It does little good to blame someone else for how things have changed. We’re not going back to the old ways. The important thing is to figure out how to move forward.
As might be expected not all readers agree with my take on where the industry is headed. A month or so ago a reader wrote:
“When you write articles you must be impartial. The problem is you are very close to the Picture agencies that are destroying Photographer’s jobs. So its very difficult for you to be impartial.”
The reader referred to an article I wrote in June 2012 entitled,
“Race To The Bottom.” The article lead with the following statement: “Stock photographers regularly complain about the “Race To The Bottom” in terms of pricing and they look for someone to blame. Favorite whipping boys are Getty Images, Alamy and microstock. But, these distributors are not really the problem. The problem is technology.”
The reader quoted my lead and then went on to say:
“If I believed that it is just technology that has destroyed the Stock industry in the terms of pricing I would be still believing the World is flat and if you sail to far you will fall of the end. The whole 2012 article is a Fairy story the same sort of story you hear like if you lose a tooth put it under the bed and the fairy’s will collect it in the morning. The Blame lies squarely with the Agencies.
Getty did not have to chase RF when all its images were mainly RM. It did not have to buy Istock and say its better we cannibalize ourselves than somebody else do it. It did not have to compete with Shutterstock selling images as subscription microstock, it could have ignored microstock and sold pictures on quality. Instead most agencies including the ones you mention are competing on price which is a race to the bottom.
RM agencies prices are dropping year on year to try and compete with subscription microstock selling pictures for 25 cents a pop. How this all will end is obvious. One of the Agencies you mention will go bust in the next few years and others will follow if it does not turn itself into a microstock agency. In the mean time most RM agencies will go bust along with all their Photographers.
Let's take the example of a Wildlife Photographer he has a 3000 pound Camera and a 6000 pound lens and thousands invested in other equipment and computers. How can he spend hours or days in a bird hide to then sell that image for 25 cents and make a profit? Answer he can't. He can only make a profit selling images at 25 cents each if its a popular subject like a Polar Bear or Penguin. As 98% of most Wildlife subjects are not popular subjects he will never make a profit with those subjects. In the long term the whole pricing structure of Microstock is unsustainable for the Photographers and most agencies. The same scenario I mentioned about can be applied to lots of other subjects as well, no doubt we are in a race to the very bottom. Any other excuse is a fairy story.
(Slightly edited for clarity)
I responded:
We didn’t ask the economy to change, it just did. We didn’t ask the market to change, it just did. Adapt.
From your quote I think all you read was the brief abstract on Facebook of my 2,600 word Selling Stock article. In the full article I explained my thinking in greater detail.
No, Getty didn’t have to buy iStock. But, if they hadn’t it would just have made it easier for Shutterstock and iStockphoto to take over the market.
In 2005 just before Getty purchased iStock 43% of their gross revenue came from RM and 37% came from RF licensed at traditional RF prices. The percentage of RM being licensed had been declining for some time and the percentage of RF had been rising. (See
here.) The other 20% of revenue came from Editorial, Footage, Assignments and a few other lines of business.
Getty and other RM agencies didn’t have to drop their prices for RM and traditional RF. But, they tried to hold their prices for quite some time. All that got them was a significant decline in sales. Getty’s gross RM + RF revenue dropped from $589 million in 2005 to under $280 million in 2015. The only way they could hang onto any customers was to lower their prices. Had they stuck with 2005 prices, their revenue would be much lower today than the $280 million -- if they were still in business at all.
Getty tried selling based on quality and the customers said, “we’ll accept a little less quality for a lower price.” The customers easily found what they wanted from lower priced sources. Most buyers think RM photographers are greedy and charge too much for their images. That’s not my opinion, but buyers determine what sells.
The quality of the work of photographers selling their images through microstock agencies has continually gotten better. Those photographers were willing to accept the low prices for three reasons:
(1) they make a much higher volume of sales than any RM photographer has ever made,
(2) for years their income kept kept month by month for years, even though it was very low (for many it has not plateaued or declined in the last couple years) and
(3) they heard the stories of a few very smart microstock producers who made a lot of money. They believed if they just worked hard enough that could be them too.
Most would never earn enough to cover their costs, but more and more keep trying. (For most microstock producers income is flat, or declining now, but there are still hundreds of thousands of them producing.)
Getty didn’t have to offer RF, but most customers found RM negotiations too complicated and they started going to less restrictive sources. Over 99% of the images licensed in 2015 were RF.
Technology has made it easier for every amateur in the world to sell their pictures. Most of them don’t care how much their paid for their pictures. They are not trying to earn a profit for their time, effort and cost. They just want to receive something. As a result they take away a significant part of the market for professionally produced pictures.
Granted, most photographers selling at microstock prices won’t be able to sell enough to cover their costs. But, most are only looking at photography income as a supplement, not a full time living.
If all the existing traditional agencies were to go out of business there still wouldn’t be a significant market for images licensed as RM. That’s gone.
The solution for those trying to earn a living doing nothing but stock photography is not to go back to the way things were ten or fifteen years ago. Rather, they need to find some other way to make a living. Figuring out who to blame may make you feel better, but it won’t solve the problem. It’s just time to move on to something else.
You can’t get people to give up personal computers just to save the typewriter business and you can’t get amateurs to stop selling their pictures for peanuts via the Internet just to protect the businesses of a few photographers who want to shoot pictures on speculation and be paid enough for them to support themselves.
The reader replied:
Thanks for your reply. A lot of what you said made sense and agree with it, but I don't agree on your version of how things happened. Your explanation was a version of what happened but it was not the only version of what could have happened.
You said Getty didn't have to offer RF but most customers found the RM negotiations too complicated and they started going to sources that were less restrictive. I don't agree with this version, when every Agency was RM Getty promoted RF to gain market share and rammed RF down the customer’s throats. The customers would have been mad not to prefer RF. Buy an image and use it forever and for all uses.
This was the start of the race to the bottom from this there was an article called (How Stock Photography eat itself.) No lesson was learnt from this article and the race to the bottom continued.
You said no Getty didn't have to buy iStock, but if they didn't it would have made it easier for Istock and Shutterstock to take over the market. I disagree with this statement. It did not have to buy iStock this was the branch in the road which continued the race to the bottom.
You say Getty held its prices for sometime I disagree it started lowering them as soon as it brought iStock. As you said if it hadn't brought iStock it would have lost more money, this is true. But the alternative to not buying iStock would have been this version. Getty could have ignored microstock and sold pictures as high quality and left microstock as an amateur product. But by buying iStock it made iStock a professional product which at the time was supplied by mainly amateur photographers.
Guess we’ll have to agree to disagree.
For more about the editorial policy of Selling Stock and what we are trying to do with this newsletter see
here.