Microstock cannibalization of traditional RF is occurring at a faster pace than I predicted in Royalty Free Trends At Getty. In that article, I estimated total 2007 iStockphoto revenue at $55.55 million, based on some extrapolation of the year end figures provided.
Now, based on documents filed with the SEC on March 27 and reported in PDN, Getty has confirmed that iStockphoto earned $22 million in 2006 and $72 million in 2007.
In 2005, the revenue generated by CDs, DVDs, Virtual CDs and Subscription sales had been steadily climbing to almost $9 million in the final quarter for a total of $33.46 million for the year. At the beginning of 2006, Getty added iStockphoto to this grouping and stopped breaking out the others separately. In order to make some determination of iStockphoto revenue, I estimated a slight rise in CDs, DVDs, Virtual CDs and Subscription sales-and then a leveling off.
In fact, the new figures show that CDs, DVDs, Virtual CDs and Subscription sales in 2006 declined to $31.24 million. In 2007, there was a further decline to $24.55 million.
In retrospect, it is easy to understand why this happened. With inexpensive microstock images easily available, traditional customers no longer a needed to buy 50 or so images at a time on a particular theme in order to get a discount.
In 2006, the total traditional single image RF sales plus CDs, DVDs, Virtual CDs and Subscription was $286.17 million. That dropped 11% in 2007 to $255.34 million.
The $72 million also provides a better understanding of the average price of a microstock license. iStock licensed 17.55 million images in 2007, making the average price $4.10 per license, up from the $3.17 in the final quarter. Given the steady rise throughout the year, the average price for the final quarter, before the company raised its prices in January, was probably close to $5.00.