Myths About An Electronic Future

Posted on 7/27/1998 by Jim Pickerell | Printable Version | Comments (0)



July 27, 1998

Index Stock Imagery feels there are several "myths" about the electronic future that need

to be debunked. In March CEO Bahar Gidwani and Allen Russell, Director of Photography,

at Index Stock Imagery started sponsoring seminars around the country on how new

technology will affect stock photographers. So far they have visited

groups in Florida, New York and Arizona. Russell will also be speaking on Monday, August

3rd at the PPA Convention in New Orleans. To support their beliefs, they have shared

sales details and insights into their agency's operation that other stock agencies seldom make


Myths That Need Debunking

  • Stock Photo Fees Are Heading Down.
  • This assertion usually is used as an

    excuse to say, "So you'd better give up on shooting stock." In response Index points to

    their average domestic fees per image for sales in the traditional stock image market during

    the past two and a half years. The average fee at Index was about $440 two and a half

    years ago, and it has ranged between $400 and $500 during that period. Most recently,

    it is around $400. The average fee for Stock Imagery, recently acquired by Index has

    gone up from about $225 to almost $400. The average fee for Picture Cube has gone up

    from about $225 to $325. This jump occurred particularly since Picture Cube started handling

    the sales of Third Coast which they acquired late last year. Bahar makes the comment that,

    "it seems that well-run traditional agencies are doing a good job at keeping fee levels

    steady or even increasing them."

  • The Only Way To Make Any Money From Stock Is To Get Into Print Catalogs.
  • Index has produced a chart that shows that two and a half years ago about 62% of their fees came

    from print catalog images. That percentage has dropped to about 45% of total domestic U.S.

    sales currently. This drop occurred despite shipment of six print catalogs

    during the period. Gidwani says, "There is a simple reason for this drop -- technology

    lets us aggressively market our 'file' images. Since all new images are scanned

    and keyworded, our salespeople and customers see every image in the file -- even

    those that never make it into a print catalog. As the world shifts toward on-line

    buying, we expect catalogs to become a 'marketing and promotional tool', instead of

    a 'selling tool'. That means photographers can make money without ever being in a catalog."

      (These figures are for Index Stock sales, only, and prior to the recent acquisitions.

      They do not include Stock Imagery, The Picture Cube or Third Coast. The catalog sales figures

      are only from print catalogs, and do not include sales from CD-ROM or on-line catalogs. The

      point of the analysis was to demonstrate that digital catalogs do well in comparison with

      print catalogs.)

  • Royalty-free Is Taking Over.
  • This lame assertion drags along the following

    phrase -- "So you'd better give all your images to a royalty-free distributor."

    Index estimates that about 13% of the total market is for "RF" leaving 87% to the

    "RP" (Rights Protected) or traditional segment of the market.

      (Selling Stock believes

      the "RF" share of the world market may be even smaller, around 10%.)

    Gidwani says, "This shows how little revenue royalty-free agencies generate, compared to

    traditional ones. Sure royalty-free is growing fast -- that's why we recently

    chose to start a 50-disc royalty-free project. But traditional licensing is still

    a much bigger market, and seems likely to stay that way. Remember when people

    predicted stock would wipe out the assignment market? It hasn't happened yet..."

  • You Can't Make Money Off Low-Priced Licenses.
  • To debunk this notion Index has provided sales details from 15 of their top and middle-level

    photographers who have earnings from both traditional and electronic sales. Gidwani commented, "Notice

    that between 4% and 43% of their royalty checks have come from license fees under $100. (Most

    of the 'Under $100' money was generated by our Photos To Go program, that licenses medium resolution

    images to small businesses and home offices.) Over the past year, 93% of our

    photographers received revenue from these small fees. While the average amount of

    these fees was only $178, none of them sent back the checks!"

    Benefit of Electronic Image Marketing for Selected Photographers

    The following is "Average Quarterly Data" for domestic fees only based on the last

    four quarters of sales. This data is actual numbers from 15 anonymous photographers who

    are top and middle-level producers at Index. None of these photographers were with

    Stock Imagery, The Picture Cube or Third Coast.


    Revenue for Quarter   

    Number Images Online   

    Number Images Sold in Quarter   

    Licenses Under $100   

    Licenses Over $100   

    Revenue From Under $100 Licenses   

    Revenue From Over $100 Licenses   

    Percent Revenue Under $100 Licenses   

    Quarterly Revenue Per On-Line Image   























































































































































    Note that there were 2231 images licensed in the quarter. Of those 1969 were

    licensed for fees under $100 and the average return for these uses was $6.94 with

    the photographer receiving $3.47 per use on average. There were 262 images licensed

    for over $100 and the total income from these images was $125,228. The average fee per

    image used was $477.96. The photographers receive 50% of these numbers. Thus, 90.2%

    of the revenue came from the 11.7 percent of the sales that are over $100, and 9.8%

    of the revenue came from the 88.3 percent of the sales that were under $100.

    The chart below shows the type of subject matter that each of the above photographers

    is producing and selling and gives the average annual return per image on-line, the

    gross annual sales and the net that the photographer receives.



    Annual Gross Revenue Per On-Line Image

    Gross Stock Income Annual Basis

    Photographer Share (50%) Annual Basis


    Lifestyle, business situations.





    Industry, transportation, lifestyles.





    Lifestyle, travel, business concepts





    Business concepts, objects





    Lifestyles, concepts, industry.





    Objects, travel





    Lifestyle, scenics





    Technology, travel, lifestyle.





    Exercise, outdoor lifestyle, objects





    Lifestyle, business concepts





    Portraits, Lifestyles, fashion





    Panoramics, scenics, concepts.










    Beauty, lifestyle





    Business situations, industry




    The gross annual domestic income for the 15 photographers was approximately $277,798 assuming

    they received 50% of gross sales. Each photographer may have received additional

    income from foreign sales because foreign sales were not included in these numbers.

    On the other hand catalog fees would have been deducted from this number so

    the net to the photographer might have been less. The average annual income of the 15 listed

    is approximately $18,520.

    Index Stock Imagery currently represents 1,165 photographers. SELLING STOCK estimates

    that Gross 1998 income for Index Stock Imagery will be about $8,000,000 based on

    previously published figures and calculating a reasonable growth. If our gross estimage

    is correct, these 15 photographers represent about 7% of Index's gross sales depending

    on the additional income each of these photographer's received from overseas sales.

    If we divide 1,165 into $8,000,000 the average gross sales worldwide of all photographers

    with the agency would be $6,867 and each photographer would receive about 50% of that number, or

    about $3,433.50 per year from Index.

  • Low-Price Fees Will Keep Images From Being Licensed Traditionally.
  • Gidwani continues, "Again, better evidence comes from experience than hypothesis. Attached

    are 10 examples of images that have had good license revenue in both the high-end and low-end

    markets. Since we do not put catalog images into the low-end market, these are

    all "file" shots. Note that the revenue on these images has been boosted between

    2% and 50% by marketing them in both markets. Despite thousands of licenses in

    the low end markets, we have not had a high-end customer refuse to license an

    image because someone used it in the low end. Remember, people who license stock

    do so because it is reliably high quality, is easy to use, and doesn't cost as

    much as an assignment image. They understand there is a risk that an image can be

    used elsewhere, and will pay for exclusivity when they need it. We can always

    "pull" an image from low-end distribution, if a customer is willing to buy

    exclusive rights."

    Samples of Images

      Subject of the Image

    Traditional Market Uses

    Traditional Market Revenues

    Electronic Uses

    Electronic Revenues

    % Added by New Market

      fiber optic






      emergency medicine






      earth from space






      offshore oil well






      power plant pollution












      telephone receiver






      computer concepts






      sunset over desert






      ballet dancer







    Future Moves To Watch

    There may be an alliance between Index Stock Imagery and Zefa Visual Media in the

    near future.

    According to Visuell International, the respected stock photography magazine published in Germany,

    Zefa Visual Media, one of the leading stock agencies in Germany, announced plans in May to

    create a network of partner agencies in which national agencies

    form an organizational alliance in the areas of technology, marketing and picture purchase. The

    partners will remain financially independent profit centers.

    So far Zefa has signed up

    agencies from the UK, Austria, Belgium, Italy, the Netherlands, Spain, Switzerland and Turkey.

    It is planned that the partner agencies will change their names so there will be one Zefa

    picture agency in each country in much the same way that The Image Bank has always been structured.

    The interesting thing about this Zefa partnership, from the U.S. point of view, is that Erwin Fey, CEO

    of Zefa has said that, "Zefa is negotiating with a 'well known American agency' on the question of

    international co-operation." He also assured his listeners that the agency was not Corbis.

    This statement was made prior to the sale of Stock Imagery to Index Stock. Zefa has had a close

    relationship with Stock Imagery for several years and Stock Imagery represents one of their print

    catalogs here in the U.S. Industry observers believe Zefa is likely to agressively pursue a

    relationship with Index Stock Imagery. The thinking is that all other U.S. agencies large

    enough to fullfill the marketing role Zefa has in mind, either have a solid international marketing

    network already, or would not be interested. In order for the Zefa concept to be competitive with

    Getty, VCG, or TIB, it is critical for them to have a strong U.S. marketing outlet.

    As a side point, it was reported by Visuell that, "Sascha Weis, head of sales at Zefa, Dusseldorf,

    considers the future production of traditional printed catalogues to be more a question of image, noting

    that the catalogue is changing, from a sales instrument to an 'image-carrier.' The business is

    likely to shift more and more to the electronic transmission of photos for selection by the client."

    This fits in very well with the on-line philosophy of Index Stock Imagery.

    Copyright © 1998 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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