Microstock
For many photographers seeking to earn some, or all, of their living
producing stock images, one of the most important decisions in 2011 will
be whether to retire from the stock photo business or get into
microstock. Many photographers who are licensing their images at
rights-managed or traditional royalty free prices have seen their
revenue decline significantly in the last couple of years. They are also
skeptical that it is possible to earn any significant money licensing
images at microstock prices. As a result quite a few are choosing to get
out of the stock photography business.
Getty Images, Inc., has unveiled its new Photos.com site, developed for
value-conscious small business owners, marketers, graphic designers, web
designers and other creative professionals. Photos.com currently offers
2.5 million royalty free images and illustrations.
If iStock is really interested in improving the quality of its
collection and bringing the work of the best and most experienced
photographers into its top end collections it needs to drop the
requirement that exclusive photographers not have images that are
licensed as RF with any other agency. All the company really needs is
that the specific images they represent, and any similars, not be in any
other collection. They don’t need to define “exclusive” this tightly.
It is interesting that even Getty Images only requires “image
exclusive”, but iStock want to have more control over the lives of its
photographers.
2011 may be the year when the stock photo industry returns to the idea
of exclusive representation -- specifically, being exclusive with a
microstock agency. For many year the widely held belief has
been that the way to maximize returns was to get your images represented
by many distributors. Now, iStockphoto’s has developed an exclusive strategy that may bring
about a change in this way of thinking. While there are several
downsides for image producers to the iStock strategy, the upsides may
more that compensate for the difficulties.
For almost two years I have been following the sales of 197 of iStockphoto’s top sellers.
The tendency has been to think of these people as photographers, but in
fact 98 of them, or almost 50%, list their job description as something
other than photographer.
Ron Chapple, one of the first traditional adopters of the micro-priced model into his larger stock business, says that chances of making a sale have decreased by 90% in recent years.
iStockphoto has been working on a way to use language and country data to deliver more locally relevant results since last year.
On Monday, the Getty Images-owned microstock leader delivered on this
promise. The company also launched a new editorial product offering.
Unemployment in the United States may be affecting freelance
photographers in some not so obvious ways. While many photographers and
designers have either lost their jobs or are under employed what we
often forget is that those who still have viable businesses may now be
competing with the unemployed as they produce new images as a way or
earning a little extra cash.
A better question might be, “What’s NOT up with stock photography?”
Answer? Royalties, number of paid productions, royalty free and rights
managed revenues and photographer satisfaction.
The 24th annual Graphic Design USA stock survey shows increasing use of microstock by professional graphic designers.
iStockphoto COO Kelly Thompson says the company cannot keep growing
profit at the old royalty rates, so they have to reduce what they are
paying suppliers. The problem is not that the company does not have
substantial profits. Rather, it is Getty Images’ arbitrary standard
for what the gross profit margin in the stock photo industry should be
that causes the problem.
I asked iStockphoto COO Kelly Thompson why the company choose to base
“redeemed credits,” the number that serves as the basis for the new
contributor royalties package, on the number of credits downloaded
rather than the monetary value of the credits.
iStockphoto has announced a major restructuring in how photographer
royalties will be calculated in 2011 and beyond. In addition, within the
next few weeks they will create a small, higher priced Agency
Collection with images from shooters from some of the major traditional
RF brands and selected iStock contributors who will be invited to submit
images to the Agency Collection.
One of the questions of the Stock Artists Alliance spring survey asked:
“What other issues would you like to see SAA address in the year?” The
answers, particularly with regard to the general attitude toward
microstock, were very revealing.
Recently on Linkedin Jacintha van Beveren observed that “The old
photography business model is gone,” observed and asked if the road to
survival and future success is through “creativity and flexibility or
stubborn protection.” Neither.
When I published “Top Pros Stop Shooting” in my other newsletter Selling-Stock received an unusual number of comments from industry leaders. Most of those who commented had some disagreement with
the positions I took in the article. Since PhotoLicensingOptions readers will have missed
seeing these comments, I have printed them here along with an editorial response.
If you have decided you want to enter the microstock world, you can’t get better advice than is contained in Ellen Boughn’s newly release
Microstock Money Shots. Boughn doesn’t promise that it’s easy or that you’ll get rich quick, but she will save you a lot of the frustration that comes from learning the hard way by trial and error.
Two-year-old Pixmac is banking on its “rapid checkout and download”
without the necessity for customers to engage in a complex registration
process to help the company expand its customer base in North America.
One of the things RM and traditional RF photographers tend to overlook
is average price-per-image-licensed. Photographers worry when their
images are licensed for low prices. They track their average
royalty-per-image-in-file and the trends of their monthly royalty check.
But is a lower royalty check the result of fewer images being licensed,
a lower average price-per-license or both?.
This chart is designed to give the reader an understanding of the number of times images belonging to some of the top microstock photographers at iStockphoto are licensed in a given year and what that can mean in terms of gross revenue.
Though
unit sales are declining for many iStockphoto sellers, many of the same people are also seeing significant revenue increases. Here’s how.
Ed.: Tom Grill originally wrote on the subject of volume relative to
price last November. The sentiment remains true today: like it or not,
the industry is changing dramatically, and the winners will be those who
can adapt to the new paradigm.
As little as five years ago, approximately 98% of all stock photo
revenue came from print uses. There was little or no Internet and small
business uses. Today about 20% of industry revenue comes from Internet and small business uses. The needs of these new customers were hardly addressed five years ago, as all traditional sellers focused on the high end of the market. Consequently, when someone
wanted an image for these purposes they either took the picture
themselves, or copied something off another Internet site and paid
nothing for its use. In the last five years the demand for images that
will be used electronically has grown dramatically.
This story provides links to a five part series of articles designed to help photographers understand the major trends impacting the industry in 2010 and help them plan for the future. We outline some of the issues to consider, new business models to explore and things to focus on in order to have a profitable business. Following the first five stories are links to some additional articles on the business of stock photography that may be of interest.