Exclusive Use: Flawed Model

Posted on 9/7/2007 by Jim Pickerell | Printable Version | Comments (2)

The drive by photographers and distributors to license RM stock images for exclusive use could be the undoing of many photographers.

The theory behind RM is that license fees should be based on how the image is used, and the economic benefit the customer receives from such usage. That’s fine, but there is a common misconception that RM also implies exclusive use, despite the fact that there is no exclusivity attached to well over 95% of RM licenses. The effort necessary to make every RM image available exclusively is probably costing most photographers money.

Exclusive Use Flaw

RM image sellers focus on exclusives because customers making big uses often (but not always) need to prevent competitors from using the same image. Normally sellers get big fees for big uses. Everybody wants big fees. Therefore it is important to be able to offer customers exclusive rights.

It then follows, from a practical point of view, that most agents want exclusive rights to the images they represent so they can guarantee that any image a customer buys will not be made available to the customer’s competitor. This raises several issues.

1 – If an agent or portal represents an image exclusively, that severely limits the universe of potential customers who can see the work compared to marketing the same image through several different portals. Even if the exclusive representative has the broad reach of a Getty Images, many customers continue to use many other portals to find the images they need -- and the photographer’s images are not available to those customers.

2 – Photographers tend to focus on getting big sales and disregard the possible benefit of the revenue that might be generated from a greater volume of lower-priced sales that might be realized by making the images available through multiple outlets.

3 – There is the argument that if the same image is available on many portals customers will shop for price. However, there is little evidence this happens unless the price differentials are dramatic. If the price is reasonable for the planned use the customer will buy it and move on.

Better Strategy

If Getty Images were to license all its RM images using an iStock pricing structure based on file size delivered, there would certainly be a dramatic decrease in overall revenue generated. A better strategy would be to offer RM images at $2 each for personal use, personal Web sites, powerpoint presentations and in-school educational use, and maintain their current pricing structure for commercial uses. This would probably result in increased revenue. The key is a system that prevents existing commercial customers from getting images at prices much lower than they can afford to pay, not in refusing to sell at low prices. This makes good images available for very small uses, without giving away the farm for traditional uses.

Other Things To Think About

1 – It is possible to license exclusive uses for images normally offered as non-exclusive.
A customer interested in paying for an exclusive is usually only worried about how his or her competitors might have used the image in the past. If a competitor used the image, the new customer is unlikely to buy it.

What the customer really wants is to prevent competitors from using the image in the future. This can be accomplished by simply removing the particular image from wherever it is being offered.

2 – There are many examples of images being licensed for commercial use for many thousands of dollars where exclusive rights were not required.

3 – Before insisting on licensing images as RM, photographers should look at their sales history and determine the portion of revenue generated by sales larger than $4,000. (No customer should expect an exclusive for a fee less than this.) When large sales represent a very small percentage of total revenue (as will generally be the case) photographers should recognize that they might earn more by making images more widely available on a non-exclusive basis.

4 – Most agents who offer RM images also offer RF -- so they do not have exclusive rights to ALL the images they represent.

5 – These arguments may not hold true for editorial images of high-demand subject matter where the photographer has the only image available. The news media often pays very high fees to be the first and only organization in their market to publish a picture. A few photographers (paparazzi) make very significant money selling such images on a regular basis. However, most photographers should not base their business on this strategy.

Considering the above arguments, most photographers should focus on making their images available on a non-exclusive basis in all possible markets and stop worrying about exclusive sales. However, for the moment, it is impossible to find a seller with a realistic strategy for addressing both ends of the market.

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 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.  


  • Stephen Marks Posted Sep 10, 2007
    Great insight and argument Jim. Is there a forum where the Getty, Corbis and Jupiter guys can put in their 2 cents worth?

  • John r. Green Posted Sep 10, 2007
    Jim - I'm unclear if this is an argument for posting more RF or if there is a 'hybrid' of non-exclusive RM that I'm overlooking.

    On a related note, I've noticed more and more situations where photographers and agents are apparently offering essentially the same RM images through multiple portals and subagents. It looks as if some may be trying to achieve what you are suggesting. This of course raises the question of how can rights be effectively managed under such a scenario -- it looks to be RF masquerading as RM...

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