The
CEPIC Congress in Barcelona June 10 – 14, 2013 will attract stock agents from around the world. Falling prices and the impact they are having on stock agencies and professional photographers will be one of the key issues discussed.??I posed a series of questions to a few industry leaders that will be in attendance. Earlier Alfonso Gutierrez, CEO of age fotostock shared his
observations and opinions. In this story I will examine responses from a few others.
One of the questions I asked was, “
Are you licensing more uses now than you were in 2007? Is the average price you’re getting per usage the same, more or less than in 2007?”
Somewhat surprisingly, most of those who responded indicated that they are licensing more images than they were 5 years ago. In my opinion this has not been happening in the industry overall. Those that have been able to license more images have done so by taking market share from competitors.
However, licensing more images doesn’t mean revenue growth. One agent with a specialist collection said, “Our prices haven't changed much to our dedicated buyers but prices received from our distributors get worse and worse.” It also seems that sales by channel partners are becoming a greater and greater share of the revenue of most companies. Since unit prices for these sales continually decline there is no overall increase in revenue.
This points to a problem for image creators. I asked, “
Even if your agency’s gross revenue is growing, are your individual contributors earning enough to justify continued image production?”
The general response is that photographer revenue is declining with “just a few” exceptions. An agent specializing in travel pointed out that “our travel photographers are making fewer trips due to the cost/return ratio.”
One agent answered, “I am afraid that is a question for the contributors.” But, really it is not.
If an agent needs content from professionals then the professionals must be able to earn enough from their efforts to support themselves. And that, obviously, is not happening. For the most part individual photographers are not benefiting from the increased volume of sales because that increased volume is being spread among a larger and larger group of individuals. A few individuals have been able to ramp up their volume enough to enable them to sell substantially more and earn almost as much as in the past, but that increased volume has also required increased expense.
If agents do not need a large flow of new material, or if they can sustain their businesses on the work of amateurs that are not overly concerned with profits, then declining prices are not necessarily a big concern. But, most of the traditional, non-microstock distributors are heavily dependent on photographers who are trying to earn a living from the images they produce. For these photographers the production of stock imagery is not only becoming unprofitable, but an activity that they can no longer afford to engage in from a professional point of view.
This leads to the next question, “
Is there anything that can be done to prevent usage fees from going lower and lower and still make a reasonable volume of sales?”
One agent said, “
Take images back from mega agents like Corbis, Getty, AGE, Alamy and Superstock,” and by implication concentrate on direct sales.
Unfortunately, this doesn’t seem a practical solution for most agencies. The vast majority of smaller agencies have become very dependent on distributor sales. They would not be able to ramp up direct sales quickly enough to offset the revenue loss from these distributors.
There are two aspects to this problem. First enough suppliers would have to pull out of the large discount distributors
at the same time to seriously degrade the quality of their offering. Otherwise most of the discounter’s customers will continue to use what’s left because they won’t know where to go to find a better quality alternative.
If a large number were to pull out they would need a central location where customers could be directed to find the images they need. That location would need the marketing resources to let all the potential customers know of the new place to look for quality images. No such alternative exists today.
There is an option that agencies and individual photographer should keep and eye on.
Offset by Shutterstock has regular contact with 750,000 customers and the financial resources to market this new site. This project is just coming off the drawing board, but if it develops along the lines presently outlined it should offer a high quality product and be the best chance photographers have of consistently getting reasonably high prices for their work.
The big question, given that discounters will continue to offer tons of low priced images, is will enough customers be willing to pay higher prices for top quality work to justify the expense of producing it. My guess -- although I hope I’m wrong -- is that the vast majority of customers have become satisfied with good, but not the best. Given that so much of the use will be online and mobile, not print there won’t be sufficient demand for higher priced images. But, Offset should test the theory.
Two comments may have summed up the problem.
One agent pointed out that unlike it used to be when agents established prices based on uniqueness and the difficulty of creating the work, now “the client imposes the price.” He added, “Photographers and agencies MUST set a minimum price that big agencies MUST respect despite all their bulk contracts and other tricks, like baksheesh to art directors. Exclusivity can be a key to keeping prices up. Microstock agencies will have to rise prices at least 50% + and maybe they will make more money as well. If all this happens at exactly the same time, probably we will all see some profit.”
Another agent said, “At the end of the day you accept fees offered by the client if you want to have a regular relationship with them.”
The discussions in Barcelona should be interesting. If you plan to stay in the stock photo business this may be a CEPIC Congress you won’t want to miss.