Developing a New Business Model - Part 1

Posted on 9/14/2007 by Jim Pickerell | Printable Version | Comments (2)

Still stock photography needs a new business model that combines the best features of each of the existing models - RM, RR, RF, Subscription and Microstock - into a system that enables all images to be easily licensed for any use, and each use price based on the value received by the customer. To accomplish this, many advocates of the current models will need to give up some long held beliefs.

To outline a new model means it is necessary to come to some general agreement on several of the industry's fundamental issues. Below I'll briefly outline a few key ones. Then in the next few days, I'll explore in more detail how each will impact the stock photo business in the future.

I encourage you to comment on any of these thoughts, particularly if you disagree.

Issue 1 - Amateurs - Technological advances have made it possible for amateurs to make their images available for commercial uses.

Issue 2 - Customer Growth - There has been an explosion of customers who want to use imagery, but the majority have very small budgets for photography. Sales to traditional stock photo customers have been sluggish for some time, and there are signs the needs of these customers will decline.

Issue 3 - Professional or Amateur - The fees paid for commercial use of a stock photo should be the same for an amateur or a professional.

Issue 4 - Reasonable Price - Commercial users have no right to expect to pay nothing for photos that provide them with significant economic benefit. In fact, most recognize that they should pay a "reasonable price" for the pictures they need. But reasonable is based on the intended use of the picture, not a specific fixed price, regardless of how the image will be used. Some customers can justify paying much more than others given usage.

Issue 5 - Determining Price - Basing price on the size of a digital file is extremely unfair to the customer, as well as the seller. File size has almost no relationship to how an image will eventually be used, or the value the customer will receive from its usage.

Issue 6 - Growth - The explosion of growth in content means the average return per image (RPI) will fall. However, it is no less expensive to produce images than it used to be.

Issue 7 - Sub-Pricing -The only reason for pricing something below the cost of production is a reasonable assurance that through multiple usage enough income will be generated to cover the cost of production and provide a profit.

Issue 8 - Simple System - Buyers want a simple, easy-to-use pricing system that allows them to use any image they can find at a price they can afford.

Issue 9 - Revenue - Is it all about the customer? Customers will always want more for less, but at some point, there has to be enough revenue for the producer to justify continued production.

After I've worked through the discussion on the above points, I'll outline a possible new business model that could make all images available for any use and still maintain simplicity.

Copyright © 2007 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, 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:  


  • Bill Brooks Posted Sep 14, 2007
    Issue 5 Determining Price: Take a picture in your back yard, or take a picture in Antarctica, and the price for RM use of each image is the same. This is not fair for either the customer or the photographer. Usage is impotant, but so are production expense and degree of difficulty. RM images should have a price level set for them based on difficulty, before the price is set for each usage. The FINAL PRICE equals PRICE LEVEL times USAGE PRICE. This does not mean higher prices across the board, just fair prices to all. There could be a price level of 1/2 for easy images, 1 for average images, 5 OR 10 for difficult images.

  • Don Farrall Posted Sep 15, 2007
    All good suggestions.

    Over the years a few stock producers have felt that there needs to be a method to price some stock based on the production value associated with it's creation. Some stock images, by the nature of their subject matter, are inexpensive to produce, though they may require a lot of skill to produce. Others may involve a greater level of production expense, lots of paid models, location fees, wardrobe, travel etc. The continued downward pressure on the value of stock images is going to make it impossible to produce these images. In a small way Getty was supporting this model with "collections" of images at various price points, but within the collections there still remains a vast gap between the cost of production of some images. In the assignment world these production factors play a part in the price of the image in addition to the usage. I am not sure how this would be implemented, but I think an attempt could be made that would provide some level of equity.

    Don Farrall

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