5 Forward

Posted on 11/18/2010 by Tom Grill | Printable Version | Comments (5)

Editor’s note: At this year’s PhotoPlus Expo, I had a discussion with Tom Grill about where the stock photo business will be in five years. We agree on some points and have widely diverging opinions on others. Considering Tom’s track record in this business, his predictions cannot be ignored. This story outlines why he is bullish about the stock photo business. (Watch for an opposing point of view in the next day or two.) — Jim Pickerell

Recently, a new country album by Taylor Swift shocked the music industry by selling over 1million copies in its first week. This is unheard of in a music business, which has suffered similar woes to stock photography.  In the past decade, album sales have declined by more than 50%, yet Taylor Swift managed to buck the trend. Is there a lesson to be learned by stock shooters from her success?

She did it by producing a product aimed at appealing to a specific audience, and by utilizing the current social media technology to communicate with that audience.  This should come as no surprise to anyone in America, where we recently voted in a new President who used similar talents to find, serve and communicate with the voting public.

Records indicate that within the last 150 years, there have been a little over 30 boom-bust business cycles where the harder the fall, the greater the come-back—and vice versa. Changes in technology are usually the driving force behind the expansion and contraction aspects of these cycles. The bubbles often start with a new invention or discovery.

We have just come through one of the worst cycles of the past century. As we pull out of it, we can expect a proportional economic growth for approximately five years. Stock photographers should be preparing to ride this crest.
That is exactly what happened here. We have just come through one of the worst cycles of the past century. As we pull out of it, we can expect a proportional economic growth for approximately five years.  Stock photographers should be preparing to ride this crest now, knowing that future economic downturns will inevitably occur periodically as part of the global business cycle.

First and foremost, stock shooters need to re-examine their business model. The fundamentals of content have changed. The fundamentals of marketing content have changed. What it takes to be successful has changed, too. We cannot continue to measure ourselves with the yard stick of an out-of-date standard.  This business started in filing cabinets with rights-managed images, shifted to catalogs, moved to royalty-free stock on DVDs, introduced micro and will continue to evolve to meet the expanding needs of this increasingly digital market place.  All of these models are reactions to changes that have arisen in a delivery system brought about by the fluctuating demands of a customer base that itself is adapting to the availability of new technology.  A stock photographer has to ask not how do I get back to what was, but rather how do I create a product for what will be?  Dwelling on the past will do nothing but frustrate you and hamper your ability to move forward in our new reality.

As recently as the year 2,000, a $500–1,000 annual return per image was the norm for a good stock shot. Why so high? Because the need for quality images exceeded the capacity of skilled photographers that produced them. In recent years, that RPI has plummeted. Stated simply, in approaching the year 2,000, supply was substantially below demand. In the ensuing decade, that has shifted dramatically. The digital age changed everything: producing images became easier due to the shift to digital technology; disseminating images became easier with the advent of the Internet.

The erosion in pricing and the imbalance of supply and demand mean that we must adapt to a very different marketplace in order to make a living in the licensing business. First, we need to identify the specific changes that have had an impact on our industry in the past decade, and then we have to set about fitting into the emerging business model.

Coping with the influx of new stock shooters

The contributing base of stock photographers has always been stratified, with a small handfull of top producers responsible for the preponderance of the sales.
The number of stock photographers has increased exponentially in the recent decade with the advancement of digital camera technology and easier access to online image outlets, such as microstock and Flickr. All of these photographers will not be able to make a sufficient living to support a stock-only career — but most of them do not want that anyway. Most are in it for the thrill of an occasional sale. This over-crowding of suppliers has resulted in some of the easy image subjects becoming over-saturated, and supply has outpaced demand.

The contributing base of stock photographers has always been stratified.  Had you asked any agency of the 1970s through 1990s how many photographers they represented, the answer would have been in the hundreds.  Had you qualified the question and asked how many they would consider major contributors, the response would have been “only a handful.”  At the time, few photographers at any agency were responsible for the preponderance of the sales. Next there was a middle field of contributors who were content with significant but incidental income. And finally there was everyone else, the photographers who were only dabbling in stock. This structure has largely remained the same, but the numbers have changed; now contributors total in the thousands. Nonetheless, the top echelon of high-end earners remains small — larger than it was, but smaller in proportion to the overall number of contributors. Of course, the number of dabblers has risen exponentially through the easy portals of microstock and Flickr.

There is no doubt that, in order to make a healthy living in stock photography, you have to be strive for the top. When you are producing creative, well-executed, intelligent pictures that are relevant to the end user, you will make disproportionately more sales and will not need to concern yourself with the dabbling amateurs who will continue to come and go.

Print-to-digital revolution

A popular topic currently is the demise of print. We have watched many magazines close this year, and all trends point to younger generations being far more captivated by mobile devices. These facts cannot be argued. The print media that rely on urgency and time-to-market (specifically newspapers) will make a complete move to digital within the foreseeable future. It is not practical or timely or green to rely on the traditional newspaper, and most of us no longer do.

However, print pieces that are not based on immediacy will continue to have a place for some time. This part of the revenue stream should not be ignored. It is an area that is still profitable and will continue to license imagery from the upper echelon of photographers.

Meanwhile, the explosion of digital technology and devices is growing the stock photography industry by leaps and bounds. There is more imagery being used than ever before. Campaigns that used to require a handful of shots over the course of a year now require hundreds of pictures to satisfy the many platforms and media that make up the landscape. Yes, prices are lower for mobile usages vs. print usages. However, the volume is astounding and growing. This is the emerging market that strong shooters will be able to harness in their favor.

What can be done about decreasing stock revenues

Jim Pickerell has done a yeoman's job of calculating the total amount spent globally on stock images both now and over the next five years, and has attempted to show that it is a declining amount of great concern.  It is not that I disagree with these findings. Call me naïve, but I really do not care if the total amount spent on stock imagery will go up or down in the next five years.  Personally, I think it will either go up a bit or stay around the same, but it really does not matter.  Why? Because the amount already spent is huge, enough to support a very large number of shooters. Hence what I do care about is whether or not I will have a share of it.

Yes, there are more stock shooters now than ever before. Yes, new digital camera technologies have opened the floodgates to almost anyone who wants to take a photo. Yes, microstock has destroyed the old business model and furthered the cannibalization of traditional stock. Guess what — none of this is new.  It is a cycle that has been recurring over decades.

The stock image market is calculated in hundreds of millions, if not billions of dollars. From this glass-half-full prespective, the question becomes: How do you get your share?

In times of financial market booms, the adage goes that you could throw a dart at the stock pages and make money on the result. The same can be said for the boom times in stock photography.  In the 1970s and 1980s, all a photographer had to do was pick up a stock catalog and use it as a blueprint for producing more of the same. The emerging consumer market was outpacing stock production so much that it could support this form of cannibalization. Once supply caught up with demand, the market collapsed. Photographers who were only capable of imitative imagery suffered the most because their images did not originally have a solid foundation in a true understanding of customer needs. As a result, these photographers floundered about looking for the next big wave, which never came.

In contrast, photographers whose businesses were built on originality and creating images based on an understanding of the needs of the changing customer base were able to adapt. This is not to say they did not have a difficult patch during the changeover period. It is to say that they were able to make the change into the new business model because of the values they had created for themselves in the original business model. This may come as a surprise, but I do know of photographers whose RPIs have either remained steady or even risen during the current business recession. Needless to say, they are a special breed who endow their images with a unique style and full applicability to the current customer trends. I stand by this statement: There is always a demand for great, unique images that address customer needs. The job of a stock photographer is to supply them.

In tough economic times, the best policy is to increase production while attempting to decrease overhead. Most stock photographers did the latter, but — to their detriment — not the former.
When the recession hit in late 2008, many photographers asked me what to do. I said that the best policy would be to increase production while attempting to decrease overhead. Most stock photographers I know did the latter, but — to their detriment — not the former. Those who did keep up production or even managed to ramp it up are beginning to see signs of life coming back into their sales; they are now poised with the working capital to move to even higher ground as the economy improves. Photographers who did not create images during this downturn now find themselves with even less capital to invest.

In order to make your living through stock photography, you must be earning that living. Consistent, steady production is essential. With so many photographs flooding the market, the best way to maintain results is to shoot and submit regularly. We should not expect the kind of longevity for individual pictures that we experienced in the past. That means we must shoot more frequently.  

Pricing is a dynamic metric and we will likely see average prices for stock images rise, not fall, particularly for higher production quality. There will be a return to demand for quality. And new, more appropriate pricing structures will emerge as the image size will no longer be the most relevant way to determine price. There are many customers who want strong images and want to pay for them. Price is certainly not the only consideration for end users (it never has been and it never will be).

Impact of microstock and distribution innovations

Two marketing innovations came on the scene in the early 2000s: microstock and distribution networks. Both eased image flow through the system. Both would have an impact on traditional stock shooters. The initial impact of the former was largely negative in terms of price pressure and competition, while the impact of the latter was largely positive by opening vast channels to market and higher royalties.

Microstock needs no introduction. Often blamed for the demise of traditional stock pricing, it is in fact an obvious reaction to a market trend. Most microstock agencies will insist they did not steal sales from traditional stock agencies so much as open an emerging market that was not being serviced. The truth is somewhere in between. 

Micro agencies have evolved and had their own shakeout. Several of them have been swallowed up by larger, traditional agencies, and there are now only a handful of large micros. Smaller companies have either gone out of business or diminished to an inconsequential size. The concept of non-exclusive content has put a burden on promotional marketing of micro companies to increase market share. iStock owns the lion’s share of the market, is owned by Getty Images, and is trying desperately to differentiate itself with more exclusive content.

All the micro companies have one problem in common: how to raise prices. They are finding what royalty-free agencies realized in the 1990s: it is very easy to lower prices, but very difficult and time-consuming to raise them back up again.
All the micro companies have one problem in common: how to raise prices. They essentially shot themselves in the foot with the $1 an image promotion early in the game. Now they are finding what royalty-free agencies realized in the 1990s: it is very easy to lower prices, but very difficult and time-consuming to raise them back up again. In addition to slowly raising prices surreptitiously, some of the micro agencies have introduced a higher-priced-spread. Guess what? They found the customers who really need the higher priced images are willing to pay for it.  Surprise, surprise. My take on micros is that prices will continue to rise over the next five years.  This will be spurred on by a rising economy. 

Returning to the subject if shooter stratification, microstock represents primarily the dabblers and mid-range players. It is responsible for bringing a large group of new players into the mix.  Think of microstock as kind of minor league for training new talent, some of whom will eventually move into the top echelon of stock shooters.

The low price point of micro is its Achilles heel. Serious stock shooters require a large budget to finance high-value shoots. The returns from micro currently do not support this system. As a result, micro represents images that can only be produced cheaply. That works for the new, largely Web-based market that micro appeals to, but it does not work for more sophisticated clients who need — and are willing to pay for — the quality of a major shoot.  As a result, I think we will continue to see more micro forays into the traditional pricing arena, while at the same time holding onto the lower priced images for the new, more price-conscious market they have been serving.

Some traditional stock shooters have crossed over and now serve both traditional and micro markets.  I think we will see more of this where savvy photographers put the easy to do shoots in micro and save the high-cost, high-revving shoots for a more cost effective outlet.

A supply-side innovation of the distribution network is the second major change to the stock photography business over the past decade. Its emergence was largely a consequence of non-exclusive image uses that came about as a result of royalty-free marketing. The network also met the increasing image demands of larger agencies.

I left Comstock at a time when large economic entities were gobbling up existing photo agencies for their content. The idea was that Internet marketing of images was coming, and mass distribution of material was the way to go. What went unrealized at the time was that all the images attained through these acquisitions would be practically worthless within a few years.  

First off, they were all shot on film and had to be scanned to make them available on the Internet—an enormous task. By the time all the images could be scanned and made available, they would be largely obsolete: out of fashion and of inferior technical quality when compared with emerging technologies. The Internet had created a feeding-frenzy for images, one that scanning of film stock images could not supply in a timely fashion. The newly formed stock agencies were going to need a supply source commensurate with their own size. I realized that stock production and stock sales needed to be in synch in terms of scale, and that huge agencies selling images would no longer have the luxury of dealing with individual photographers.

By the late 1990s to 2000, older agencies were already making forays into distribution of their material into channels of the new agencies. What was needed was a new business model that did away with the high overhead of the selling side of the business and concentrated on pouring its talents into the production side of the equation. To that end we started Tetra Images, and shortly thereafter I became involved with others in the forming of Blend Images. Other networks arose within the same decade. I mention these two because I am most intimately involved with them and their results.

These new companies are in fact distribution networks and have matured to a point where they are marketing royalty-free images through all of the most important stock agencies throughout the world. The agencies they service benefit by having a steady, dependable supply of very high-quality images produced by many of the best stock photographers in the world, and art directed by an experienced staff of agency veterans who have vast industry knowledge.  The material is on target, fully edited, keyworded and ready to market immediately. Companies like Tetra and Blend benefited because without a massive sales arm they have reduced overhead, which can be passed along to the photographers in terms of higher royalty rates than typical royalty-free agencies.  Couple that with the expert guidance they provide, and we will see these distribution networks continuing to mature over the next five years as a premiere channel for higher-end royalty-free stock shooters. 

Assignment vs. stock

Stock photography is a fast, easy and cheap way to source images. It is a near-perfect solution in the current landscape, which is why there are more pictures being licensed than ever before. While there will always be a place for assignments, assignments will not dramatically cut into stock revenue. The time, effort and expense to do assignments will mostly limit that luxury to the higher-end products and marketing campaigns. The proliferation of shooters and images (even in niche subjects) will mean enough product to satisfy much of the market without having to specifically hire a production team for a custom-made photograph or bit of footage. Hiring amateurs to do assignments will satisfy the price point but will not yield the same results as using a professional. Again, top image creators will be in demand — be it for assignment or stock. Great images will be licensed.


Competition is keener than ever in almost every way. Now more than ever it is necessary to separate yourself from the pack. There always has been and will be a demand for truly unique and timely images that solve customer problems.
Competition is keener than ever in almost every way. Now more than ever it is necessary to separate yourself from the pack. There always has been and will be a demand for truly unique and timely images that solve customer problems. Provide the customer with an image they cannot acquire cheaply, and they will buy it. This has always been the hallmark of the most successful stock photographers. On a go-forward basis, it is more important than ever.  You might say it has become mandatory.  If you find yourself recreating images that can be found by the dozens on microsites, it may be time to rethink your career. 

Over the next five years, the economy will begin to correct itself.  Microstock will warp closer to traditional, and traditional agencies will borrow the ease-of-use aspect of microstock.  Even newer markets will open up while others fade away. Photographers need to reanalyze their role in this changing market.  One thing I can say for certain is that over the next five years, our industry will not remain the same as it was.  We are looking at a new business model and must adapt to it.  That has always been true, but is truer now than ever.  Keep in mind that we do not create images in a vacuum; we create them to satisfy changing customer demands. That part of the equation will not change. Put those images into the proper channels and success will follow.

Copyright © Tom Grill. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


  • Jonathan Ross Posted Nov 19, 2010
    Great read Tom,
    Thank you for even more insight than you have already shared over the years. Informative and inspiring as well. I may think it is so well written because I agree with everything you said but I do believe you are selling it straight as I ever get to read, that in itself is refreshing.
    Jonathan Ross

  • David Sanger Posted Nov 19, 2010
    Great analysis Tom. Among other insights it underscores the need for a sound capital base to fund stock production.

    In previous stories Jim Pickerell has estimated the RM market at around 1% of the market (by volume) and declining. Where do you see the RM market heading - steady, declining or rising - and what's the basis for your view (talking with buyers, editors, or just gut feel?_

  • Pat Hunt Posted Nov 19, 2010
    It's so nice to hear from Tom again. I've been waiting for him to pop up. I haven't responded to these postings before, because my articles are more focused on personality and business revues and less on analysis. However, this is the first analysis I can identify with in relation to Mark's and my efforts with the Huntstock image collection. We enjoy good high market share distribution and produce imagery that is unique with challenging access and high quality production. Therefore we experience good revenue return and price per image. I think that fits with everything you are saying. I am not disappointed in any aspect of the industry, and enjoy the challenge of technology changes. Thanks for your feedback.
    Pat Hunt - Huntstock, Inc.

  • John Block Posted Nov 19, 2010
    Wow. Tom, you've hit the nail on the head with delightful clarity and wisdom. THANK YOU for your lucid voice in the wilderness.

  • Bill Bachmann Posted Nov 20, 2010
    Tom.... so refreshing after so much "gloom & doom" from Jim. While I like Jim, he sees everything as B&W --- many of us are doing WELL in stock and are doing it right!

    ---- Thanks for sharing the thoughts altho Jim will probably rain on the parade in follow up!


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