Distributor Sales Of Stock Images

Posted on 7/7/2016 by Jim Pickerell | Printable Version | Comments (0)

Recently, I asked about 100 medium sized stock agents around the world a series of questions to try to get an understanding of the revenue generated from images supplied to them by other stock agencies as opposed to revenue from images the agent had collected directly from image creators.

I did not contact Getty Images, Alamy or any of the microstock agencies so their activities do not affect the results. I also tried to focus on agencies with an emphasis on commercial sales rather than editorial.

I got about a 13% response rate. Respondents ranged from “production companies” that simply farm out their images to distributors and make almost no direct sales to customers to companies that earn almost 100% of their revenue from direct sales to customers.

Given the relatively low response this survey may not be representative, but the averages are worth considering. The questions were as follows:

1 – In 2015 what percentage of your company’s total stock image licensing revenue came from direct sales to customers?

Overall average 60%

2 - In 2015 what percentage of your company’s total stock image licensing revenue came from image distributors that represent your work?

Overall average 40%

The answers to these two questions are important for photographers to consider. In cases where a distributor deals directly with the customer the distributor normally retains around 40% of the gross fee paid by the customer if the image is RM and as high as 80% if the image is RF. The balance is paid to the prime agent who supplied the image. The image creator’s royalty share is calculated based on what his prime agent receives, not the gross sale price paid by the end user of the image.

Thus, if a distributor cuts are involved on 40% of all sales, the photographer’s royalty can be significantly less than if all the sales are made directly to customers by the agent the photographer has chosen to represent his work. Of course, the advantage of dealing with many distributors, is that they may be in contact with many more customers and generate a much higher volume of sales.

Suppose a photographer’s royalty rate is 35%. A distributor licenses an image to a customer for $100. The distributor retains 40% and pays 60% (or $60) of the revenue received from the customer to the photographer’s prime agent. The photographer receives $21. With RF the distributor may retain 60% or more and pay $40 of the $100 sale to the photographer’s prime agent. If the photographer’s royalty rate is 20% then the photographer will receive $8 of that $100 sale.

Typically, the distributor’s cut is not disclosed to the image creator.

3 – Is your revenue from distribution agreements increasing of decreasing as a portion of your total revenue?

About 50% said the revenue they are receiving from distributor sales is declining. The remainder said distributor revenue was either level or increasing.

4 – What percentage of your sales revenue comes from images that have been provided to your company by other agents?


5 – What percentage of your sales revenue comes from images your company has produced itself, or acquired directly from the image creator?


6 – Was your 2015 revenue from the licensing of stock images?
    A - Less than $1,000,000              
    B - Between $1,000,000 and $5,000,000       
    C - Between $5,000,000 and $15,000,000       
    D - Greater than $15,000,000

Of the people who answered this question 10% had gross annual revenue of less than $1 million, 60% had revenue between $1,000,000 and $5,000,000 and revenue for the other 30% was greater then $5 million but less than $15 million.

Copyright © 2016 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 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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