Recently, in a discussion with a stock photo agent the subject came up as to what it would take for Getty Images to repair its relationships with the Creator Community. I raised the issue late last year in “
Why Creators Are Dissatisfied With Getty.”
My friend felt that “the main impediment to improvement at Getty is a consolidated unified competitive computer system.” I think the problem goes much deeper than that. Here are a few issues that I think need to be addressed.
Impediments To Success
1 - One critical flaw in the Getty business is that they are too focused on getting more consumers to look at their images, regardless of what it costs, rather than establishing minimum realistic prices for the images they are licensing. Getty actually seems proud that 97% of the people who visit their site are just browsing and never purchase anything.
2 – They have got to find a way to raise prices. I just examined the 2018 sales of one of their major image producers. Less than half of 1% of this photographer’s sales were for gross prices over $1,000 with the average gross license fee for these over $1,000 sales being about $2,500. However, the average gross license fee of all this photographer’s sales, including the handful of big ones, was less than $29.00. The photographer gets 30% of that (under $9.00). 63% of the sales were for prices under $10.00. One-third of the sales were for prices under $5.00. No photographer can cover the cost of new production for prices like these.
Back in 2006 Getty had about 1.7 million images in its Creative collection. In that year they licensed almost one use for every image in the collection. (Many images sold multiple times in the year so a significant number of images did not sell.) The average 2006 license fee for an RM image was $536 and $242 for an RF image.
Now, it is $29, or less than 7% of the overall 2006 average.
Last year I did an
analysis of 2016 sales of several major Getty contributors. In that analysis the average price per image licensed came out to between
$50 and $60. It is possible that due to the small sample the sales of the photographers in either analysis are not representative, but given who the photographers are, I suspect that if anything their average earnings are higher, not lower, than the overall average.
Getty earns approximately $280 million annually from its Creative Collection. If the average license fee of an image is $55 Getty would have licensed use to about 5 million images. If the average license fee is $29 Getty would license about 9.5 million in 2018. While the number of images licensed may have grown dramatically total revenue has not grown due to an increasing number of sales at lower prices.
Fifty-six percent of the sales were licensed through
Premium Access deals at an average gross license fee of $11.20. While some photographers get a 30% royalty of this gross license fee others get 20% ($2.24) or less. And, if the image happens to be one supplied by another stock agency (roughly 50% of total images in Getty’s Creative collection) the photographer may not receive much more than $1.00 for a Premium Access sale. In many cases the royalty will be much lower than that.
In 2006 Getty had almost one license for every image in its Creative collection. Now, in 2018, they have about 27,526,700 images in their Creative collection. If there were a total of 9.5 million licensed, then the average photographer earns about 1 royalty fee annually for every 3 images in the collection. If there were only 5 million licenses the photographer earns approximately 1 royalty fee annually for every 5.5 images in the collection.
3 – Getty does a very poor job of advising photographers on what to shoot or help creators understand what is selling and what isn't. See these stories
here and
here.
If they aren’t going to raise prices, then at the very least they must give photographers solid information about what is selling so photographers don’t waste their time producing images that no one seems to want to buy.
Currently there are 16 times as many image in the Creative Collection as there were in 2006. But, the gross revenue generated by the Creative Collection is just over half of what it was in 2006. They are adding more and more images no one wants to buy because photographer have very poor information about what is selling.
4 - They have dramatically reduced their editing staff and are adding way too many images that no customer wants to buy.
5 - At
Photo Expo in New York in 1998 Jonathan Klein said, “The stock business that does not care deeply about customers and does not drive quality and creativity will not survive the next five years, let alone the next century.”
“Caring For Customers” isn’t just offering lower prices, it is also about making it easier for the customers to find what they need quickly. As Getty loads up its collection with images no ones wants to buy they are making it harder for customers to find something they can use.
As they lower prices they are also chasing away photographers with track records of being able to produce the kind of images customers have purchased in the past. These photographers can no longer earn a reasonable return on their investment when producing new images. They have cut their costs to the bone, but still can't turn a profit so most have quit producing new images and gone off to do other things. Now, Today, Getty gets most of its images from amateurs who photograph things they like, but for the most part the subject matter doesn’t seem to be what customers want to buy. (See
EyeEm - 18% of the collection).
6 – Getty has a better pricing model at iStock.com than they do at Gettyimages.com. They have segmented their iStock collection and charge 3 times times the price for some images as they do for others. The higher priced images are Exclusive to iStock and the lower priced ones are Non-Exclusive. As it turns out there are about 6 times as many non-exclusive images as exclusive, but annually iStock licenses about the same number of uses from the exclusive collection as from the much larger non-exclusive one.
There are customers who are willing to pay more for images as long as the price is still reasonable and it is easier to find what they need because the collection is smaller and better edited.
Rather than
Exclusive and Non-Exclusive Gettyimages could use the same strategy with images that have been previously
Licensed or Unlicensed, but they don’t seem to be able to figure that out.