6 Reasons For No Revenue Growth

Posted on 11/20/2014 by Jim Pickerell | Printable Version | Comments (2)

I am constantly challenged on why I think there is likely to be little or no revenue growth in the stock photo business. Many point out that clearly there is a huge explosion in the use of imagery online. Therefore, why won’t that be reflected in the growth of stock photo revenue? They also point to Shutterstock’s consistent 40% growth per year over for the last three years. Here are 6 reasons why industry revenue growth is and will continue to be in the very low single digits, until it finally turns negative.

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Copyright © 2014 Jim Pickerell. 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 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


  • Tom Zimberoff Posted Nov 22, 2014
    With all due respect, Jim, that’s a nonsensical business analysis.

    Why should prices for digital use remain only a small fraction of what's paid for print uses? Really, WHY? They may be so, right now; but the practice is qualitatively unsustainable FOR BUYERS precisely because it’s economically unsustainable for photographers. Do you really believe amateurs have killed professional photography?

    Because commercial buyers demand reliability and a known quotient for talent—yes, they really do—they still spend $6.5 billion each year hiring professionals to shoot pictures. That’s more than the entire stock photo segment (i.e., $4.5B).

    Think about what kinds of users typically can (or would) "grab and download anything they want without paying." They are RETAIL CONSUMERS, for the most part, looking for cheap pictures to fill up their Web sites. They are bloggers, freelancers, shopkeepers, and Web designers who work for them. They are not commercial buyers. They do not populate a business-to-business marketplace. They represent, instead, a consumer-to-consumer marketplace. That's a new marketplace altogether, a phenomenon. Nothing wrong with it. It can coexist with the the B2B marketplace, as long as they're not both crammed into one sales channel like they are today. The market for commercial buyers, today, is like trying to shop for haute couture at Walmart.

    You wrote, "When customers need an image to communicate an idea, there is an increasing use of illustration and proportionally less of photography.” Well, it's always been an empirical assertion that illustrators compete with photographers. Nothing new there. But, you have no data to back up your own categorical conclusion.

    “Finally,” you wrote, “. . . the price paid for stock photography has no relation whatsoever to the cost of production." Yes, that's been true. But technology exists today, Jim, that can capture dataflow between sellers and buyers; and it uses that kind of market intelligence to balance the economic playing field with economic sustainability for photographers and qualitative sustainability for publishers. It can amortize the production costs of stock photography utilizing an algorithm to reflect true market pricing based on—of all things!—usage—even if that usage is minimal and demands a cheap price. But let's not even get into the issue of exclusivity and how much that matters to buyers.

    Ideas like Uber, Airbnb, Priceline, eBay, Groupon, and even Apple’s iTunes all have one thing in common: PRICING INNOVATION. They were game changers because they changed the way markets source, price, distribute, and pay for goods and services. That’s what some company is going to come along and do for B2B photography. (Hint, hint.) There hasn’t been pricing innovation in photography since royalty-free met subscriptions many years ago. But that kind of "innovation" helps neither side of the creative marketplace stand out from the crowd(sourced). It only helps the distributors, not their customers.

    The reason for zero revenue growth is that Shutterstock is eating Getty’s market share. The two of them are cannibalizing stock photo sales, and racing each other to the bottom to do it. They swap revenue back and forth with each other like squeezing air in a balloon. They can’t raise prices because content quality is so poor; they can’t increase quality because their prices are too low to attract better content contributors. After all, even good amateur work gets lost in a sea of crowdsourced content. There are too many choices for buyers, and too few good ones. Technology will fix that.

    The tide will turn. It always does.

  • Todd Klassy Posted Nov 25, 2014
    Well said, Tom. And I sincerely believe the biggest reason there's no revenue growth is because photographers are relying on old business models and frankly they are not shaking the trees enough. My stock photography revenue is up year after year. Revenue per photo may be down, but revenue as a whole for me is up.

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