Selling Stock has updated its estimates of the gross revenue generated worldwide by the stock photo industry in 2008. We have also estimated the number of images licensed under rights-managed, royalty-free and microstock models and segmented global sales by geographic region.
| Double counting image-licensing revenue |
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Virtually every major image supplier generates some of its revenue, and in some cases a significant part, from licensing images supplied by other agencies.
In these cases, the initial licensor of the image records 100% of the revenue on its books and then pays a portion of that revenue to the agency that supplied the image. This percentage can vary from 20% to 80% of the gross sale price, depending on the relationship between the image supplier and image seller.
For example, a distributor who licenses rights to a Getty Images' Photodisc image for $200 reports that as gross revenue, but the company also pays maybe 50% of that amount, or $100, to Getty, which then records this number as gross revenue. Thus the $200 sale has shown up as $300 in total revenue on the combined books of two companies, even though the customer only paid $200.
The Picture Archive Council of America attempted to address this issue in a 2003 member survey. The results indicated that 17% of the gross revenue of responding agencies came from sub-agents or distributors. However, given the relatively small response to this survey and observation of subsequent industry trends, it is entirely possible that the actual percentage is quite a bit higher--and still rising.
At a minimum, 20% of the total actually charged customers for the use of imagery is double counted. Thus, if we were able to total the gross revenue that all the distributors and image suppliers in the world report as income each year, it might come to an annual figure of $2.2 billion, even though image buyers only paid $1.8 billion.
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Worldwide, 2008 revenues generated by still stock photos and illustrations are estimated at $1.8 billion. There has been virtually no growth in this market in the last few of years. In the fall of 2008, Corbis chief executive officer Gary Shenk estimated 2007 industry revenue at $2.3 billion and predicted it would decline to $2.2 billion by 2012.
Note that this analysis does not take into account the revenue decline of the last few months. Because the first half of 2008 was strong, the declines at the end of the year still left some companies with growth for the year. For example, Alamy’s revenues were up by 7%. Jupiterimages’ decline for the year was under 12%. Thus, total industry sales for 2008 were likely flat or a little down.
The beginning of 2009 is another story. As of this writing, microstock sales seem to be continuing their upward trajectory, but we have no solid numbers for the rest of the industry. Photographers have been reporting significant declines in revenue, with some saying that February sales were down 30% to 40%, compared to 2008. Thus, it is reasonable to assume that we will see a decline in industry revenue in 2009—perhaps a higher decline than Shenk predicted earlier.
Shenk’s figures appear to be based on totaling the revenue generated by all companies selling stock photography, but that does not take into account the double counting that occurs in the industry. When double counting is taken into consideration, Shenk’s estimates are consistent with those of Selling Stock.
Selling Stock figures do not include revenue from footage, music, assignment work, rights clearance, poster sales (except for that part of the total revenue paid to use the image), fine art print sales, operating trade shows, database management or any of the other lines of business in which many of the industry’s leading companies are involved. The figures do include news wire service imagery, which for the most part is made available through subscriptions.
Upcoming articles in this series will offer detailed breakdowns of revenue by company, licensing model and geographic region.