2000 Stock Photographer Profits Survey

297

April 9, 2000

One-hundred-thirty-eight photographers responded to our Stock Photographer Profits
Survey. Combined, they had total stock income of $12,636,770 in 1999 and
additional photographic income of $7,721,715 for a total photographic income of
$20,358,485.

The average stock income per photographer was $91,571 and the average total photographic income
was $147,525. The average photographer earned 62% of their total photography income
from stock. These figures were up slightly from the 1998 averages which were
$87,214 and $139,981 respectively. We had 185 photographers supplying figures for
1998 compared with only 138 for 1999.

The survey was mailed to over 1,500 and made available on-line. About 2/3rds of
the respondents completed their survey on-line. The rest mailed in the printed
survey. On average the respondednts had been producing stock images
for 14.6 years.

This year we tried to reach out to photographers living and working outside the
U.S. It was our hope to compare income of foreign photographers with those in the
U.S. The effort was wholly unsuccessful. Only 11 respondents lived outside the
U.S. and four of those were in Canada. Thus, the sample was way to small to
provide any useful comparative statistics.

About 29% of the total stock sales were made direct to the buyers by the photographer.
This compared with 24% for 1998.

To put these numbers in perspective for the
industry, I estimate that worldwide stock photo sales are about $1.25 billion.
Using the 29% figure of direct sales to agency sales as a way of dividing the total
world market, photographers may earn $310,625,000 by dealing directly. Of the
remaining $887,500,000 ($1.25 billion minus $310.625 million) photographers might
receive $362,500,000 as their share. This makes the total photographer share of
the world market $673,125,000.

If we divide the photographers stock income in this survey into $673,125,000 we
find that 53.3 times what our survey photographers earned would equal the total
world market. Multiply that number by 138 and we have 7355 which should be
approximately the total number of stock photographers in the world, if our sample
was totally representative.
I believe that actual number of stock photographers is probably much higher, but
many are very marginally engaged in the business of stock photography.

The respondents to our survey represent less than 2% of the total stock photographers
in terms of gross income worldwide. This is a very small sample and random
selection was not used. Both factors could result in distortions.
As we analyze this survey data I believe it will be clear that this sample
of respondents is above average, rather than being representative of the average
stock photographer.

Income From Agencies

We asked photographers to provide figures for that portion of their business that
was related solely to the licensing of still photos. We purposely excluded art
decor and motion picture production from this survey.

The total income generated by stock agencies was $9,121,812. Twelve photographers,
or 9%, were not represented by an agency. All their income was generated through
direct sales. The total stock income for these 12 was $368,000, or an average of
$30,667 per photographer.

Forty photographers, or 29% of all respondents, were represented by only one
agency. Their total stock income was $2,643,523 or 21% of the total income from
stock. The average stock income per photographer of this group was $66,088. One
notable fact is that this includes many of the top individual producers who are
with agencies such as Stone, The Image Bank, The Stock Market and FPG.

The 86 photographers (62%) who had more than one agency had gross stock income of
$9,625,247 or $111,921.48 per photographer. On average each photographer had 4.29
agencies. In 1998 only 48% of the photographers had more than one agency and the
average was only a little over 3 agencies for those with more than one. This
indicates that in 1999 photographers were moving to diversify their representation,
and their risk of having all their income come from a single source. Thirty-four
photographers said they had signed new agency agreements in 1999. There were a
total of 145 different agencies named in the survey.

The average stock income for photographers with multiple agencies is much higher
than the $66,088 average for those with a single agent, or the $30,667 for those
without an agent. Thus, it appears that while being represented by a stock agent
results in increased income, exclusive arrangements with agencies are not necessarily
in the best interest of the photographer.

Average Income Summary

There were 51 photographers who earned more from direct sales than from any single
agency that represented them.

Taking Expenses Into Account

The estimated total expenses necessary to produce the total photographer income was $8,248,348.
It should be noted that 8 of the respondents reported no expense figures. To give
a fair representation, we removed their income figures from the gross income
category before deducting expenses to achieve a net income figure. We divided the
result by 130 to get the average which was $63,448 expenses per photographer.
Thus, if the average gross photography income is $147,525 and we deduct the $63,448
we get $84,077 net profit before taxes.

In the expense category photographers were asked to include: film,processing,
dupes, props, sets, models, assistants, travel, digital scans &outputs, marketing
costs, computers, camera equipment, studio and officerent, phones, office equipment
and supplies, accounting, insurance,depreciation, continuing education, etc. We did
not ask photographers to break out expenses just for the stock side of their
business because we felt it would be too difficult to separate for those who do
both stock and assignment work.

It should also be noted that only 62% of this $84,077 was income resulting from
stock sales so the average net income from stock sales after expenses were
deducted, and before taxes, was $52,128. In doing the calculations this way we
have assumed that the expenses for the stock
and assignment sides of any particular photographic business are proportional to
the income. This is probably not true. In spite of the potential inaccuracies of
this average stock sales number we believe it gives some sense of the costs of
producing imagery and the understanding that income from stock imagery is not cost
free.

One-hundred-thirty photographers made estimates of the number of days they worked
to produce their stock income. The average was 106 days. In 1998, the average was
134 days. This may indicate that photographers are cutting back on the amount of
effort they put forth to produce new stock images. Certainly we have anecdotal
evidence that some photographers have been cutting back
on production because they can't get a significant portion of what they produce
into catalogs, or on-line where buyers can see the images. While this would
indicate over a 20% drop in production in the past year the way the data was
collected is open to a wide margin of error. Nevertheless, agencies should look
closely at the number of new images offered for consideration, and the number
accepted, in 1998 and 1999 to determine if this trend is evident in their specific
situation.

Summary Figures

Tony Stone Images

The agency with the most photographers represented was Stone with 47 photographers
reporting some income. The total royalty payments these photographers received from
Stone was $2,145,285. The average gross stock income of a photographer represented
by Stone would be $45,644,36.

Because we got such a good representation from this particular agency, and because
other statistics are available from Stone, we may be able to draw some conclusions
about how accurately this survey represents the stock industry at large.

Gross sales for Stone in 1999 were probably in the range of $100 million. Stone
says they pay their photographers approximately 36% of sales. Thus, the gross
sales this $2,145,285 in royalty income represents would be approximately
$5,659,125.

This figure is a little less than 1/18th of the total gross sales of Stone.
Multiplying the number of respondents, 47, by 18 we get 846 which should be the
total number of Stone photographers, if our survey group is average. We know that
18 months ago Stone offered new contracts to about 1,000 photographers, and many of
the photographers they still represent were not offered contracts. Some
photographers who still receive royalties from Stone, are not operating under the
new contract, are included in our 47.

This would indicate that those who responded to our survey are doing better than
the average Stone photographer, not worse.

Based on Stone alone we might draw the conclusion that photographers responding to
this survey are more successful than the average stock photographer. Unfortunately,
we didn't get a large enough block of photographers reporting from any other major
agency to varify this conclusion.

Getty and Corbis

Eighty six photographers had images with either a Getty or Corbis
owned agency. The total stock income of these photographers was $9,166,999. This total
can be divided into $2,309,371 from direct sales to clients, 5,136,768 from companies
controlled by either Getty or Corbis and $1,720,860 from other stock agencies.

The breakdown for the various agencies was:

These figures represent 62% of the total respondents to the survey, and 74% of the
income. Sixty-three, or 73% of these photographers were represented by more than
one agency. I estimate that Getty and Corbis combined control about 45% of the
total market for stock photography.

Comparisons With Surveys Published In 1998 and 1999

There are some interesting comparisons between the survey we published in
March 1998, the April 1999 survey and this one. In 1998 we supplied a series of income
categories rather than asking photographers to list their specific income.
The comparisons of the number of photographers in each category and the gross
1999 income in each category are listed in the table below.

One cause for concern is that 45% of the photographers responding to the 1999 survey earned
in excess of $70,000 while in 1997 and 1998 the percentages were 34% and 35%
respectively. This, coupled with the lower number of respondents, could mean that
many of those who answered pervious surveys, but didn't respond this time, are earning
lower figures. It that is true, and they could have somehow been included in the 1999
figures, it would have lowered the averages. It is also significant that the number of
photographers earing in excess of $150,000 is slightly lower proportionately
than in previous years, but the number in the lowest category
($70,000 to $100,000) increased significantly indicating that some who were previously
in higher income brackets may have had a reduction in earnings.

Seventy photographers reported that their yearly income from stock is increasing.
Twenty-six said it is about the same as last year and 26 said it is decreasing.
Sixteen did not respond. Of those who responded to the question 57% indicated
sales were still increasing and 43% said they are the same or lower than last year.
This percentages are about the same as 1998.

The increased number in the $70,000 to $100,000 range could also mean that more people are
moving up from lower levels of income, but if that were the case one would expect the
number of people in the higher income categories to also be increasing somewhat.
Clearly, the lower number of overall respondents to the survey over the last
three years is mostly a result of fewer low income photographers responding. The
numbers of high end respondants have stayed relatively stable.

Click here to review the 1997 survey results, (Story 125 )
and the 1998 survey results (Story 213 ).

Other relationships

Thirty-nine photographers, or 28% of the total made their entire photographic
income from stock. Fifty-five or 40% made all of their stock income from stock
agency sales, and nothing from direct sales. This was up from only 21% in 1998.

Twenty-six photographers reported some barter income, but the total barter income
was only $95,040 or less than 1% of the combined total photographic income.

Thirty-five photographers (25%) reported they earned some income from Royalty Free
compared with only 9 in 1998. Three said they self marketed their RF images while
most sold through the RF companies.

We tried to determine the percentage of each photographer's work that was either
generic images that require little regular updating, or images thatneed to be
updated regularly. The generic which don't change include such subjects as:
wildlife, scenices, babies with no clothes and certain concept illustrations. The
kind of images that need to be updated frequently include business and lifestyle
images where clothes, hair styles and equipment peopleuse change frequently.

The percentage figures used to calculate this number were estimates made by each
photographer and left quite a bit of room for variation. The results were 53% that
do not require updating and
47% that must be updated frequently. This was about the same as last year. While
the percentages varied greatly from photographer to photographer, some worked
almost solely in one category and others worked almost solely in the other
category.

As more and more images can be found on the Internet those who are considering new
generic production need to check out the most popular site to see if what they have
in mind to shoot is already available. There is a limit as to how much redundancy
is needed in any given subject area, and how much it will be profitable to shoot.
In addition many of the most popular sites simply won't put up a new pictures if
they already have something scanned and keyworded that they believe will work just
as well for the buyer.

We asked photographers to consider their work in terms of two broad market
categories -- editorial and corporate/advertising. They were asked to give the
percentage of their total production that fit into each of these two categories and
they worked out to be 45% for editorial, 50% for advertising and 5% other.

In addition to producing stock photography 12 people said they were involvedin some
manner in marketing the work of other photographers.