1MOVING RM TO RF
January 25, 2005
We're on the cusp of moving a lot of RM imagery to RF.
There are indications that Getty is approaching selected photographers and agencies and recommending that they move some of their RM images to RF. This concept is often very hard for photographers committed to RM to swallow, but economically it could make a lot of sense not only for Getty, but also for the image providers themselves.
To understand why it can be good for photographers take a hard look at the numbers in Story 689. The average RF image is licensed almost three times as often as the average RM image (3.36 to 1.16). And, of course, some of the higher demand subjects are doing much better than the average. In addition, those who go along with a Getty suggestion to make images originally dedicated for RM available as RF are likely to get a lot more images accepted.
If Getty is requesting subjects that their sales statistics indicate are in high demand as RF then the increased volume of sales are likely to quickly offset the lower average licensing fee. In addition, the fees charged for RF single images are likely to rise. Despite the 89% rise in the price of single image RF in the last two years Getty officials have told investment analysts that they believe there is no ceiling in how much they can continue to raise the RF price because it is still so far below the average RM price.
In the same two years Getty's average price for RM, which is about three times higher than the current RF price, has only gone up about 20%. A lot of the RM rise has been due to very occasional high-ticket exclusive sales that skew the averages, but really don't benefit most photographers.
There are two risks to this strategy that Getty has to be careful about. They have got to make sure that they don't make the RF choices so attractive and all encompassing that they start cannibalizing their RM sales. That could mean lower total revenue for Getty even though the RF supplier would probably be doing better. This is particularly a problem if they can't find a way to significantly increase the total number of unites licensed and in the last couple of years that metric has been pretty flat.
Secondly, as they raise prices of single image RF they have to find a way to make enough material available at lower prices not to lose their low-end buyers. That has been an issue as credit card customers have disappeared and so far they haven't shown a good solution for getting them back.
However, the most important point for suppliers to keep in mind is that Getty has the statistics, and they are in a much better position to make a judgment on this than most RM suppliers. Thus, it is probably in the supplier's best interest to go along with whatever Getty recommends.