Raising Prices By $1.00

Posted on 1/9/2018 by Jim Pickerell | Printable Version | Comments (0)

It is hard to find a stock photographer who has been in business for any period of time who can point to rising revenue per-image-licensed. Some who have dramatically increased the size of their collections may be able to point to overall annual revenue growth, but not growth per-image-in-the-collection.

Prices for the use of stock images have gotten so low that it wouldn’t take much to dramatically increase the revenue the industry generates.

Let’s look at a few numbers. Roughly Shutterstock will have licensed rights to about 170,100,000 still images in 2017 for a total of about $480 million.  

I believe the total images licensed in 2017 by all stock agencies worldwide was around 500 million. This included illustration which may represent one-third of the still imagery licensed. It does not include footage and editorial imagery that is used primarily for news purposes.

Unfortunately, we have no accurate information on the number of unique images that were licensed, but it is certainly a small fraction of the 500 million because a significant number of those uses are licensed multiple times by a variety of different users.

I believe the total revenue generated by stock agencies from the licensing for 500 million still images was about $1.6 billion. This is only stock agency revenue and does not include sales that individual creators might have made directly to customers. There is no way to determine the number of commercial transactions of this type that might have occurred.

Together Shutterstock and Getty Images generate about 60% of the $1.6 billion in revenue. Combined, all the other agencies worldwide generate about 40% of the total revenue.

Thus, the average price per-image licensed is about $3.20. The creators receive a royalty share of this number, in some cases as low as 15% ($0.48) and in many cases around 30% ($0.96).

A small percentage of the images are licensed for prices much higher than $3.20. In some few cases the price for the use of one image can exceed $1,000, but the number of sales for less than $3.20 brings the average down.

Unfortunately, when images are licensed at these low prices no distinction is made regarding the uniqueness, the cost of production or the popularity of the image. In most cases no distinction is made as to how the image will be used.

Raising Prices $1.00

If the average price per-image-licensed were raised only $1.00 think what that would do to the gross annual revenue of the industry. Instead of industry revenue being $1.6 billion it would be $2.1 billion, a 31% increase.

Can commercial customers who are currently paying $1.00, $2.00 or maybe $0.30 really not afford to pay $2.00 or $3.00 of $1.30 for the images they need? Will the stop using as many images because the high price of images will bankrupt them?

Maybe they can’t afford such a price increase. For those currently paying less than $5.00 for images maybe we should only add a $0.50 premium. For those currently paying more than $5.00 the price should then be raised $2.00. Are those currently paying $10 for images are they unable to afford $12.00?

The important thing to note is that given how low prices have fallen we don’t need a dramatic increase in prices. We don’t need to get back to where prices used to be. (That will never happen.) We just need to get some movement in the right direction.

Copyright © 2018 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 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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