New Stock Photo Marketing Strategy

In the U.S. over the last several decades there has been a dramatic shift in the proportion of wealth going to CEO’s, senior managers and capital investors compared to what workers receive who actually create the products, and provide the services.

Since 1978 the average CEO’s compensation has grown 940% while typical worker compensation has only risen 12% and not kept up with inflation. In 1965 the ratio of CEO-to-worker compensation was about 20-to-1. By 2018 that ratio had grown to 278-to-1. According to Federal Reserve statistics in terms of wealth the top 1 percent own 52% of stocks and the top 10% own 88%. The bottom 50% of workers account for only 13% of income.

This disparity has certainly been apparent in the Stock Photo Industry. While CEO’s and capital suppliers have prospered many image producers can no longer earn enough to cover their costs and justify continued production of new work.



Management and investors feel they have an inalienable right to a growing share of any business in which they are involved. CEO’s get more because of their power to set pay, not because they increase productivity or possess skills in high demand.

When it comes to stock photography management tends to operate on the principle that more product and more customers are always better no matter what they must give up to get the additional customers. Consumers feel that everything they want should be free, or at the very least much cheaper than what they have paid in the past. And yet costs for producers have not declined significantly. In some case they may have gone up.



Those setting prices for photography are focused entirely on profits and compensation for capital investment. They give very little consideration to the well being of creators. Compensation for stock photos is widely out of balance with production costs. Changes are needed. With new technology such changes are becoming increasingly possible.

Photographers should have a right to give their photos away if that’s what they choose to do.  But those who choose to earn most of their living from producing images should also have a right to reasonable compensation for their time and expense provided they are able to supply customers with better choices than free images.

No Longer Need Stock Agencies

Image creators no longer need stock photo agencies to manage their collections. Photographers need to be able to post their images on a site that allows them:

1 – to set prices for each image use.
2 – to price their images based on how they will be used.
3 – to easily adjust the price for use of an image at any time.
4 – to receive compensation for each sale as soon as it is completed (think PayPal).
5 – to retain a larger share of the fee the customer pays than is the case today.
6 – to easily recover the name and contact information of every one of their image users in the event that there is a later dispute regarding use.
7 – to review their entire collection on the site at any time and to organize this review based on historical revenue each image has generated.
8 – to separately organize this review based on type of use.

Customers should be able to easily send a message to each individual creator and request information about a specific image, including negotiating usage fees.  By using the unique image number, the photographer should be able to adjust the licensing fee of each image at any given time.

Advances in technology have made all of the above possible. All that is needed is an organization willing to set up such a site. Naturally, that organization will need to be compensated for what they contribute which in one sense is something like a traditional stock agency, but it will function in a very different way.

Payments will be made electronically through something like PayPal. Rather than returning 100% of funds collected to the creator a percentage would automatically be paid to the organization operating the site – possibly 20% to 30% -- and the remainder immediately credited to the photographer’s account.

By cutting out the middleman this system would allow image creators to earn 4 times more for each image use (royalty of 80%  vs. 20%) without significantly raising prices to the consumer.

How It Could Work

Here how such a site could work.

1 – The site operator would collect images and require image suppliers to caption and keyword those images.
2 – Establish a basic minimum price for the smallest use and make it possible for each photographer to adjust the base number at any time.
3 – Outline a list of use types.
4 –Establish basic prices for each usage type as a “multiple” of the base number.
5 – Allow each photographer to change at any time the base number for an individual image, or all of the photographer’s collection. By being able to adjust the base number for each unique image the photographer can easily control the price for all different types of uses.
6 – On a separate customer searchable section of the site provide contact information for each contributor. In this way if the customer needs additional information about a photo, or wants to negotiate a better price, they can easily do so.

The following chart shows how this pricing structure might work.

	Use Type	Circulation	Multiplier	Base	Price
				Number
	Comp		0	0	0.00
Online Use	Only - No Print Uses
	Personal Use -Buyers	own non-rev generating site	1	5	$5.00
	Post To Other Site	Site generates revenue	1.5	5	$7.50
	Editorial Use		2	5	$10.00
	Educational	Power Point	3	5	$15.00
	Business Sites that	Generate Revenue
		Less than $100,000 annually	2	5	$10.00
		$100,000 to $500,000 annually	4	5	$20.00
		Over $500,000 Annually	6	5	$30.00
Print and	Online Uses	(both are allowed)
	Newspaper Editorial	PR under 100,000	25	5	$125.00
		PR 100,000 to 500,000	55	5	$275.00
		PR over 500,000	75	5	$375.00
	Magazine Editorial	PR under 100,000	35	5	$175.00
		PR 100,000 to 500,000	55	5	$275.00
		PR over 500,000	75	5	$375.00
		Cover	200	5	$1000.00
	Books	PR under 20,000	25	5	$125.00
		PR 20,000 to 200,000	40	5	$200.00
		Each additional 200,000	30	5	$150.00
		Unlimited	150	5	$750.00
		Cover	150	5	$750.00
	Brochure, Catalog	PR under 100,000	60	5	$300.00
		PR 100,000 to 500,000	90	5	$450.00
		PR over 500,000	125	5	$625.00
		Cover	200	5	$1000.00
Advertising
	Magazine	PR Under 50,000	70	5	$350.00
		PR 50,000 to 200,000	100	5	$500.00
		PR 200,000 to 1,000,000	150	5	$750.00
		PR over 1,000,000	250	5	$1250.00
	Newspaper	PR Under 50,000	50	5	$250.00
		PR 50,000 to 200,000	80	5	$400.00
		PR 200,000 to 1,000,000	100	5	$500.00
		PR over 1,000,000	150	5	$750.00
	Advertorial		30	5	$150.00
	Product Package		200	5	$1000.00
					.
Corporate	Use
	Editorial
	Distribute Externially	to public or customers	90	5	$450.00
	Distribute Internally	to employees	60	5	$300.00
	Annual Report		120	5	$600.00
Speciality	Uses
	Study Prints for	Educational Use	55	5	$275.00
	Trade Shows	Electronic or Print	100	5	$500.00
	Editorial Television		60	5	$300.00
	TV Commercials		120	5	$600.00
	Transit Displays		150	5	$750.00
	Billboards		200	5	$1000.00
	Point of Purchase		100	5	$500.00
	Apparel		60	5	$300.00
	Calendars		125	5	$625.00
	Greeting Cards		80	5	$400.00
	Poster for Sale		200	5	$1000.00
	Wall Art - Single image	for personal, private use	3	5	$15.00
	Wall Décor - Single use	in Corporate offices	40	5	$200.00
	Murals or Wall Décor	Multiple public display	60	5	$300.00
	Art Rendering		10	5	$50.00
	Artist References		2	5	$10.00
	Bank Checks		65	5	$325.00
	Credit Cards		65	5	$325.00
	Place Mats		50	5	$250.00
	Stamps		150	5	$750.00
	Playing Cards		60	5	$300.00
	Stationary		70	5	$350.00
	Puzzles		50	5	$250.00
	Exclusive Rights	Negotiate
	Time Limited	Negotiate

When presenting usage type information to customers, there probably needs to be a “more info” button after each usage type. By clicking this button, the user can get more detailed information about each usage with regard to the specifices of the types of uses allowed and those prohibited

This chart was built using a “Base Number” of 5.00. Each photographer should be able to choose a higher or lower personal Base Number and adjust it at any time. To determine what would be charged for various uses photographers should multiply their Base Number by the “Multiple” specified in the chart.

There also needs to be a way to allow Comp Use. We believe the best policy would be to allow unlimited comp use at no charge. Thus, the “Multiple” for comp use should be “0”. This would allow any user to download as many images as they want, as often as they want. However, it should be made clear in the documentation that no uses other than for comp are authorized. If the customer eventually wants to use the image for a project they must return to the site, pay the listed price for their planned usage and then download a new image file.

All Comp and Online Uses Only should be at a lower resolution than Print Uses.

Adjusting the Base Number on an Image-by-Image Basis

The multiples for different types would be fixed and unchanging for all site contributors. However, each individual contributor would be able to adjust the price by changing his or her “Base Number”.  This would make it possible for the photographer to charge different customers different price for the same type of use by simply changing the Base Number on a specific image for a specific sale.

Suppose the photographer has a few good selling images and he wants to raise the price on just those images. He could go in and change the “Base Number” on each of those images to something higher. His prices would automatically be raised on the images selected for all uses. The prices on all the rest of his images would remain at his standard “Base Number” price.

On the other hand, suppose the photographer has many images that haven’t sold for a long time. He would like to make them available at a lower price in hopes that some might sell. He simply changes the “Base Number” on those images to something lower.

Suppose the photographer has images he wants to make available for free use. Simply change the “Base Number” to zero and all usage types are now free.

Readjusting The Multiples

Some photographers may feel that the multiplier for certain specific use types are too high or too low. There is no way to change the multiplier and thus the price on just one use type -- say Brochure, Print Run over 500,000 -- without changing the prices on everything else. Given today’s market I think the multipliers I’ve outlined are reasonable, but if there is general agreement by a significant number of contributors that there needs to be an adjustment for certain usage types it could be implemented by the site operator in the following way.

I believe the site operator would need to have board of directors that makes this and other types of decisions regarding operations. At least 50% of the members of the board should be active, working photographers with images in the collection. There should also be sexual, racial and national origin diversity among board photographers. Keep in mind that there will be contributors to this site from all over the world.

When individuals have complaints or suggestions, they pass them on to the board. If there seems to be general agreement among contributors, the board can then institute changes.

How Such A Site Would Benefit Customers

One of the today’s big problems for professional users is that there are too many images to review. In addition, the customer has very little information about how the images are organized on the site

Before beginning a search on this site the customer will be required to do two things.

1 – Chooses a Use Type, including print run where applicable, that describes how they intend to use the image or images they might license.
2 – Indicates a Budget Range they would be willing to pay for such an image.

Suppose the customer is looking to use an image in a brochure with under 100,000 print run. She indicates that her budget is between $100 and $300. She will only be shown images that are in her price range, but various images shown might cost anything within this range. After performing a search, she will see two numbers – one that shows the total images returned with the search and another that shows all the images in the collection with the keywords indicated. Let’s say 700 images are returned and there are 50,000 images in the collection with the same keywords.

She can then review those offered, but if she doesn’t find what she wants she can change the search parameters. She would be happy if she could find the right image for under $100, but knows that no matter how great the image is she can’t afford to pay more than $300. At that point she can either change her range for the next search to $50 to $300, or $50 to $100. At $50 to $100 she will only see new images that photographers are willing to license for less.

Image returns will always be shown with the images that have generated the most money through licensing first followed by the images that have never been licensed based on how recently they were added to the collection. In this way the first images shown the customer are always those other users have found useful.

When reviewing search returns the customer will know that every image shown will be priced somewhere within the range specified, but not the exact price of any specific image until she opens an “image preview.”

The customer may want to review everything and be willing to pay whatever is necessary. In that case she would set her range at $0 to $2,000. The ones that have earned the most money, and probably the most expensive, will be shown first. The problem with this strategy is that most assuredly she will not have time to review all returns. It is certainly possible that a photographer who has produced the best image is also willing to give his image away for Free. In that case the customer should set the search range from $0 to $0. She will only see images available for Free and the returns will ordered based on the number of times each Free image has been downloaded.

If she sets the range from $0 to $1 the first images she will see are ones that someone has paid a little money to license. After all the images that have been licensed are shown the rest of the images that have always be available for free will be shown in the order they were uploaded to the site.

Customers should be able to put money into an account on the site similar to how they purchase subscriptions. Money could then be deducted from that account at any time as long as there is a sufficient balance. This could make payment for any given use easier for the customer than requiring that payment information be entered with each transaction.

Negotiations

Suppose a customer comes to the photographer and says, ”I really want to use image XXX, but I can’t afford to pay what you’re asking. Can we negotiate?” The two agree on a price. The photographer can then go into the site and change the BN on that particular image. The customer can then go to the site, purchase that image for the use specified at the agreed price and make an automatic payment. Once the transaction has been completed the photographer can return to the site and change the “Base Number” for any future sales.

Photographer Issues

Rather than seeking economic benefit from their creativity and work, many photographers seem to be happy to give their images away to others, including commercial users. Nevertheless, there are certain types of mages that are costly to produce and will not be produced unless the photographer is adequately compensated.

If professional photographers cannot earn a reasonable amount of money for their efforts, many images commercial user want and need that will no longer be produced or made available as stock images. The is particularly true of images of people, or images that require certain knowledge, expertise or unique access to produce.

If, in the future, commercial customers need such images, they will need to hire a professional photographer to produce them. That process will undoubtedly cost more, consume more of the customer’s time and result in a delay as to when the customer will actually receive the finished product.

But, if there is inadequate compensation such images won’t be available in stock photo collections. For such images to be available as stock some system needs to be developed to make producing stock images a profitable endeavor for photographers.

Not only does the photographer need to be able to search for all images in his collection that have been licensed at least once, but in a separate search he must be able to view all the images in his collection that have never been licensed. The photographer may decide to lower the BN on these images to determine if a lower price will improve usage. The photographer might may also discover that a few images seem to be very popular. He might try to earn more revenue from these images by changing the BN to 6 or 7. This system gives the photographer lots of flexibility in pricing use of each particular image in his collection. He is not required to stick with one standard price.

Other Issues That Could Be Problems

1 – One of the potential problems such a site will need to deal with is the practice of some photographers to upload multiple near similars of each situation. Given what we have seen on existing stock agency sites some photographers, looking for an advantage over their competitors, have uploaded dozens of very similar images from the same shoot situation hoping that because a larger percentage of their images will appear in any given search, compared to those of other photographers, customers will be more likely to pick one of their images.

To avoid such attempts to manipulate the search, or an unwillingness to edit, photographers should not be allowed to upload an unlimited number of images on a given day. Rather, new images should go into a new submissions queue for later upload to the main collection shown to customers. No more than 30 images a day from each photographer’s queue should be added to the major collection. The remaining images from a large submission will be added on following days until everything is on the main site. This will force photographers to do some editing and put the greatest variety of subjects at the top of any upload.

If the photographer submits 100 images one day the first 30 submitted will immediately go to the main collection and the remaining 70 will stay in the photographer’s queue. If the next day the photographer adds another 40 images to his queue, they will be placed in front of the 70 with the earlier date. 30 of these new images will be the photographer’s allotment for that day. The remaining 80 images will be moved to the main collection on following days.

The number of images that can be added on any given day is arbitrary and possibly should be higher than 30, but it should not be too large. To make search easier for customers it will be important to try to eliminate the redundancy of any situation. Newest images in the queue will always be considered ahead of older images.

2- One of the risks is that a customer will pay a fee to download an image for a small use and then make a larger use of the image which was not authorized based on the price paid. If the photographer discovers what he believes was an unlicensed use he should be able to easily check his historical data on the site to determine when the image was licensed and for what use. If the use does not match what the license allows then the photographer can easily make a claim.

In some cases, the organization paying for the use will be a graphic design firm working for a corporate customer. The photographer will most likely discovers an unauthorized use by finding the image on the end user’s website. The photographer can then contact the end user to determine who licensed the image on the customers behalf.

Why Such A Site Might Not Work

1 – The new site may not be willing to spend enough on advertising and promotion to get the word out to professional users that the site exists. Shutterstock spends about one-quarter of its annual revenue on advertising and promotion. Initially, a small percentage of the new site’s annual revenue may not be enough to get the word out. On the other hand, the important thing is to reach the relatively small percentage of professional users. These people are likely to understand the benefits such a site offers and be willing to pay extra for those benefits.

Shutterstock is chasing a massive number of very small users who purchase very little and are not willing to pay much.

2 – Not enough photographers will be willing to move their best-selling images from where they are currently to this new site. In fact, it may not be necessary to delete them from other sites because once they have made a few sales they will be more likely to be found on this new site and seen more frequently as the site grows.
 
3 - Many consumers have become so accustomed to getting any use they want for very low prices that they may avoid this site in favor of the traditional sites. They may not recognize the advantage of being able to find what they need more easily and quickly than on other poorly edited sites.

On the other hand, photographers could initially offer their images at low base numbers making them still very attractive to customers looking for cheap images. As sales grow each photographer would have the choice of possibly raising his base number and when.

4 – Certainly more and more images are being produced by people who live in low cost of living countries. If these people can produce everything North American and Western European customers need at lower prices, then maybe there is no longer a need for image creators in these higher cost of living countries. There will always be certain types of imagery that can be produced just as well in low cost of living countries as in the West.

For example, food photos, provided the photographer has access to the right foods, can be produced anywhere. Travel photos can be produced by photographers living in existing travel location. It is not necessary for Western photographers to produce such images, although it is possible that a visitor might have a better understanding of what Western tourist want to see.

On the other hand, news photos must be produced where the news happens, and the newsmakers are located. Lifestyle photos that show how people are living in a certain environment need to be shot in that environment. It is theoretically possible that sets could be built in other locations and proper models and clothing imported, but that may be more costly for a foreign photographer than one who lives in the right location.

Photographers who are producing images that can only be produced by someone living in that location should be paid enough for their efforts that they can justify production.

5 – Finally, there is a real possibility that in the very near future Artificial Intelligence (AI) will make it so easy and cheap to create a high percentage of the images commercial users need that stock photography will no longer be a viable business for producers. (See this story https://www.selling-stock.com/Article/will-ai-kill-stock-photography )

To the degree that that happens, there may not be enough time for the site as I have outlined it to grow and gain traction.