Are RM Sellers Ignoring Microstock Buyers?

Posted on 1/23/2008 by Jim Pickerell | Printable Version | Comments (0)

In their drive to address the needs of the 3% of stock photography customers with the biggest budgets, RM sellers have ignored microstock buyers. They should be exploring new strategies, and viewing these buyers as an opportunity to expand their customer base and grow revenue.

The RM licensing model is better-suited than RF to identify various segments of the microstock community. Many who use microstock can't afford to pay traditional RM prices, but are willing to pay significantly more than microstock sellers are charging. All RM has to do is identify these groups and make top quality images available at reasonable prices, based on intended uses.

The goal for RM sellers should be to earn additional revenue from microstock customers so long as prices charged traditional customers are not lowered. This is possible. All sellers need do is carefully define certain categories of uses that qualify for low prices, identify customers in these categories and determine a proper price point for each use. In this way, they take advantage of the huge volume of low-priced uses without giving away anything on the high end.

Use All Images

To accomplish this goal, sellers must first recognize that they need to make all images in their collections available for small uses. Many RM sellers think the answer is to make older, poorer quality images available for lower-priced uses. Given the quality of imagery currently in microstock, this won't work. Such a strategy will generate some revenue, but on the whole will not be a satisfactory solution.

In the final analysis, portal operators and agents will make the decisions as to whether to institute such a strategy, and at what price points. Bu photographers will be the driving force that determines whether this strategy can be implemented.

Photographers have a choice. They can complain that their images should never be sold for less that certain amounts. If they do, most portal operators will not risk angering their suppliers. That locks everyone into a market segment where there is steadily declining demand. The other option for photographers is to encourage those who represent their work to explore new avenues for increasing revenue. Give them the freedom to sell into any segment of the market so long as the pricing structure does not make it possible for existing customers to purchase rights at significantly lower prices than currently paid. This is easily accomplished in the RM arena because there are different price points for each use type.

Hamstrung by file size pricing, RF and microstock sellers will find it extremely difficult to modify their model in a way that effectively competes. Fill sizes do not adequately separate users by type. Thus, no matter where RF sets its price points they will overprice for many customers and make the image available for far too little to many others.

Allowing photographers to set their own prices, as some agencies are starting to do, is not a satisfactory solution, either. It boosts photographer's egos, but setting a higher price will not necessarily result in higher revenue. Depending on usage, customers have different prices they can afford. Thus, setting any fixed price simply locks some buyers out of the market and makes the image available to others for less than they would be willing to pay.

Henry Scanlon, co-founder of Comstock, once said, "My goal in pricing is to determine a customer's budget, and then get all of it." You can't get more than the customer is willing to pay, but there is no good reason to take less.

When Getty purchased iStock it said that only 8% of their customers were also iStock customers. There are indications that number may have grown to 15%, but clearly a huge percentage of microstock customers have never purchased imagery from traditional sellers. There are two reasons for this.


  • Professional sellers never tried to reach out to these customers.

  • Professional prices were too expensive for many of the smaller uses these customers wanted.


The revenue these customers generated will be minimal, but addressing this market has other side benefits.

  • It limits microstock growth by taking market share from them.

  • It helps identify different segments of the microstock market, something microstock sellers are unable to do, given their file-size pricing strategy.

  • It helps RM grow its customer base.

  • It gives all customers access to professionally produced images.

  • It helps sellers determine the right price for each type of use without pricing any use beyond the customer's reach.


RF started out pricing all images equally, regardless of use or cost of production.

Sellers soon learned they could not earn enough in this manner to cover costs and produce better quality, so they started pricing by file size and eliminated certain types of uses. When the customer base stopped growing, they started raising prices. Some of their customers could no longer afford to pay the new higher price, but that did not concern the RF supplier if revenue grew. RF prices are now so high that many customers can't afford to use the images. This opened the door for the microstock model.

This strategy probably won't fulfill the needs of all microstock customers, but reaching a significant portion of those currently using microstock will be a win for traditional image sellers.


Copyright © 2008 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.  

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