partner agents, image collections, number of photographer’s images licensed, rights managed, traditional royalty free, microstock – so hopefully the chart would take all these factors into consideration.”
My Answer
There is no chart that clearly identifies which agency offers the best deal to its photographers.
The first thing to recognize is that royalty percentage is only one small part of the equation. 20% of $100 is more than 100% of nothing. In addition to royalty, the other important part of the equation is having some idea of the number of times your images are likely to be licensed by each agency.
Unfortunately, that will vary with every photographers and it is unknowable until you put some of your images with an agency and see what kind of return you get over a period of time. It depends on the kind of subject matter you shoot, the market demand for those subjects and the availability of other images that can fulfill the same client need. There are lots of photographers receiving 20% royalties who earn more on an annual basis than others who receive 50% or 60% of gross revenue.
Things To Keep In Mind
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About 80 images are licensed at microstock prices for every 1 image licensed as rights managed.
- About 40 images are licensed at microstock prices for every 1 image licensed at traditional royalty free price levels.
- The prices for microstock are going up. The prices for RM are coming down.
- Traditional RF prices are often higher than RM because (for the most part) they are not negotiable. (However, Getty with its Premium Access, and some other distributors, offer volume users substantial discounts on both RM and RF. Thus, it is impossible to know what the price for an RM or Traditional RF image is likely to be for any particular usage.)
- Prices for premium brand microstock images are often higher than the prices being charged for RM.
- Prices at all agencies are constantly changing.
The fact that on average microstock images are licensed more frequently than RM or Traditional RF doesn’t mean that your images will be licensed that frequently. Last year Shutterstock licensed rights to more images than any other stock photography site. Shutterstock licenses its images at microstock and subscription prices. On average, each image in the Shutterstock collection was licensed about 3 times.
Quality is important, but each buyer defines quality in a different way. The images buyers tend to purchase are often not what a panel of professional image creators would define as high quality. Fortunately, you can go to most microstock sites, search for particular subjects, organize the search returns by most downloaded and see what customers are buying. You’ll be surprised at some of the things that sell frequently. But, if you shoot a picture exactly like one of the most downloaded, I guarantee it won’t sell as well.?
Still Not Satisfied
After my initial response the writer was still fixated on percentages. She said, “Still curious though, what would you say the range of % offered to photographers today is? Would you say that 20% is the lowest that you've ever heard of, and 60% is the highest?”
iStockphoto starts at 15%. In the traditional environment a high percentage of the images are licensed by partner agents, not direct to the customer by the prime agent. In such cases the partner agent (sub-distributor) retains a large percentage of the fee collected. Typically, a photographer’s contract says she receives a percentage of what her prime agent receives. Thus, if the fee was $100 and the partner agent retains 60%, the partner agent sends $40 to the prime agent. If the photographer has agreed to a 20% royalty then the photographer receives 20% of $40 or $8 (8% of the gross sale price).??Or your agent could license your images through Getty Images. Getty does bulk deals called "Premium Access" with some customers for fees that work out to be as low as $5 to $10 per image licensed. Getty keeps 50% or more of that and submits the rest to the prime agent. If you have a 20% or 40% deal with your agent you can figure out what you will be receiving.
Agencies negotiate different percentages with different partner agents and these percentages are nearly always hidden from the image creator.? Normally, it is argued that partner agency percentages are trade secrets.
On the high side, T3Media has launched a licensing service call
Paya that offers 80% royalties.
PicturEngine has proposed a system where photographers can advertise their work and retain 100% of the fee they collect for usage.
Percentages are meaningless when it comes to trying to predict what a photographer might earn from any particular agency or distributor relationship.