After reading
Stock Photo Market Size In 2011 Tom Zimberoff asked several question that need a more detailed response.
1) You wrote, "While microstock revenue has grown in the last couple of years, it has been mostly due to price increases and not due the an increased number of images licensed."
Jonathan Klein himself said publicly, in 2010, that the number of images licensed by Getty/iStockphoto has increased exponentially. Of course, he did not say there was a corollary increase in revenue. What data underlies your contention that microstock prices have increased, an overall revenue increase (if there was one) notwithstanding?
2) You wrote, "The steadily improving quality and variety of the microstock collections have made it much easier for customers to find the imagery they need in these collections and at these price points."
Not that I have any substantive data to the contrary, but I wish you would elaborate about how microstock collections are getting subjectively, or even objectively, better. Are there any data to support that idea?
3) Finally, you also wrote, "I believe the increased demand is being fulfilled by free imagery and imagery that those who might be potential customers create themselves, and not by imagery they are willing to pay anything to use."
If that is an assumption, on what is it based?
Answer to Question 1
As far as price increases are concerned it is very easy to go to iStockphoto’s site and check out the prices and the new products. In the last two years iStock has added 4 new brands – Exclusive, Exclusive+, Vetta and The Agency Collection (TAC) – each at a different price point significantly above their non-exclusive prices. Check out
Microstock Price Increases.
At a recent
conference in Russia Dittmar Frohman of iStockphoto reported that iSock is now paying out $1.9 million a week in royalties. Assuming this is the average weekly payout for the year that would be $8.2 million per month or $98.4 million for the year. Since the royalty payout is probably between 25% and 30% of gross revenue (top producers earn higher royalties) that puts my $350 million estimate for iStock for the year in the ballpark.
At the end of 2007
Goldman Sacks reported that iStockphoto sales were $72 million so the jump from $72 to $350 is significant.
Did Klein provide any date parameters for that statement about the number of images licensed increasing exponentially? If we go back to February 2006 when Getty purchased iStockphoto the number images that brand licenses has certainly “increased exponentially.” Here are the numbers during the period when Getty was public and reporting figures.
| 2005 |
4 million |
| 2006 |
10 million |
| 2007 |
17.55 million |
| 2008 |
25 million (estimate) |
But in 2009 and things started to change. To track the number of images downloaded I use stockcharts (
http://istockcharts.multimedia.de) an independent company that tracks about 90% of the downloads from the istock collection.
Currently they are tracking 37,624 contributors who have had a combined total of 112,721,078+ image downloads since each contributor began licensing images through istockphoto. These numbers need a little more explanation.
iStock currently has over 100,000 contributors so how can I say that the downloads of 37,624 represents 90% of the downloads? The vast majority of iStock contributors make few if any sales and therefore are not tracked by istockcharts. In fact 1,891 of the 37,624 tracked by istockcharts have made no sales so far and another 3,047 have made between and 1 and 5 sales.
The other thing to consider is the “+”. What does that mean? In early 2009 iStock used to report on each contributor’s portfolio page the exact number of downloads the contributor had up to that moment. (istockcharts captures that data.) Thus as of on June 1, 2009 we know that 29,201 contributors had a combined total of 63,801,192 downloads. In that month iStock changed from reporting the exact number to the lowest whole number if the contributor had more than 10 downloads. If the contributor has more than 10,000 downloads the actual number could be anything between the number reported and the next higher thousand. If the contributor has more than 100,000 downloads (only 169 have reached that magic number) the number could be anything between the number reported and the next higher 10,000. Obviously, the possible higher number is quite large.
If everyone of these contributors was just one download away from the next higher number we would need to add about 19,575,130 downloads to the current total reported by istockcharts. But, some will have just passed the low number reported so if we take an average of 9,787,565 and add that to 112,721,078 we get 122,508,643. This may not be exact, but it will certainly be in the ballpark. Now go back to the 63,801,192 on June 1, 2009 and we get 58,707,451 images downloaded in the following almost 30 months. That comes out to an annual average of 23,482,980 compared to the 25 million we think were downloaded in 2008.
Using these figures and anecdotal information from the comments of many microstock photographers on blogs, particularly
www.microstockgroup.com, I believe that the number of “downloads per month” peaked for iStock in the Spring of 2009, and has been generally declining slightly since then. But, don’t cry for iStock because with price increases and adding new higher price collections (and oh by the way cutting the royalty share paid to non-exclusive photographers at the beginning of 2011), gross revenue and profits for iStock and Getty Images have been going steadily up.
What Klein cares about is increasing revenue and profits. In addition he has the ability to put a positive spin on whatever numbers he has to work with. I’m sure that what he said was accurate, but I don’t believe he was talking about number of downloads in the last two or three years.
Now, before leaving the topic of increased demand there is at least one other thing we need to look at. The demand for iStock’s higher priced product may not be growing, but the demand for microstock might be. We have to look at
Shutterstock.com,
Dreamstime.com,
Fotolia.com and all the other microstock options. I believe that the total microstock images downloaded in 2011 will be somewhere in the range of 100 million so these other guys represent more than three-quarters of the market and we have no accurate figures on any of them. I believe Shutterstock is licensing more downloads than any of the other companies, but at lower prices. It could be that while iStock is losing some customers the others are not only picking up these customers, but also supplying an increasing number of images to new customers. I don’t think this is the case, but I can’t prove it with figures. In any event, I think it is hard to argue that there continues to be “exponential” growth in the demand for images that customers are willing to pay to use.
Answer to Question 2
It seems to me that the only ways to determine whether one image, or a collection, is improving or getting better than another is to look at what the collection offers over time. Every individual will have a different opinion. I go to iStockphoto, search for various subjects and organize the search by number of downloads (the images customers are buying most frequently). As I have done that over time it seems to me that there are more and more very fine images in the first few hundred that I look at.
Then I go to Getty Images and look at what they are offering. I think about what customers are using when I see images in magazines, direct mail pieces, posters and on the web. In most cases I find more images on iStock that I think customers will use than I find on Getty. It could certainly be argued that the images on the Getty site are “more creative,” “edgy,” and “artistic,” but are they what customers are willing to pay money to use?
Clearly, the statistics show that the customers purchase about 100 microstock images for every RM image they purchase from Getty. Maybe it is because everyone is cheap. Maybe it just shows a lack of discernment, taste and good sense on the part of customers, but if you are trying to sell something you’ve got to give the customers what they want.
Answer to Question 3
I can accept that there may be increased demand, although I know of no way to quantify how much that demand is increasing. But I think there are enough statistics to demonstrate that image licensing is not growing, or at the very least is not growing significantly. So how can customers satisfy their increased need for images without paying to use them?
1 –PicScout tells us that 85% to 90% of the professional images on the web are used without a proper license. People right click and use the images they want.
2 – Customers can go to Flickr and find a lot of images that are available for free use with a Creative Commons license.
3 – There are lots of images available on blogs where there is no indication that use is restricted in any way.
4 – With today’s camera equipment and iPhones it is easy for customers to create many of the images they want to use and post them on the web.
5 – More and more web customers are switching from stills to video.
6 – If you find an image you like on someone else’s site it is easy to link to it rather than posting the image to your own site.
I’m sure we could think of many more. The simple fact is that the professional photographer is not needed as much as was once the case. Here are some links to older stories that might also be helpful.
Average Return From iStockphoto
http://www.selling-stock.com/ViewArticle.aspx?id=1d2a7d13-ccdd-4c6d-b6a7-55a0b3318fff
iStockphoto Update: Examining Microstock Treads
http://www.selling-stock.com/ViewArticle.aspx?id=654054a4-2de7-4992-870d-7ccaeaa86a47
Microstock Plateau: iStockphoto July 2010
http://www.selling-stock.com/ViewArticle.aspx?id=4f0d1792-db29-46d0-88e3-dee4c0bae4bb
Getty Statistics: 2006 and 2007
http://www.selling-stock.com/ViewArticle.aspx?code=JHP2003