The number of images currently available in online databases has been referred to as “
oversupply,” but if the market for images were growing at a pace faster than the supply, then this huge number of available images might not be oversupply at all. Certainly, in the last few years there has been dramatic growth in the use of images on the Internet, a market for images that virtually did not exist 10 years ago. Some believe that the potential for growth of the Internet is infinite, and that there will always be an ever-increasing demand for imagery.
Was growth in revenue generated from the licensing or sale of images in the last few years? Unfortunately, no one tracks the revenue earned by salaried photographers working for corporations, but we do know anecdotally that there have been cutbacks in the number of jobs, particularly in the editorial field. Likewise, no one tracks the revenue earned by self-employed photographers, particularly those doing portraits and weddings, which certainly represent a significant portion of the monies paid for photographs.
The one area where there are some generally agreed upon numbers is in the licensing of rights to stock images. Most of these sales are controlled, worldwide, by a relatively few large organizations, with Getty Images being by far the largest and most dominant. Until Getty went private in early 2008, the statistics the company published on a quarterly basis were very helpful in determining the size of the worldwide market—estimated at about $1.8 billion annually for most of the last decade, with little of no growth.
Getty regularly acquired other major companies in the industry. As a result, its gross revenue grew—not because the market was growing, but simply because the company continuously absorbed a larger and larger portion of that market. During the first part of the decade, the market that Getty and all stock photographers served was mature, and the decline in the use of images in printed publications has since began to take place. Thus, there was very little change in overall demand.
However, around 2006, the first of three significant changes began to alter the market for stock photos. The demand for imagery that could be used on the Internet was growing, but most potential customers had very small budgets and tended to grab images from other sites rather than purchase the images they needed. While the images were the right price—free—it was often difficult to find the right image by randomly searching the Internet. Designers began to share images, and sites designed to facilitate such sharing, for example, iStockphoto, were developed.
At first, there was no charge to use the images. Supplier simply earned credits, which could be exchanged when they needed an image from someone else. When it began to cost real money to operate such sites and some suppliers started earning a lot more credits than they could effectively use, site operators began to charge “micro” amounts for each download—and the term “microstock” was born.
At the beginning of 2006, Getty purchased iStock, the leading microstock seller at the time. iStock offered a convenient online search and delivery system and licensed rights to stock images for $1. Tens of thousands of small businesses and consumers who could not afford the professionally produced images offered by Getty and other professional sites rushed to iStock to purchase the images they needed for their projects.
At first, the images were of low overall quality, and there was a relatively small selection. iStock and the other brands licensing images at the same low prices were not considered a threat by most professional photographers. Microstock was mostly used on the Internet, and traditional sellers had not been earning much from that market anyway. Traditional customers who tended to buy images for use in printed products continued to use the same sources for imagery they had always used.
As time passed, the quality of microstock imagery improved, and the selection was expanded to the point that some traditional customers began searching these sites for many of their projects. They found lots of images they could use at ridiculously low prices compared to what they were used to paying. Meanwhile, all those small users who had been unable to afford images before became great fans and promoted microstock to their friends.
The total number of customers and the total number of images being downloaded from microstock sites grew at an extremely rapid pace through 2007. By 2008, however, the pace of overall growth in the demand for microstock began to slow. Yet traditional customers’ use of microstock is still growing. Traditional customers purchase images primarily to use in printed products. They are not using more images—in fact, in some cases, they use less—but now, they are able to get a much higher percentage of the images they need at a fraction of what they paid previously.
Microstock prices have gone up to where they are averaging between $6 and $10 per image; traditional sellers have lowered their prices significantly at the same time. Consequently, while many more images are being licensed now than in 2005, the vast majority of those licenses are for such low prices that the gross revenue generated in the industry is down.
The second thing that happened was the decline in the use of images in print—because of the decline of print itself. Traditionally, the major uses of stock images have been for some type of printed product. When fewer magazines, newspapers, brochures and catalogs are printed, there is less need for still photography. This development is totally beyond the control of any photographer.
Then, the 2008 recession hit. By mid-2009, the worldwide market for stock photography was no longer $1.8 billion, but hovered somewhere around $1.45 billion—perhaps less. After a 20% decline, the market has probably leveled out, but there are no indications that it will re-enter a growth phase or return to its previous level.
If iStock statistics are representative, the total market for micro-priced imagery has reached a plateau. Microstock sellers have been raising their prices in an effort to grow revenue, and it looks like some customers who need really cheap images are going somewhere else like Flickr or Google to find them. If that trend continues, future growth of Internet sites may not mean future growth in images purchased for use on the Internet.
Some believe and hope that an economic recovery will help the market for stock images return to where it was before. That, however, does not take into account the continued decline in the need for printed products.
Looking forward
We seem to have reached a plateau in the number of images being purchased for Internet uses. There is every indication that the number of print uses will continue to decline and prices will fall.
Will the number of microstock images licensed decline? Can declining use be offset by price increases? As microstock prices rise, will there be cheaper alternatives for some customers?
There will undoubtedly be an increasing number of images used on the Internet, but will they be paid or free uses?
Will the images used on the Internet be stock images or images created specifically (on assignment) by or for the developer of the particular site?
The Internet is a video medium. Will the increase in demand be for video rather that stills?
Will microstock price increases lead to revenue growth for individual photographers? The indications are that increasing demand from low end users will not be great enough to offset overall price declines. Thus gross revenue generated is unlikely to grow.
If prices are raised, will the low-end customers go somewhere else, like Flickr or Google, for the images they need?
Some answers to these questions are more certain than others. One thing is certain: In 2005, there were probably less that 2,000 photographers worldwide earning significant money from stock photography, and maybe 30,000 to 50,000 producing images for licensing through traditional stock agencies. Now, probably in excess of 400,000 individuals have gone to the trouble of placing their images in searchable databases in an effort to earn something from them. They are all chasing the same $1.45 billion.