46
Future of Clip Photos
November 13, 1996
Clip photo discs have been available for more than four years. The titles
being released are increasing dramatically. The image quality is getting better
and better. More and more photographers are willing to supply images for these
products.
Recently, many photographers on the Internet have been clamoring for a new
"Stop Clip" movement. In my opinion there is no way it can be stopped. Clip
has established a position in the industry and it is here to stay. But, it is
time to re-examine some of the issues surrounding clip.
History
According to my calculations, in 1996 gross sales of clip photo discs will be
somewhere in the range of $125 million. That's close to 15% of the worldwide
sales of stock photography. Of the clip discs available, a very high percentage
of them are being used in the U.S. causing a greater impact on the U.S. market
than in other parts of the world.
In the last two years there has been a slight increase in worldwide sales of
stock sold in the traditional manner. The sale of clip photo discs has been the
major growth area for stock photography. Expect this growth to continue.
I still believe the best way for photographers to maximize their earnings is to
place as many images as they can in traditional stock photo print catalogs --
particularly those distributed by the major agencies. The profit potential is
generally greater in licensing usage rights rather than selling images outright
to clip photo producers, or in collecting royalties on the sale of clip photo
discs.
Nevertheless, there are a number of factors that make producing clip
photography very appealing for certain photographers.
Can Photographers Make Any Money In Clip?
Some West Stock photographers who first put their images on clip-photo discs
four years ago, and are paid a small percent of the gross sale price of each
disc, are earning annual royalties in the range of $200 to $300 per image.
Those sales have continued steadily at about this same level ever since the
discs were released and in spite of the fact that many new clip photo titles
keep coming on the market.These photographers also report that their traditional
sales from West Stock, as well as other agencies they are with, are still
increasing. Thus, the income from the clip discs is "additional money."
(If there is anyone who has supplied images to a clip-photo product and is
having a different experience I would love to hear from them.)
One of my initial concerns, and a concern of many in the industry, when these
products came on the market was that clients who used to pay $200 to $400 for
one-time usage would now be able to buy all rights to hundreds of images for
$250. We believed this would result in the loss of traditional sales.
Certainly, many photographers can point to instances where their clients have
used clip photos on projects. In many of these cases, the clients would have
used traditional stock and paid much higher rates if the clip photos had not
been available.
But, those participating on the clip-discs report that even though they lose
some sales because their images are on clip discs their overall sales are
increasing. In addition, there are occasional situations where the client finds
an image on a clip disc, but needs a larger file, and goes to the photographer's
agency to get the film at traditional rates.
Assignment Photographers
The other photographers who are making money in clip photography are assignment
photographers, many of whom, we suspect, have never sold stock photos in any
other way.
PhotoDisc, in Seattle, has been hiring photographers at a rate of $3000 per
day, plus expenses, for an all rights buy-out of a day's production. PhotoDisc
plans the shoots and takes care of many aspects of the production. In the
beginning, PhotoDisc paid royalties on a per image, per disc sold basis. Now
their strategy is to try to own outright as much of their content as possible.
The photographers doing these assignments regularly shoot corporate and annual
report assignments at $1500 per day with a buy-out rate of double their normal
day rate. They look at a $3000 PhotoDisc assignment as a good deal.There are a
couple factors that I don't think these photographers take into account when
they price their time in this manner. First, their corporate clients are
allowed to make maximum use of the images for their own company, but usually
they are not allowed to, or won't, sell those images to other companies.
Consequently, even though it is a buy-out there are some practical limitations
as to how much use is likely to be made of the images by the corporate
clients.Secondly, often on annual report shoots, where the photographer is
getting double the day rate, most of the images are specific to the corporation
and not "generic" subject matter that is easily transferred to many other users.
If the photographers shooting clip were really getting all that these generic
images are worth, they should be paid a lot more than $3000 per day.
Nevertheless, a day rate of $3000 is very tempting for many photographers. At
this rate, I predict PhotoDisc, or any other clip photo producer, will have no
trouble finding all the photographers they need to produce their images. We
should also compare this rate with the salaries received by the in-house staff
photographers of some stock agencies.
Restructuring Clip
Some have recommend that photographers should now stand together and agree to
limit the resolution of images that go on clip discs in an effort to somehow
limit the quality of the imagery that is submitted for these products. Such
proposals are ridiculous! If such ideas were ever possible, and I doubt they
were, they are four years too late.
Negotiations might have been possible before the clip producers had a track
record. Now that they have results there is nothing that will stop them from
pursuing their business model.
As outlined above, clip photo products are producing good incomes for many
photographers. While no where near as high as top level stock producers are
earning, they are very attractive for mid-level producers who have trouble
getting represented by one of the major stock agencies.
Licensing Rights In The Traditional Manner
Yes, photographers can make a lot of money from their images if they can get
them in the catalog of a major stock agency with major distribution.
But for many photographers this is impossible. Today, it is difficult to get
accepted by a major agency. Even those who do often can't get many of their
good images into the agency's catalog due to the heavy competition for the
space.
There are some excellent photographers whose image quality is just below, if
not equal to, the level of the major agency producers. To break into the top
echelon they must produce a huge amount of work on speculation. If, after all
this effort and expense, they are not accepted by a major agency, what do they
do with this production? How do they get it seen? How do they get a return on
their investment?
Some can go into smaller agencies and smaller catalogs and still do better then
they will with clip. But, at some point the argument that you will always make
more money selling on a per use basis will not hold up, based on the evidence we
have as to what is possible with agency sales, and clip-photo sales. For some
photographers, getting a royalty on each clip disc sold, or taking a $3,000 a
day assignment will make more economic sense.
Professional Responsibilities
Some established stock photographers say that those trying to break into the
market should do nothing to undercut traditional pricing, and traditional
marketing methods. To act in this way, they argue, is
non-professional.According to my dictionary the definition of a professional is:
someone highly skilled doing a certain kind of work as a full-time occupation or
to make a living.
I would remind established stock photographers that back in the early '80s
assignment photographers were yelling at us to stop shooting on speculation as
that would kill the assignment photography business. Of course we stock
photographers didn't listen. We knew that producing the right kind of subject
matter on speculation could pay off handsomely. And besides, many of us were
also having trouble generating enough assignment work to make a living.
The actions by stock photographers at that time, and the growth of the stock
photo industry, probably did some long term damage to the assignment business.
I would encourage established stock shooters not to be too quick to criticize
those who are simply trying to earn a living the best way they know how in a
changing marketing environment.
Buyers Point Of View
There are many undeniable benefits of clip discs for buyers. Rather than
trying to convince them not to use such discs we need understand the buyers
perspective and concentrate on providing better service in those areas where
licensing rights, rather than using clip discs, is an advantage for the buyer
- Quality. When clip discs first came out the quality of most images was much
lower than the image quality in print catalogs. That is no longer true.
Publishers such as Photo Disc in Seattle and Digital Stock Corporation in Solana
Beach, CA now have many images that are equal in quality to those found in stock
agency catalogs. Art directors know the quality of many clip images is
perfectly satisfactory for their needs. If you try to argue to Art Directors
that clip is of lower quality you will simply demonstrate your ignorance rather
than convincing anyone to stop using clip.
- Low Budget Projects. There is a big demand for pictures to be used 1/4 page
in small circulation brochures For many of these projects a generic clip-photo
is more than sufficient for their purpose.
On the other hand, there are two costs involved in acquiring images for low
budget projects: the price paid for the image, and the time it takes to find it.
Art Directors working on low budget products don't have a lot of time to waste.
They need to find a simple cliche image quickly and simply so they can move on
to the next project.
- Buyer Does The Searching. One disadvantage of clip (and to a certain extent
all catalogs) is that the art director is required to do his or her own search
rather than having a stock agency researcher or photographer narrow the
selection for them. On the other hand, art directors, particularly those buying
for advertising and brochures, seem willing to do some search. Currently, they
choose a huge percentage of the images they use from print catalogs. But, the
simpler this search process the more likely art directors will do it rather than
turning the task back to agency researchers.
Many clip discs are very poorly organized. It is hard to find images that meet
specific criteria without looking at every image on the disc. Some clip discs
have search engines that enable the art director to use keyword search. Others
come with small thumbnail print catalogs of each image.
At present major stock agency print catalogs that are organized by subject
categories probably have the advantage over the clip discs. However, CD-ROM
discs have the potential of being easier to search and many CD-ROM clip
producers are making their discs more and more user friendly. The print catalog
producers may have an advantage now, but it is not lilkely to last long.
- Agency Picture Research. Some Art Directors still want picture researchers
to do some of the search work for them. This is more true for editorial than
for advertising and brochure uses.
When we started Stock Connection it was based on the theory that clients using
catalogs select the image they want before they make the first contact with the
agency. We expected, based on previous experience, that clients would not call
until thery were ready to negotiate a price. As our volume increases we are
discovering that about 20% of the time the client wants to see other images, as
well. Some will use the catalog simply to determine if the agency has images
similar to what they need, and then want the agency's researchers to pull
together a small, focused selection for their consideration.
Large agencies with giant files may get many more requests like this than we
do. But it is also interesting to see how many times clients end up choosing
the image the agency had selected for the catalog in the first place.
- Restricted Rights and Model Releases. With clip photography, a client can
never be sure that their competitors have not, or will not be allowed to, use a
particular image. When they want this kind of assurance they must go to sellers
who can offer rights control. Unfortunately, situations where clients want to
limit use in this way don't come up that often -- certainly not often enough to
sustain a business that would try to only license exclusive rights.
At the PACA seminar some indicated that agencies need to distinguish themselves
by offering specific rights and assurances. But, it was also pointed out by
Stephen Harvey Franklin of Visual Communications (London), that currently many
agencies don't have good rights control across international borders.
More frequently, clients want to be sure the image is properly model and
property released for the usage they have planned. Again, the traditional
system has a better chance of satisfying this need, but the clip producers could
make releases available if it becomes an important factor in marketing their
product.
Art Director Pocketing the Profits from Clip
Some have suggested that art directors are doing something wrong if they buy
clip photos at low rates and then charge their clients traditional prices to use
the images. I believe art directors are entitled to a markup if they front
money to purchase rights to images (buy the clip disc) for which they have no
planned use at the time.
Moreover, it may be to our advantage that they keep the prices their clients
pay to use images as high as possible. Next year's budget tends to be based on
last year's costs. If an art director finds an image on a clip disc that works
for a particular project and then charges the client very little for its use he
may find that next year the budget for photography is so low that there is no
other choice but to use clip.
PACA Seminar
Clip photos affect the lower end sales a lot more than high end. Some stock
agencies at Viscomm indicated that they are losing low end sales to clip, but
argued it had been costing them more than the sales justified to service most of
these accounts so they didn't seem to feel it was a big loss.
However, this may be bad news for the agencies that have focused on the lower
end of the market.
Some agencies argue that clip photos are unlikely to make serious inroads into
editorial publishing. Most magazine editors are looking for something unique
and they can usually get it without paying much money so they don't think they
will bother with clip photography.
Low end advertising is something else again. These people are looking for
something that will catch the readers eye and draw the reader into their copy.
They don't care if someone else uses the picture as long as it works for them.
Rich Dunoff
Recently, Rich Dunoff reported the following on one of the internet newsgroups.
"The other day I was contacted by a new buyer of photography. When the clip CD
thing started they bought a couple CD's and used them for a few very small
projects.
"They were designing a new brochure with pictures they had gotten from a clip
CD. They were unhappy with one of the images they had selected and contacted me
to see some alternatives (prior to this they had never bought photography except
for the CD's which they got for $15 each). I showed them similar ideas as the
ones they had seen on the CD and they decided to replace all four of the
pictures in the brochure with my work.
"The significance is that the clip CD's are helping to enlarge the marketplace.
Clients who had never used stock or original photography are finding the need
to compete and are becoming photo buyers.
"To all of you trying to fight the manufacturers and publishers of these stock
photo CD's, why don't you take the time and energy to improve your work. It
will be more satisfying and profitable to you than organizing a letter writing
and petition program."
My Recommendations
When I write stories like this I always get two questions: (1) "What are you
doing?" and (2) "What do you recommend that other photographers do?"
- Let me make it clear. Personally, I am not putting any of my images on
clip-photo discs because I still believe I can make more money from the images
by licensing them in the traditional manner.
- I do not have a general recommendation that will apply to every
photographer. Each person is going to have to look at how the market is
changing and relate that to his or her own position in the marketing chain.
Many will never want to consider clip, but it may work for some. Each
photographer is going to have to look at the facts and make his or her own
decision.