Stock Subjects In Demand

30

August 6, 1996 -

The figures below will give you an idea in broad terms of the subject matter we
have been selling at Stock Connection in the last couple years. All of the
images are in either print or digital catalogs.

I believe these percentages for use of different subjects are roughly
equivalent to the experience of most major general agencies based on my
conversations with a few agents and many photographers.

Stock Connection is making more sales from digital catalogs than from print and
one of the nice things about that is that the cost of putting an image in a
digital catalog is much less than the cost of putting one in a print catalog.

Proportionally to the total number of images we have in catalogs, print and
digital are doing about equally well for us. On average only about 15% of the
images placed in either type of catalog sell at least once in a given year.
Some of the major agencies that distribute more copies of their catalogs do much
better than this. I believe there are very few catalogs produced today where
every image shown in the catalog sells at least once the first year.

Obviously, what sells has a great deal to do with image selection. Some
photographers sell a much larger percentage of their images in the first year
than others because they shoot the type of images that are in greatest demand.

The breakdown of sales over the past two years by subject are:

In 1995 Stock Connection made sales in 38 states. The proportions for each
state were comparable to the relative size of the markets. The biggest
percentages were in New York and California with Texas and Illinois not far
behind. Not many sales in Iowa and Mississippi.

The following lists the percentage breakdown of the type of usages licensed by
Stock Connection over the last couple of years. These numbers are based on per
image licensed. The average usage fee for brochures was very close to our
overall average sale of $590. The average paid for advertising uses was much
higher than our overall average and the average paid for consumer editorial and
textbooks was lower. Thus, the actual percentage of income from each of these
categories will vary from our percentage of number of images sold. At Stock
Connection the photographer gets 75% of the gross fee collected.

I believe that the overall market for stock photography is about $700 million
annually world wide. Probably more than half of the number of images used are
for editorial purposes, but in many cases the fees for editorial are so low that
probably no more than 15% to 20% of the gross dollar value of stock sales is for
editorial images. Sales for book usage probably represent about 10% of the
worldwide market. The majority of dollars for stock photo sales come from
various types of advertising and brochure uses. You can compare these general
statistics with our experience to see the market areas where we are strong and
weak.