Royalties
In all the excitement about 35 million FREE images it is worth looking back at some of things that have been happening at Getty Images in the last three months. After watching revenue decline for the fifth straight quarter, and many of its top producers cut back on production or stop supplying new images altogether, Getty evidently decided that their turn-around strategy wasn’t working and they needed to make some radical changes.
Getty Images has announced to its Flickr contributors that it has provided notice to terminate its existing agreement with
Flickr. The original 5-year agreement went into effect in July 2008. Getty has been unable to come to a new agreement at this time. Getty says they continue to be open to working with Yahoo!/Flickr.
Most photographers believe stock photo prices are declining everywhere. But not at
Shutterstock where they have seen a 27% increase in 3 years from $1.91 per download in Q4 2010 to $2.43 in Q4 2013. RM and traditional RF photographers are thinking, “This is not a story for me. I’ll never go near any distributor with prices that low.” Please don’t give up. Let me walk you through some numbers that you may find useful and interesting.
Shutterstock has reported a record 28 million downloads and $68 million in revenue for Q4 2013. The company’s revenue for all of 2013 was $235.5 million, up from $169.6 in 2012. About 28% of the revenue was paid out to contributors in royalties.
More and more stock agencies that license RM and Traditional RF rights are becoming aggregators of images rather than direct sellers of images. This is not a new phenomenon, but as more and more customers tend to go to a few large databases to find the images they need it is having a major impact on the income of many photographers.
It is getting harder and harder to decide which stock photography licensing model to use if a photographer’s goal is to maximize earnings. For a long time it was generally assumed that the way to maximize revenue was to license your images based on usage (Rights Managed). In this way the seller could charge a lot of money – sometimes many thousands of dollars -- when a customer wants to make extensive use of an image. The fatal flaw in the RM licensing strategy is that when every sale is negotiated, there is a tendency to accept whatever a customer is willing to pay. See some comparative statistics about all the licensing models.
Alamy has decided to lower the payout threshold for contributors and make payments whenever a contributor has $75 on account. No fees will be charged at the Alamy end regardless of the method or currency the contributor chooses.
After the announcement of the
Shutterstock/Facebook agreement that makes images available FREE of charge to businesses that advertise on Facebook, I contacted Shutterstock for additional clarification.
Photographers who are licensing their images based on usage (RM) need to give some careful thought to the lag time between creation and when they are likely to see any money. This is particularly true if they are licensing their images through an agency as the lag time seems to be getting longer and longer.
Shutterstock has reported a record 24.3 million downloads and $56.8 million in revenue in Q2 2013. Revenue per download grew 5% year-over-year to $2.33. This was driven by a continued shift toward on demand, direct sales and footage downloads, all of which carry a higher effective price-per-download. The Shutterstock collection has grown to more than 28 million images and over 1 million video clips.
Alfonso Gutiérrez, President of CEPIC has provided some updated information on the CEPIC Image Registery (CIR) that Selling Stock reported on earlier
here and
here. See his report.
Since he started producing microstock images in 2005 Yuri Arcurs, the world’s top selling microstock shooter with over 1,500,000 downloads from iStockphoto alone, has been a strong advocate of non-exclusive representation and not putting “all his eggs in one basket”. Recently he signed an exclusive deal with Getty Images.
At the CEPIC Congress in Barcelona on Wednesday June 12th there will be a discussion on a new initiative that could generate significant new revenue for image creators whose images are “crowd sourced” and posted without authorization to various domains on the Internet. This story examines the “Winston Project,” a system for collecting revenue for “Passive Image Use.” when a user uploads an image created by someone else to a “crowd sourced” domain, or when a user clicks on an image or shares it within the domain.
Last week we wrote about the
miniscule royalties that appeared on Getty’s February royalty statements. Many Getty Connect sales showed a royalty of $0.00.
Getty has acknowledged that they made a rounding error on the recent statements and will report micro-royalties in fractions of a cent up to 5 decimal points in the future. Conceivably, a photographer could earn $0.00001 (one thousandth of a cent) for one license.
Last summer Getty Images launched an API initiative called Connect by Getty Images that made it possible for then to collect a share of the advertising revenue when an ad appears on a page where a Getty Image is shown. One of the first companies to use the API was Yahoo. In the February statements Getty is reporting royalties from some of the early pay-per-view deals. The numbers being reported have alarmed a number of Getty’s contributors.
In its quarterly conference call Shutterstock reported revenue of
$169.2 million for the full year of 2012, a 41% increase over the $120.3 million in 2011. Fourth quarter revenue was $49.2 million, a 42% increase over Q4 2011. Looking ahead, the company expects to see revenue of between $48.5 and $50.5 million in Q1 2013, and for the full year revenue in the range of
$213 to $219 million. Shutterstock stock (SSTK) closed at $32.88, up 17.22% on Friday.
Many photographers that license their images at RM and traditional RF prices still believe microstock images are being licensed for $1.00. For the most part nothing could be further from the truth. Consider these price comparisons for images on 7 different microstock sites with the average price for an RM or RF sale on Getty Images. You'll be surprised!
Several major image producers that license their work through microstock distributors have told me that their revenue from
iStockphoto (IS),
Fotolia (FT) and
Dreamstime (DT) was down 25% to 30% in 2012 compared to 2011. What’s more, based on current trends they are predicting 2013 revenue will be down 35% to 45% compared to 2011.
There is increasing dissatisfaction among iSockphoto contributors as a result of
Googlegate, and other recent moves by iStock. Many of the approximately 5,000 exclusive contributors are exploring the option of giving up their exclusive and placing their images on multiple web sites. Shutterstock is actively pursuing iStock exclusive contributors and has created a direct email address,
wbva@fuhggrefgbpx.pbz, to guide them through the signup and approval process.
As we near the end of 2012, I’ve just received a copy of Alamy’s financial statement for 2011 that was filed with
Companies House in the UK in August of this year. In 2011 Alamy’s gross turnover was £14,853,670 (about $22,913,400). This was up $1,042,600 (about 4.8%) from $21,870,800 in 2010. However,
2009 revenue was $22,864,000 so in 2011 they were barely able to climb back from 2010's lost sales.
Due to an urgent need for North American imagery produced with a fresh approach
Image Source has announced that they will be offering a royalty rate of 60% for all imagery produced in North America and accepted between Dec 1st 2012 and through to Dec 31st 2013. The bonus royalty rate will apply for the lifetime of those images”, added Anthony Harris, the Group’s Chief Operating Officer.
Alamy has announced that beginning in January 2013 they will be reducing contributor royalty for direct and distributor sales by 10%. The new terms will be: Alamy Blue: Alamy commission 50%, Contributor commission 50% for Alamy Blue sales and 40% to the Distributor, 30% to Alamy, 30% to the Contributor for distributor sales.