Industry in Turmoil

Posted on 9/9/1999 by Jim Pickerell | Printable Version | Comments (0)




September 9, 1999

The stock photo industry is in turmoil. Never in the more than thirty years I have

been involved in stock has there been so much uncertainty among photographers about

their future.

In this issue I will take an overall look at our industry and consider how the

various issues facing photographers -- royalty free, agency consolidation, over

supply, pricing, marketing methods, potential for growth in sales to internet users

and consumers, agencies wholly owning high demand subject matter and volume

production -- impact on one another.

Shifts and changes are occurring at dizzying speeds. Photographer/agency

relationships that have taken years to build have been shattered in an instant.

Information needed to make educated shooting decision is scarce. Predicting future

customer needs and finding ways to show customers what you have to offer has become

much more difficult for most stock photographers than it has ever been.

In most other lines of business the potential market is evaluated and supply lines

developed before production begins. In the stock photo business before getting

representation, it is usually necessary to produce large quantities of images on

speculation. Getting an agency contract is no assurance that the next images you

produce will be included in the agency's next promotion. More and more a few big

agencies control which images will get seen by potential clients.

Photographers are Still Making Money

The good news is that some photographers are earning significant incomes from stock

and buyers are using more stock images.

Based on a survey we did earlier this year 35% of photographers who produce and

sell stock earned in excess of $70,000 in 1998 with 6% of the photographers earning

over $400,000. This was basically the same as the survey we conducted in 1997.

On average these photographers spend 43% of their income on expenses, before taxes,

to run their photographic operations. Those making under $70,000 tended to spend a

higher percentage of gross sales in production and operating costs than did those

in the higher sales brackets. See the complete survey results in

(Story 213.)

In our survey, 51% of the photographers reported their yearly income from stock was

increasing, but the rest said income was either about the same as the previous year

or decreasing. Many of those who have built their stock incomes to levels in

excess of $70,000 per year have found that sales are leveling off -- or in some

cases falling -- in spite of continued production. Based on comments we have

received from photographers so far in 1999 we expect our survey in 2000 will show

that a higher percentage of photographers are seeing a decline in sales.

The number of stock images used by buyers is probably increasing although getting

an estimate that is reasonably accurate is probably impossible. Getty Images could

come the closest in making such an estimate, but they are not sharing that data.

While Getty can easily total up the individual sales from the rights protected

licenses, they can't calculate the number of times an RF image is used, whether it

is sold on-line or on a disc.

Whatever they are, these RF uses add to the total number of uses and have a direct

impact on the number of Rights Protected images buyers need to purchase.

Royalty Free's Role

Royalty Free is here to stay. Like it or not, it is important to realistically

assess its present and future impact on the industry.

To understand RF's share of the market we must first determine the size of the

total market.

I estimate that the gross sale of stock photography, worldwide, is $1.25 billion

U.S. The overall growth of the market in dollar volume in the last few years has

been, at best, less than 5%, and may actually be declining.

I estimate that worldwide Royalty Free sales in 1999 will be about $155 million, or

roughly 12% of total industry revenue.

Because the average fee paid for a Royalty Free use is so much lower than the

average fee paid for a "Rights Protected" use the percentage of total usages

represented by this 15% of dollars could be as high as 40% of total usages.

How do I get this number? Assume that the average fee paid for each RF image used

is $80. This would mean that if someone pays $250 for a RF disc they use, on

average, only three pictures from that disc, not all the images on it. In fact the

$80 may be high, but we will work from there. This would mean that from $155

million gross sales there were 1,937,500 uses.

On the Rights Protected side there were almost $1.1 billion in revenue. If we

assume the average RP sale was $400 this gross revenue would have represented

2,750,000 uses.

The 1,937,500 is over 40% of the total 4,687,500 uses. If the average price per

usage is actually lower than $80 the percentage of total uses could actually be

higher than 40%. (We have no way of determining how many times a given RF image is

used or how many images from a single disc are used.)

To take our logic a little further, assume that RF is somehow able to control 100%

of the stock photo usages. At current RF prices the stock photo market would

become a $400 million a year business, not the $1.25 billion it generates today.

The situation for photographers is even more depressing because they are probably

receiving an average of 35% to 40% of the gross revenues from the Rights Protected

market, but less than 20% of RF sales. Thus, revenue to the producers of the

images is currently approximately $416 million [$385 million (35%) for RP plus $31

million (20%) for RF). If all sales were RF the photographer's 20% share of $400

million would be $80 million.

Make It Up On Volume

One argument for the Royalty Free pricing strategy has always been that they would

make up for low prices with increased volume of sales. During the "early adopter"

phase of the RF business the number of users rapidly increased as more and more

business users found ways to use RF as a replacement for more expensive Rights

Protected images.

However, now that virtually all traditional photo users are aware of the advantages

and disadvantages of RF, the rate of increased use seems to be leveling off.

Consider the volume of uses it would take to get from a $400 million level of sales

to $1.25 billion at RF prices. If 4,687,500 uses generate $400 million in sales,

it would take 14,648,437 uses -- at current price levels -- to generate $1.25

billion. That's a lot of additional brochures; additional magazines; and internet


Clearly personal use would have to play an important role if RF were to reach these

numbers. The hope is that there will eventually be a volume of consumer use that

will far outstrip the number of business uses. However, if the price point for

business users is $80 per use it is hard to imagine the price point for consumer

use being much more than $10. Maybe $2.00 per use is more realistic. Thus, to

generate $1.25 billion in sales there would need to be over 117 billion uses at $10

each or over 585 billion uses at $2 each.

The Good News

It is my feeling that RF will top out at 50% to 60% of all stock usages. At

current rates, that will probably represent 20% to 25% of gross stock billings. I

believe there will always be a demand for imagery that will not be economic for RF

producers to supply. Some customers will turn back to assignments in order to

obtain certain images that can't be used by all their competitors. The savings

they realize from making some use of RF will make it possible for them to spend

more money on assignments.

There will always be a demand for some rights protected photos.

Customer will want:

  • an image that is immediately available (faster then assignment)

  • an image that has a different look from the RF options available.

  • an image that will not be used as widely as many RF images are likely to be


  • a creative idea that has already been executed, but not something that will be

    used to death.

  • a price cheaper than an assignment produced image, but not necessarily as low

    as RF.

  • in some cases, specific rights control, although not many buyers actually ask

    for that at present.

The big question is whether there will be enough demand at the higher prices to

justify continued production by stock photographers.

Supply vs. Demand

Most businesses try to keep SUPPLY in balance with the DEMAND, or at least the

perceived demand. This is a basic law of economics which, for the most part, the

stock photo industry totally ignores.

There has been very little control over what, or how much, will be produced in a

given subject area. The sellers encourage production in order to get variety.

Since they do not participate in the costs of this production there is no limit to

their irresponsibility.

As one photographer puts it, "It's like General Motors going to their manufacturers

of steering wheels and saying we're going to sell a lot of cars next year and every

one of them will need a steering wheel. We don't know how many we'll sell so just

produce a lot. Give us a lots of variety in color and design. Some buyers may

want square wheels, some may want stripes and some may want polka dots. Be

creative. Oh, and by the way, a bunch of other suppliers will also be producing

steering wheels so we can guarantee you how many of yours we'll sell. Also, we'll

tell you after you have delivered the product what we will pay you for those that

are used. Your cost of production has no relevance to what the buyers are willing

to pay."

Steering wheel manufacturers are smart enough not to produce under these

conditions. Photographers have bought into this strategy and have produced in the

last few years a tremendous oversupply of images of the most commonly used

subjects. Meanwhile overall demand has been relatively flat for the last few years

compared to the heyday of stock in the 1980's.

The system can work -- and it did -- when the demand was greater than the supply

and when prices were kept high. At some point a limit is reached for the use of

the product. Increasing supply beyond that point simply adds to costs and reduces


To a degree the big agencies are trying to control supply in areas where it affects

their costs. They are accepting fewer images into their files. However, I believe

their motivation is to cut their costs and increase their profits, not help the

photographers make wiser production decisions.

Increased advertising may increase demand. Opening up new markets may increase

demand. But, it is dangerous to greatly add to the supply until there is some

evidence that demand will actually increase. For the last few years the industry

has been dramatically increasing supply as many new photographers have attempted to

enter the business, based on the success stories of photographers who have been

selling stock for five to ten years.

The tendency has been to be seduced by the successes of a few at the top and not

fully consider the overall implications of what is happening in the market place.

Participants in the industry may be able to increase their "market share," but if

demand is not growing someone else in the industry will lose share.

The vast majority of those individuals who are currently successful in stock got

started in the 80's, or before, and built their file during the period of

increasing demand and low supply. Some argue that the old timers are successful

simply because they have been in business for a long time and that new people

starting out will be equally successful when they have ten or fifteen years

experience under their belts.

I don't think that will be the case. This totally ignores the change in the

supply/demand curve. In the 80's and early 90's there were relatively few images

to choose from in any subject area. Thus, those images that were available got

used frequently. If there were 25 images available on a particular narrow subject

in the 80's there are hundreds available now -- many of them in print catalogs.

Consequently, the buyers have a lot more to choose from and the odds that any one

particular image will be picked frequently are slim.

More and more photographers have entered the stock photo business and most have

focused their production on subject areas of people, business, lifestyles,

recreation, travel and scenics that are in high demand for advertising use.

Buyers are always looking for something different. But, there are two questions

the photographer needs to carefully consider before stepping out to produce those

"different" images. First, how many "different" looking images will I have to

produce, and at what cost, in order to make a single sale? Second, will the image

the buyers want sell frequently enough or at a high enough fee to justify the

expense and time of producing, not just that one image, but all the other


No one will know the answers to these questions when they start out. But, assuming

that the purpose of taking the pictures is to earn a profit, it is important to

track the information so that as time passes and/or sales begin to develop the

photographer can determine those subjects that are likely to be most productive.

Consumer Market Demand

In general demand is not increasing. There have been many predictions that there

is a huge untapped consumer market for images. Corbis, Getty and Index Stock are

all aggressively pursuing this market. So far there has been very little

indication that consumer sales will produce much income.

Maybe it is still too early and maybe the market will eventually develop. That is

certainly the hope of the major suppliers. Given the way percentages for these

uses are structured, if the market does develop, the people likely to reap the

benefits will be the agencies, not the photographers producing the images.

I am personally very pessimistic that such sales will ever produce much in the way

of income, but many of the biggest players in the industry are betting huge amounts

of money that sales to the consumer will be the future of stock photography. Is it

possible that Bill Gates could have made a mistake?

Internet Demand

There have also been predictions that the growth of the Internet will increase the

demand for images. Certainly many images are being used there that were not being

used five years ago. In this area I think several things are happening.

  • Many businesses are using images they purchased for other purposes. They

    are paying little or nothing for this additional use. Sellers need to aggressively

    push for reasonable additional fees for these additional uses.

  • Small business and consumers are stealing images from the Internet. A huge

    portion of the public has little or no understanding of copyright and why it is

    important to continued production of new material. The motto is: "I want all I can

    get now, for nothing. Let someone else worry about the future."

  • Many of the images used on the Internet are self produced.

  • When user do pay for images it is often at RF rates and thus it adds little to

    the net gross sales of images.

  • As we anticipate future growth of imagery on the internet it is likely to be

    for digital video, not still images. When the internet matures as a medium for

    supplying information and communication still images will appear about as

    frequently as they appear on TV today.

Agency Sales Growth

The annual growth in sales that big agencies were experiencing five to ten years

ago has slowed to a trickle for most. In the first six months of 1999 growth for

Getty Images, the industry leader, went from $50.1 million to $55 million (a 9.7%

increase). During that time they acquired a company ( for stock valued in

excess of $200 million but this company added very little to their bottom line in

terms of sales.

What seems clear from the slow growth of the top agencies, and the fall off in

sales that many medium and smaller agencies are experiencing, is that the overall

increase in volume is not enough to offset the lowering in average price per image


Two agencies -- EyeWire and Definitive Stock -- each less than a year old and

heavily involved in the royalty free area of the business were recently sold to two

of the majors -- Getty Images and Visual Communications Group respectively.

One interesting thing about these sales is that when each of these companies were

established it was predicted that they were IPO bound and would be competitors to

the majors. Instead, in less than a year they have been absorbed by the majors.

Agency Consolidation

Through acquisition the bigger Rights Protected stock agencies are bringing more

and more photographers under one roof. The consolidation that is taking place at

Getty Images, VCG, Corbis and Index Stock has a tendency to bring all their

photographers under one editing and marketing philosophy. This tends to reduce the

number of images and photographers these agencies need.

This can be good for some photographers because it limits the competition, but it

may not be good for everyone. In the past some photographers have found that being

with many agencies added to their success because each agency had a different

approach to editing and marketing. Some photographers have found that where before

they were dealing with three or four editors, now through acquisition and

consolidation they are dealing with only one. The variety of editorial points of

view in the past helped the photographer get more of his or her production where

buyers could see it.


When there were lots of agencies each one needed their own set of images on every

subject -- ballooning, or whatever. The image that eventually sold depended more

on the source the client used to find pictures, not necessary on which image was

the most outstanding. With fewer and more dominant agencies, statistically the

odds are that the remaining smaller agencies will make fewer sales unless they can

carve out a strong niche that the big guys aren't supplying.

Also the consolidation of several agencies under one roof -- and in one on-line

database -- is making the oversupply that much more obvious. To cut their costs

many large agencies are accepting fewer images than they had in the past.

On the other hand, there is still some need for small agencies. Those different

editing and marketing approaches still have some value. Small agencies can also

compete on-line without having to set up and promote their own sites. Picture

Network International and Workbook both have on-line sites where the work from 40

or more agencies are represented. Buyers can go to a single site and using keyword

search review what all the agencies have on a particular subject.

As use of the Internet builds, these sites will offer buyers the variety they may

be unable to find by going to the sites of the three or four majors who have made

tight determinations about what images the buyers should be allowed to see.

Agency Production

There are two basic production strategies I would like to review -- I'll call them

the FPG and the TSI strategy, although other agencies are doing more or less the

same thing.

At FPG they are narrowing the number of photographers they are working with and

pushing those remaining to be more aggressive producers. While some long time

producers get dropped in this process, those that remain, in theory, will get a

higher volume of sales and have less competition.

One of the problems with this strategy is that the marginal producers who get lost

in the shuffle often had a unique style, vision or access that provided a breadth

to the agency's file. Also their images did sell. Unfortunately, demand for such

images was not high enough to put these photographers among the agency stars. Now

the agency stars will be asked to do what they do best, plus fill in the holes left

by those who are no longer with the agency.

The problem with this strategy is that often very talented photographers simply

don't have the skills, contacts or interest in producing images on various

specialist subject matter. Thus, they either do a poor job in covering the subject

or simply don't cover it at all.

On the other hand most of the "specialists" do work that overlaps with some of the

other photographers in the agency and they need to continue selling this other

work. They will be upset if their agent doesn't accept and sell their more general

work. But this work competes with the work of the agent's stars and reduces the

revenue those stars receive.

Trying to keep a few top producers happy while still maintaining a broad based file

is a very difficult balancing act. The classic case of why the FPG strategy may

not work is Comstock. Over 80% of Comstock's images were produced by two

photographers -- Tom Grill and Michael Stuckey. The range of work that these

photographers have produced during their careers is awesome. Yet many feel that

Comstock's weakness is that they lack a "variety of vision." Any individual

photographer is going to be limited in the ways they approach a subject. Someone

will always be able to bring another point of view. Art directors are often

looking for those different point of views.

Maybe Comstock's problem was that they were too narrow. Maybe instead of two it

should have been 20 or 50 or 100. And maybe FPG and others will find that magic


The TSI strategy is more complex. They work with a much larger group of

photographers -- hundreds. But they select so tightly that most photographers --

even many of their top income producers -- get very few new images into the files.

As a result incomes are falling for some of these photographers and they have cut

back on their production. Some photographers are looking around for other outlets

for their work.

As it became harder and harder to get their photographers to produce the new work

they wanted, TSI moved to doing production shoots with a few of their

photographers. In addition to getting what they want in a timely manner, the

agency gets to keep a larger share of the gross fee collected from the sale of the


As some stop supplying new production at the rate the agency wants the agency has

begun to produce some images in-house in an effort to supply a steady flow of new

material and increase their profitability. They make various arrangements with the

photographers. One photographer was offered a shoot for $800 a day plus all

expenses paid up front and a 10% royalty on any sales made from the images in the

first ten years.

This strategy has been productive for PhotoDisc and Corbis Digital Stock, the two

major Royalty Free producers who started in the early 90's to build files from

scratch. However, it is not clear that the strategy will work as well, in terms of

encouraging producers, when a agency is trying to add to a mature file.

On the other hand inside sources tell us that TSI is rethinking this strategy and

is considering an approach more along the lines of the FPG strategy outlined above.

They will work with a few specialists, pay full commissions, and try to insure

that these photographers have steady growth in sales.

It appears that TSI has been disappointed in the return on investment from some of

their production shoots. This could be the result of a number of things. Maybe

the in-house art directors really do need creative input from photographers, not

just button pushers. Maybe TSI couldn't get any of their top shooters to agree to

do shoots for expenses and a small up front fee. Maybe when photographers work for

a fee and expenses they don't work as hard as they do when they have the hope of a

share of sales.

Another factor the TSI producers may have failed to consider is the re-shoot time

many photographers put into producing images when they are paid a royalty. In many

cases photographers are asked to go back several times and re-do images until they

are "perfect" to the editors standards. If the photographer is working on a day

rate that's another fee each time the photographer goes back to re-shoot. I

suspect TSI's production coordinators were reluctant to do as many re-shoots when

they were paying for the effort.

Whatever the reason, expect TSI to back away from fully funded production shoots

and to rely more on working aggressively with a few top producers.

Volume Production

In the past when there was an under supply of images the key to success for most

photographers was volume production. Now, that frequently doesn't work. Agencies

often have so much in their files on any given subject that they choose not to add

new material. Photographers find that even when the new images significantly

update existing images in the file -- like a city skyline -- the editors often

won't select the new images.

Agencies have become very conscious of the costs of putting new images into the

files and the cost of maintaining those files. Consequently, they are cutting back

on the amount of material they accept. They also understand that marketing in the

future will be primarily on-lines. Digitizing and properly keywording images is

much more costly than traditional storage of plastic-sheets-in-file-drawers.

Therefore, it's time for tighter editing.

Some sales still come from the general files, but the majority come from some type

of catalog -- print or digital. Thus, the editors are so focused on editing for

catalogs that in many cases they hardly take anything for the general file. This

varies from agency to agency.

This does not mean that the rejected images will not sell. But, the challenge for

the photographer is to find some way to make these other images available for

viewing by clients. In addition, if your agency will not store indepth coverage of

a subject there is very little point in shooting volume. Many photographers are

discovering that they need to totally change their approach to shooting in order to

satisfy current agency editing requirements.

In choosing an agency it is important to try to determine the percentage of sales

that come from catalog images, the percentage from on-line and the percentage from

the general file. Then find out what you have to do to get your images where they

will be seen. Many agencies are reluctant to provide this information, but the

questions should always be asked. Just being accepted by an agency is not enough.

Getting Accepted

Photographers are finding it much more difficult to get their work seen. The top

agencies have too many photographers chasing them.

The problem for many photographers is once they produce they can't get their agent

to put the images into promotion.

Photographers with years of experience with major agencies are being dumped by

these agencies. In some cases their rate of production has fallen off and in

others the photographers have found it difficult to change their shooting style to

fit the new editing demands of their agency. In many cases it is not that what

these photographers have producing for years won't continue to sell. It is simply

that the agency has decided it wants to present something different to the buyers.

The major problem with tight editing is that editors -- no matter how much

experience they have -- do not have a perfect understanding of what will be in

demand in the future. The tighter they edit, the more good salable pictures they

tend to leave on the table. The more they look for "edgy" images, the more they

are likely to ignore salable subjects that have long range potential.

The fact that agencies are editing in this way is not necessarily bad for the

photographer provided the photographer is given the option to try to market the

rejected images through another venue.

Photographers need to fight for non-exclusive or image-exclusive deals, but reject

being exclusive to an agency unless the agency is willing to put a significant

portion of the photographer's work into promotional vehicles (print catalogs or

on-line). If the deal is image-exclusive the definition of similars should be

narrow, not very broad as is the trend among many agencies.

Marketing - Print Catalogs

Print catalog generate more dollars in sales than any other marketing vehicle, but

the cost to photographers of putting images in these catalogs is horrendous. Thus,

many photographers are finding that at the end of the day they are not making a

profit on images advertised in this manner.

In June 1998, we surveyed photographers who had advertised in Direct Stock 6. This

book had been in the hands of art directors for more than 16 months. We got

responses from photographers representing more than 28% of the pages in the book.

The average photographer had earned $3,115 and paid approximately $2800 for the

advertising space. A $315 profit from your best images in 16 months is not much to

write home about. Many photographers didn't make enough to pay off their cost of

the page.

(See Story 146.)

From conversations we have had with some photographers who are in Direct Stock 7

their returns aren't any better. However, this is not just happening at Direct

Stock. We believe that many of the smaller agency catalogs are experiencing the

same kind of falloff in returns. In some cases photographers don't pay for the

space unless their images sell, but a small volume of sales is still eaten up by

the space charges.

The simple fact is that there are too many images available in print catalogs. The

art directors have lots of choices. The odds that any image will sell frequently

are getting slimmer and slimmer.

Print catalogs are probably still doing better overseas than in the U.S. because

on-line and CD-ROM have, as yet, had relatively little impact outside the U.S.

Another problem with print catalogs is that the big agencies are tending to use

their print catalogs as market position pieces not vehicles for generating sales

for specific images. This affects the type of images they select for their

catalogs (edgy) and the kind of images they pressure photographers to produce. It

may also lead to lower sales per catalog image for some photographers.

On-Line Marketing

The number of buyers using on-line databases to search for images is increasing at

a rapid pace. The costs of making images available on-line so they can be easily

found is much higher than the traditional plastic-sheets-in-a-file-drawer method.

In the second quarter of 1999 Getty Images reported that 25% of their total sales

were e-commerce. Since 85% of these e-commerce sales were in North America that

means that close to 40% of the sales TSI made in North America during the quarter

resulted from searching a digital database either on-line or on CD-ROM.

In August TSI acquired EyeWire and their mailing list of over 300,000 customers who

have purchased graphic arts products.

TSI's on-line site has 76,000 registered users. Picture Network International, a

site with images from more than 60 agencies, has over 50,000 registered users. We

have no idea how many registered users Corbis has, but they seem to make fewer

sales than PNI.

Several Corbis photographers indicate that their share of sales should be between

$3.00 and $4.00 per image on-line for 1999. This is up significantly from previous

years. On the other hand Stock Connection photographers who have images on PNI

will probably earn in excess of $20 per image, per year for each image they have on

PNI for the whole of 1999.

It should also be noted that only a little more than 1% of the images on PNI are

Stock Connection images. We have no way of knowing whether our returns are better

or worse than the other agencies who obviously represent the vast majority of the


Stock Connection photographers also have images on In the past year

our photographers have received, on average, a little over $15 per image, per year

for each image they have on this site. Approximately 5% of the images on the site

belong to Stock Connection photographers. We do not know the average return per

image for other agencies.

By way of comparison it is also worth noting what ASMP's MPCA on-line service is

producing. In March of this year, Dick Weisgrau told us that MPCA has about 600

qualified buyers who can view the site and that gross sales are in the range of

$60,000 per year. This means that MPCA photographers are receiving, on average,

about $.70 per year, per image on file.

Specialize - Content Specific Images

Some of the photographers who are still experiencing growth have developed very

identifiable specialties. Developing a specialty can be very useful, and is likely

to be more so in the years ahead. The trick with a specialty is to be unique

enough that you don't have too much competition -- and yet not so unique that there

is very little demand.

Many photographers who specialize get immersed in trying to completely document

their area of expertise, and fail to take into account the potential demand for

their subject. Thus, even if 100% of the eventual uses of the subject go to the

photographer, the photographer still loses money because he spent more on in depth

coverage than he earned in usage fees.

Photographers with specialties must keep in mind that some agencies will encourage

them in such production because the agency does not normally share in the

production costs and makes money no matter what the level of sales.


As the percentage of RF uses increases it becomes more important, not only to hold

the line of Rights Protected pricing, but to actually raise fees for these uses.

Unfortunately, some of the major agencies are headed in the other direction. They

are lowering Rights Protected prices in an effort to try to compete with RF. Most

will deny they are doing this, but all photographers have to do is look at their

sales reports to determine if the average fee per use is as high as it was two or

three years ago.

Some agencies believe that something is better than nothing and that they will

"make it up on volume". They believe client who go to RF will never come back.

Unfortunately, for most, the additional volume doesn't seem to be making up for the

low prices.

These agencies don't consider "cost of production" a factor when setting the price.

All they are looking for is a steady growth in sales revenue.

As the volume of Rights Protected sales decreases, photographer's with unique work

may have to find ways to sell directly so they can control the price, if they can

not find agencies who will hold the line on pricing.

For photographers, pricing must have some relationship to their cost of doing

business and their estimated annual volume of sales. If the number of sales (or

uses) go down and the costs of production, marketing and administration either

stays the same or goes up, prices must go up to cover costs and profit. Otherwise,

the photographer needs to get into another line of work.

Uses vary greatly from major ad campaigns to 1/4 page brochure uses and spot

editorial uses. Price schedules have been based on the assumption that there would

be few of the major uses and a large volume of the smaller uses. Producers could

afford to license rights for smaller uses for fees that were way below costs of

production because they were getting two things:

  • a high volume of small uses

  • higher fees for larger sizes, larger circulations and multiple


Now the producers who license Rights Protected are losing in both these areas to


They are also losing on larger sizes because some agencies are cutting the spread

in price between 1/4 page and full page or cover. Some agencies (not all) are also

allowing large print runs for basically 5,000 print run prices, and finally, they

often don't push the price for multiple insertions.

Those that do hold the line are finding that hard negotiations are getting much

more frequent. These can be very stressful as the seller tries to determine, "Does

the customer really need this particular image?" and "At what point am I willing to

lose the sale." Our experience at Stock Connection is that more often than not we

get our price and it is usually way above what the buyers tell us they have to pay

for similar pictures at some of the big agencies.

When there are fewer sales the seller should be asking more for each one of them,

not less.


Editorial usage rates have been way below what they should have been for years.

The rates set by the publications for the most part have absolutely nothing to do

with the publication's, or the photographer's, cost of doing business.

Publications establish their rates based on the minimum they can get away with

paying while still getting "something" in the way of illustrations to fill their


For years photographers have allowed editorial buyers to get away with this payment

policy because (1) they loved to do editorial work, (2) they expected to make

multiple resales of the images, and (3) they could also do some commercial work and

make up for their editorial loses through commercial sales.

Now these dynamics are changing. Their sales from commercial stock are falling off

and the number of multiple resales to non editorial users are decreasing.

Thus, photographers must fight for more for the initial use as well as additional

for payments for every re-use by the publication. If your stock agency is not

generating significant additional use from other publications see if they have put

any of your images on the PNI on-line site. Many editorial users are using PNI

( as a resource

and it is relatively easy for your agency to begin marketing on-line.

The Editorial Photographer Group is moving to push up rates. You can join this

on-line forum by going to


The site is password protected and all applicants must be approved by the list


Foreign Sales

Many in Europe and other parts of the world are more optimistic. I believe this is

for two reasons.

First, a much higher percentage of their sales are for editorial uses and it is

much harder to find RF images that will substitute for such uses. Thus, in the

long run those who shoot editorial subject matter should see less impact from RF.

Second, based on Getty's statistics that 85% of digital sales are in NA, RF must

have had very little impact so far in the rest of the world compared to what is

happening in the U.S. On the other hand this is probably short lived. Within two

or three years photo buyers in the rest of the world will probably catch up to the

U.S. in terms of the use of digital technology. At that point, those looking for

pictures for commercial use will probably make as much use of RF as is now

occurring in the U.S.

Steps for Success

1 - Be selective in what you shoot. Volume production, particularly of

subjects where there are already a lot of images in the files of most agencies

(virtually everything) may no longer be the key to success. The way your agency

edits may dictate the depth of your coverage on a particular subject. It may be

better spending time and money perfecting one particular view of a situation rather

than shooting it ten or twenty different ways.

Before you head off in one direction get a sense of what your agency will accept.

2 - Get your images seen. Before you get too heavily committed producing,

in terms of time or money, expend some effort to get your images seen. Getting

your images before the buyers helps you determine if they are marketable. It also

helps you identify the marketing channels that will work best for you. Many very

creative photographers fail for lack of marketing, or because they use the wrong

marketing strategy.

3 - Look to stock as a sideline, not a principle line of business. Expect

the income to be add-on, not a major means of support. Keep your day job. Have a

way to support yourself while you wait for sales to develop.

4 - Diversify your marketing. Test various marketing methods. Put some

images on-line, some on CD-ROM, some in print catalogs, some in general files and

carefully compare results. You may be able to do all this through one agency, but

if you can't consider several. Remember the value of getting different editors. It

may even be worthwhile to make some images available through royalty free sources

as a way of comparing results.

In this time of transition you need to experiment with various marketing strategies

and track the results of each with your images. Some strategies will work well for

one person and not well for the next. Most of all stay flexible.

5 - Control costs. Be careful about the amount of work you produce on

speculation unless you have a very reliable distribution outlet with a track record

of stock sales. Re-sell work you have already been paid to produce.

6 - Specialize. Try to find something to shoot that hasn't been done to

death by everyone else. At the same time make sure there is a demand for that type

of image. If you become an expert in an obscure subject where only a few images

are needed are needed worldwide each year, you are not going to make much of a

living from shooting that subject, even if your images are unquestionably the best

on the subject.

You may develop several narrow specialties. One way to find out what has been done

is your specialty is to search the internet, and particularly the on-line photo

sites, for your specialty.

It is easy to overshoot in a specialty. The tendency is to cover it in much

greater detail than buyers care about. You may do this for your own enjoyment, but

from an economic point of view it is very easy to spend much more in producing a

specialized coverage than you will ever earn in fees.

7 - Don't cave in on prices. If your agency is selling at prices that are

too low, look for another agency. If you are making fewer sales at rights

protected rates then the fee for each usage must go up. Think about designer

clothes. They don't sell at off-the-rack prices simply because they serve the same

function as the clothes you can buy in discount stores. Know when the unique

characteristics of your image make it difficult for the buyer to use a substitute.

Be particularly sensitive to holding your price in such situations.

8 - Get on-line. Use e-mail. Learn what is available in this environment.

It is amazing to me the number of photographers who hope to earn income from stock

photography, who are not "hooked up" in any way to the internet and who are

computer illiterate. Even if you don't sell a picture on the internet now, or

plan to in the future, you need to familiarize yourself with the potentials of this

means of communications.

9 - Start a Concept File. Understand who is buying and what they are buying

before they shoot. Clip magazine ads and brochures and add to your files

constantly. Use the file for inspiration. Look for clues to trends, stylistic

changes, gesture, cultural movements which should be mirrored in your stock

photography. Don't copy, but use this resource to learn more about what your

photos might need.

10 - Exclusive vs. non-exclusive. Photographers need to fight for

non-exclusive or image-exclusive deals. Reject being exclusive to an agency unless

the agency is willing to put a significant portion of your work into promotional

vehicles (print catalogs or on-line). If the deal is image-exclusive the

definition of similars should be narrow, not very broad as is the trend with many


Copyright © 1999 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, 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:  


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