In addition to the major industry trends, regular examination of smaller-scope developments related to common business issues—such as demand for images, cost of production, legal changes and technological advancements—is helpful in determining if and when to adjust stock production strategy in order to keep it profitable. But beware. As you track these developments, it is entirely possible you may decide to place less emphasis on stock production and more on something else.
1. Growth in demand
Among the issues on which industry professionals hold widely differing opinions is whether or not there will be further growth in demand for images. It seems clear from figures we have been able to collect from Getty Images, Alamy and others who sell to traditional customers that there has been little, if any, growth in demand in this area of the market over the past few years. We estimate that in 2008, Getty Images licensed rights to between 1.5 and 2 million images and those numbers, while relatively stable for a number of years, may be beginning to decline.
However, there has been big growth in demand from small businesses and consumers. In 2005, 2006 and 2007, iStockphoto licensed rights to an estimated 4 million, 10 million and 17.55 million images, respectively. In 2008, iStock licensed rights to approximately 25 million downloads. The same year’s sales of all the other microstock companies combined were likely about equal to iStock’s. However, there are some indications that iStock sales have reached a plateau.
What can we conclude from all this? Traditional customers do not seem to have any growth potential. Growth in demand at low prices might have reached its natural level. Still, many in the microstock industry think the growth will go on forever; they cite the continued growth in Web sites and believe site owners will want more and more pictures.
2. State of the economy
The economy will eventually get better and probably result in higher demand for photos. However, neither the volume of traditional sales nor prices are likely to ever return to 2007 levels. Factors insular to the stock industry will have much greater effects on future trends than any changes the economy will bring about. Many photographers’ expectations for economic recovery are unrealistic.
3. Copyright
The Internet has made it very easy for image users to steal what they need. This is particularly true for consumers, and to some extent small businesses that have budgetary constraints. These users have little understanding or appreciation of the copyright laws, combined with a belief that the likelihood of being caught and punished is very slim. Stronger copyright laws might help, but the trend seems to be toward weakening these laws rather than strengthening them.
4. Useful life of images
With more and more images illustrating every conceivable concept now available, and new ones being created every day, it seems likely that the useful life of any given image will become shorter and shorter. In theory, if the subject matter happens to be something that few people shoot (unique), and something certain customers might need to use years in the future, the images may have a longer useful life.
In practice, last month, 15 of my images—of many different and unrelated subjects and all created more than 20 years ago—were licensed for various unrelated uses. Other photographers have hundreds of more recent images of very similar subjects available in files around the world, and yet mine were chosen.
In sum, there is no way to accurately anticipate which specific images future customers will want to use. However, it is possible, in general terms, to estimate the earning potential of a collection of images, once that collection has some track record.
5. Search-return order
Search-return order is an important issue over which photographers have no control. If an image is within the first 100 to appear when a customer searches for a particular keyword, it has a much better chance of selling than if it is the thousandth, regardless of how technically appropriate it might be for the customer’s planned use.
If the image is at the 10,000th spot, it has almost no chance of selling, no matter how great it is. Technological advances may result in changes in how images are slotted in the search-return order, but such advances will not necessarily benefit all photographers and could actually make things worse for some.
6. Cost of production
It seems likely that cost of production will increase. Equipment costs may decline, but they are only a minor share of the total costs of productions. There are costs for models, sets and getting to locations that must be considered; the pre-production planning and the post-production work on the computer should also be factored in. The photographer may be required to do more in preparing images for distribution. Photographers who expect to profit in any way from producing stock images must constantly look for ways to cut costs without sacrificing quality.