Drastic Royalty Cuts Change Photogs View Of 500px

Posted on 4/21/2016 by Jim Pickerell | Printable Version | Comments (0)

In 2014 500px introduced (500pxprime.com), a licensing arm of its global online photography community that was launched in 2009 for the purpose of sharing and discovering images. In 2014 they had about 4 million users and 50 million photos in the collection, but only a small percentage of these contributors were interested in licensing their work. Most seemed more interested in the social aspects of likes, views and followers rather than actually licensing.

To turn this social site into a revenue generator for those interested in licensing 500px launched 500px Prime. The licensing is Royalty Free. Initially, customers were asked to pay $50 for web use or $250 for print use. After negative reactions to the initial offer of a 30% royalty contributors were given a very generous 70% royalty share of each sale.

In 2015 the company added a higher ($750) price for images used in products for resale, introduced an additional collection called “Core” at a lower price point and renamed the whole licensing part of the business Marketplace. The “Core” collection is made up of imagery that is deemed of lower quality by the 500px editors and the “Prime” collection remains the premium collection. The pricing structure in August 2015 was:


    Prime -- $50 for web resolution, $250, print resolution, $750 products for resale
    Core -- $35 for web resolution, $150, print resolution, $300 products for resale
A month ago 500px announced that to grow the business they needed to cut the royalty from 70% to 30%. They plan to use the extra revenue to invest in improved technology and international expansion. Current prices and royalty rates are:

        Royalty for Royalty for
  CORE PRIME   Exclusives Non-Exclusives
Standard Licenses          
Web Ready $34 $49   60% 30%
Print Ready (under 500,000 copies) $149 $249   60% 30%
Extended Licenses Add-Ons          
Multi-Seat $99 $99   40% 30%
Unlimited Print/Digital $299 $299   40% 30%
Items for Resale $499 $499   40% 30%
Extended Legal Warranty $199 $199   N/A N/A

Many contributors are unhappy with the dramatic cut in royalties. Initially, they agreed to let 500px license use of their images because, at a 70% share of the gross sale, they would be receiving revenue comparable to what other photographer were receiving from traditional royalty free stock licensing. Many of these image producers would rather not license their images than devalue them by making them available at low prices. At 70% the amount they received for the use of an image was usually greater than what others selling through premium microstock brands like Offset or Stocksy United might receive.

Now payments for usage have dropped into the micrstock range. The drop isn’t so bad if the photographer goes exclusive, but that is a very risky proposition from an economic point of view. For customers the prices are still high compared to other options. Thus, it is unlikely there will be a huge jump in sales volume. While 500pix Marketplace has some great images, the collection is tiny compared to the industry leaders. It seems likely that most customers will continue to use better known sites with more variety and choice. Photographers are probably better advised to take what they can get at 30% from 500px and put the same images on other sites non-exclusively, than to expect exclusive sales from 500px to generate much revenue.

Other Changes Worth Noting

Today 500px announced they are expanding into the German market with marktplatz.500px.com. Now, German image users will be able to easily license 500px's global content, or work with 500px photographers directly, to create and source original images.

Kelly Thompson, former COO of iStock, is now heading Marketplace. He seems to be trying to introduce the iStock strategy of paying exclusive contributors more if they agree to not place their images with competitors. That worked when iStock was the industry leader, but now that iStock sales are steadily declining many of its most productive contributors are either pulling their images or have stopped adding new ones.

Last July Visual China Group (VCG) (the same company that recently purchased Corbis) was the leading investor in a 500px’s Series B round of funding. VCG’s future ambitions are unclear.

Copyright © 2015 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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