For photographers, there are three ways to showcase photos. The first is setting up a searchable site. This can be costly and only work well if the photographer has a broad niche image collection and a solid customer base. It helps to be recognized in a niche category.
Before deciding to build your own site, take a hard look at what Gettyimages.com, Corbis.com, Jupiterimages.com and Alamy.com offer in your niche. If your imagery isn't a quantum leap better than theirs and you're not a recognized industry leader, don't expect much from your personal site.
To solve the technology barrier of building a custom site, take a look at: digitalrailroad.net, ipnstock.com and photoshelter.com.
Traditional Agency and Microstock
The other ways are traditional stock agencies and/or microstock. At first glance, it appears that photographers will earn much more by dealing with traditional agents because they charge much higher fees and usually pay a higher percentage of the use fee than microstock distributors.
However, sales volume and the real percentage of gross fee charged needs to be taken into account. With regard to sales volume, in 2007 iStockphoto licensed rights to 35 times the number of images that Getty Images licensed as RM and 18 time the RF images. In 2007, RM images at Getty licensed for an average fee of approximately $500, while the average for an iStock license was $4.10. Big separation, but when you factor in the 35 times, one $500 fee at Getty is equivalent to $145.50 at iStock. Getty photographers get 35% of the gross fee on average; iStock exclusive photographers get 40%. iStock's non-exclusive photographers get 20%.
Taking Alamy as another example, in 2007 the company licensed rights to about 169,000 images or one license out of every 64 images in file at year end. Average price for an editorial usage was about $133 (75% of sales), and average price for commercial was $370 (25% of sales). Alamy pays photographers 65% of fees collected. The numbers are now getting closer to one another.
More important than royalty percentage or unit price may be the number of sales you can make, compared to the number of images you have and the cost to produce those images.
Getting Images In Play
It still sounds like the best deal is getting your image accepted by a traditional agent, but it is getting much harder to do so. Also, I need to define "agent" and "distributor." Agents takes images from photographers, may make some sales directly to customers. They also may place the images with a distributor, who deals directly with customers and takes a significant percentage of the gross fee for his services. Some organizations serve as both agent and distributor. Many distributors only accept images from other agents and do not take in images from individual photographers.
The major agent/distributors have cut way back on accepting images directly from photographers. Now, due to the high cost of managing lots of individual suppliers, they are looking more to other agents, large production companies or consolidators to get the images they distribute. They want suppliers who can provide them with 5,000 or more ready to market, cleaned up and keyworded images on a regular basis.
Once, a photographer would put his images with an agent, and the vast majority of the sales would be made directly by the agent. Currently, most agents make a significant portion of their sales through distribution arrangement. Even Getty makes a significant percentage of its sales through distributors, so the gross fee they report, and use to calculate the photographer's percentage, is not always what the customer paid.
This means that most photographers must accept a second or third cut in the commission. Often, it's not easy to figure out how the chain works. If an image is licensed for $200 by a distributor, not the agent, the distributor takes 40% off the top and pays the agent $120. The agent keeps 60% ($72) and pays the consolidator $48. (In the case of RF, the agent sometimes keeps 80%.) The consolidator keeps 50% to 80% and pays the photographer between $10 and $24 for the $200 sale.