In a little over a month I will be moderating a panel discussion at the
DMLA 2017 Conference in New York on the subject
Prices: Can We Raise Them?
Stock photo prices have been declining for years, partially due to oversupply. Must prices continue to fall? Is there a strategy for charging more, to enough customers, that production of new images will become a viable business option for more producers? If so, how? What’s the strategy? If not, will that impact contributor supply? What alternatives are there for agencies to grow their business?”
Among the issues that will be discussed are:
1 – Is a two-tier pricing system a viable strategy?
Features
- Major databases would be segmented into two collections of images. The first collection would be of images that have been licensed at least once. The second collection would be of images that have never been licensed by the agency.
- Prices for images that have never been licensed would remain at existing price levels.
- Prices for images that have been licensed would be at a slightly higher price level price level. (Keep in mind that iStock has two-tiers and the prices for the higher tier are 2 to 3 times the3 prices for the lower tier.)
- Whenever a lower tier image is licensed it is automatically moved to the higher tier.
- All new images added to the collection begin in the lower tier.
- Images do not need to be exclusive to the agency to be included in the higher tier.
For more discussion see
this link.
Advantages For Customers
- Such a strategy change could improve search for customers willing to pay the slightly higher price for images that have been used. They would have a much smaller collection of premium images to review requiring less of their time.
- If the customer only wants to review images that have never been used the customer can search the never licensed collection. (If the images are non-exclusive then there would be no guarantee that the image hadn’t been licensed from a different collection.)
Possible Additional Modifications
- If an image had been licensed 10 or 20 times, or generated a certain level of revenue, it might be placed in an even higher additional price tier for future licenses.
- If an image has been in the collection for two years (maybe three or four) and never licensed it might be placed in a lower (Older Images) price tier that might be attractive to customers with extreme budget issues. This would be a way to try to generate some revenue from such images.
- One advantage to this option is that one or all of the four major database – Getty Images, Shutterstock, Adobe Stock or Alamy – could easily implement this strategy
For more discussion see these links
here and
here.
2 – Opportunities For Co-Ops
Is there a way develop a centralize search engine where small, specialized agencies could participate directly with the end using customer and thus eliminate the need for many of the distributor arrangements and distributor cuts? Prices could remain the same and both Prime agencies and creators would earn additional revenue.
Features
- Each agency would maintain its own image database.
- When new images are added to that database thumbnails and keywords would be automatically uploaded to the central searchable database through an API.
- Agency participants on the centralized database would agree to a unified pricing strategy for certain basic uses so customers could easily understand what usage fees might be for any image found regardless of which agency is supplying it. (Prices for certain large or extended uses might still need to be negotiated with the individual agency.)
- When a customer wants to license an image that file is automatically downloaded from the home agency’s website through an API. Thus, the central database does not have to store large files, but they are readily available when needed.
- DMLASearch provides some of these features, but instead of giving a list of collections with the number of images in each collection for a particular keyword search the customer would be immediately provided with thumbnails to review. It would be important to develop some system, agreed to by all the participating agencies, for supplying thumbnails in some type of random order so the agency with the most images in its collection doesn’t totally dominate the search returns.
Issues To Work Out
How to avoid showing duplicate images. How would each individual participating agency only supply images that no other participating agency in the collection has also supplied. For example, many of the images in most agency collections can also be found in the collections of other agencies who are acting as a distributor of the prime agency’s work.
For more on this idea check out
this story.
3 – Is a minimum floor price, for at least some images, possible?
If the two-tier pricing strategy outline above were to be implemented this would become a moot point.
When were talking about the difference between $2 and $5, or $5 and $10 or $10 and $20 is price difference really that big of a factor for most customers?
If we lose all the sales where the customer pays less than $2.00 per image download how much revenue will we really lose? Take for example Shutterstock’s price of $199 for the right to download 350 images in a month. Shutterstock’s total downloads indicate that on average customers only download about 25% of what they are allowed. That would work out to 88 images a month and the customer would actually be paying $2.26 per image downloaded.
If a floor price of $4.00 was set for the licensing of any image how much revenue would be lost by customers going to a different site to purchase cheaper images? Of the total revenue generated from the licensing of stock images how much is earned from customers who pay less than $4.00 for the images they purchase?
For more on this idea check out
this story.
4 – Do we really need to raise prices?
Given the host of new contributors adding more images to the collections every day, and seemingly willing to accept whatever money is offered for their use, is the industry able to supply the needs of all customers at current prices?
For more on this idea check out
this story.
The panelists who will be discussing these issues will be: Scott McKiernan,
Zuma Press, Tomas Speight,
Panther Media, T.J. Leonard,
VideoBlocks and José Azel,
Aurora Photos. But, I will also be looking for lots of audience participation. If you have thoughts on any of these issues, please feel free to comment to this article.
If you think Pricing is an issue, then you need attend this event, offer your input and determine for yourself it any change is likely.