Recently, a photographer who has been regularly producing images for RM licensing for a lot of years asked, “Is there any future in stock photography?” He is with a leading agency, made very good money in the 1990s and sales were pretty good in the early 2000s. Then came 2008-2009 and sales dropped off the cliff. Now he is questioning whether it is worthwhile to continue to produce. He also said, “I have ever bought into the Royalty Free idea.”
When the recession hit many hoped that it would be temporary. Now that the economy seems to have recovered in many ways photographers are asking, “Why hasn’t the stock photography economy recovered as well?”
It is important to look carefully at what was happening in stock photography around 2008-2009. At the beginning of 2006 Getty acquired iStockphoto and the microstock industry began to take off. For a while microstock could be passed off as a low quality product produced by part-timers, but the quality improved quickly and many serious full time shooters got involved.
By 2008-2009 there were a significant number of very good images available in microstock. The good ones were also easy for customers to find if they didn’t care if a lot of other people had also used the same image. Customers could organize their search returns based on the number of times each image had been purchased by others.
As it turned out a significant number of customers didn’t care. In fact, they liked to know what other professional users had chosen and tended to buy the same images if the image happened to also work for their project. It became apparent that a huge number of customers aren’t always looking for an image that is brand new or no one has ever used before.
Recession
Then the recession hit and all buyers were looking for ways to cut costs. As a result buyers began to explore microstock. They discovered that not only were the images priced at a fraction of what they had been paying for RM images from their traditional source; it was also possible to find excellent quality images that satisfied many of their needs.
In addition the search process was often simpler and less time consuming than on traditional sites, the purchase process was easier and they got more flexible rights to use the images. Consequently, when money pressures eased they continued to use microstock as much as possible. Why spend more than is necessary?
Sure, some occasionally needed an image that couldn’t be found on a microstock site, or where they could control the use, but that became increasingly rare.
This also coincided with rapid changes and developments in marketing strategies. Instead of buying images for one specific project it became increasingly common to deliver the same message in many different print and digital formats. Often many of these eventual uses were unknown at the time of purchasing the image for the first project. Decisions to test new marketing strategies were often made very quickly. No one wanted to have to re-negotiate rights for each new use. Royalty Free licensing (and low prices when possible) were an obvious solution for the buyer.
On the editorial side there started to be a lot more use on the Internet. Some sites change the images they are showing many times a day. Others show a portfolio of images rather than a single illustration that they might use in a printed product. In these cases their overall budget for photography didn’t increase so the price-per-image they could afford fell dramatically.
Prices
In the last five years microstock prices have steadily increased but, for the most part they are still significantly lower than the list fees charged to use a RM image. But while microstock prices were rising in order to hang onto customers RM and traditional RF sellers have had to dramatically lower their fees and offer special discounts to many of their best customers.
As a result many RM images are now being licensed for use at fees below most microstock prices. Yet, overall the average price of all RM image licensed is still quite a bit higher than the average for microstock because there are still a few RM images that are licensed at reasonably high prices.
Competition
Another important factor to consider when trying to determine whether there is “any future in stock photography” is the huge explosion in the supply of images. Now customers have many more choices when it comes to subjects that are in reasonably high demand and the supply is growing much faster than the demand. Thus, the chances are greatly reduced that any given image will be selected for use.
RM photographers should look at the number of licensed uses of their images that they had in 2007 or 2008 and compare that with what they had in 2013. Then compare the revenue for the same period. That will tell them how much average revenue per-image-licensed has declined.
They should also consider the number of images they have added to the collection in the time period in an attempt to increase revenue.
Is RF Worth Considering?
My estimates are that fewer that 1.5% of all the images licensed worldwide annually are licensed using an RM licensing model where the price is based on usage. Thus, photographers that refuse to consider RF licensing are not addressing over 98% of the market for stock photography.?
For every one RM image licensed there are approximately 2 images licensed at traditional RF prices. Thus, about 3% of the images used are licensed at traditional RF prices. This means that over 95% of all images licensed are either microstock or subscription.
Microstock prices, and royalties may be low, but huge volumes can make up a lot of the difference.
Over 171 individuals (or in some cases small groups) with images on iStock have more that 100,000 downloads, most of them in the last 5 years. (See
here).
Before giving up on stock those who have licensed images as RM over the last few years should count the number of images they have licensed on an annual basis and calculate their annual royalty per image licensed.
Then assume an average royalty per image of approximately $0.65 for Shutterstock, $2.00 for other microstock sites or $12 if the images are in one of the exclusive iStock collections. (These are ballpark numbers.) Then calculate the number of downloads needed in each case to equal their 2013 revenue. Consider whether achieving such download levels might be possible.