Random Thoughts 124

Posted on 9/21/2006 by Jim Pickerell | Printable Version | Comments (0)

What Are Photographs Worth?

Recently, I was talking to a very experienced assignment photograph who has been in the business for more than 20 years. He made a point worth sharing.

He said, "One of the hardest things for photographers with some experience to come to terms with is that what we produce is not worth as much as it used to be."

This is something photographers don't want to believe. They have worked hard at developing their photographic skills and at developing new digital skills as they transitioned from film to digital. They have taken financial risks, lived frugally and invested much of their profits in growing their businesses. And yet what they produce now is not worth as much as it used to be.

Here are a few reasons why.

  • There is huge oversupply of imagery easily available as stock. This not only hurts the market for stock, but makes it easier for many customers to buy stock rather than making an assignment.
  • Digital equipment has made it much easier for customers to produce many of the images they need on their own rather than hiring a photographer.
  • Graphic designers with the artistic skills to understand what makes a good picture, and the knowledge of the kind of pictures they need now have the capabilities, through technological advances, to produce many of the pictures they need themselves. In addition they can easily sell their photos on the micro-payment sites. Often they produce pictures, not with an eye to earning significant money, but as a creative challenge, and a small supplement to their major source of income - graphic design.
  • Many people have learned how to use Photoshop which enables them to start with a less than perfect image and turn it into something that is ideal for their needs.
  • The biggest users of still photos has always been print publications, but the proliferation of new marketing channels has diminished the impact and importance of print marketing, and it is not at all clear that these new marketing channels will make extensive use of professionally produced still photos.
  • The use of photos on the Internet is growing, but photos of lesser quality are often more than acceptable for Internet use. In addition budgets for content used on the Internet are very low, so very often Internet customers cannot afford to pay photographers what it costs them to produce pictures.
  • The Internet has enabled huge numbers of amateurs to participate in the professional market further diluting the chances of professionals generating revenue.
  • The web has changed everything for advertisers because it is now possible to make much more precise measurements of the results of any ad spend.

    Some things to think about.

    Some Thoughts About Microstock

    I discussed the air conditioning repairman photos at the bottom of Story 873, but I'd like to supply a few more details because the point is worth emphasizing.

    Recently I heard of a customer who was looking for a picture of an air conditioning repairman working on a home system to use in a small yellow pages ad. I thought it would be interesting to see what was available. I used these keywords on Getty and they had one picture of someone working on a large industrial system. Corbis had three pictures, two on industrial systems and one very nice one on a homeowners system. Jupiterimages had nothing. Then I went to iStockphoto. They had 20 images, all taken on the same shoot of two guys working on a home system. One of iStock's images had been downloaded 171 times and the total downloads for all 20 images in 16 months was 829.

    While I think they are good images of the subject matter it seems likely to me that if the iStock photographer had shown her images to editors at either Getty, Corbis or Jupiter she would have been blown off with the comment, "The subject is not something our customers need."

    I am also amazed that there are so many customers out there interested in using this subject matter. The Big Three focus on all the classic "high demand" subjects that have been selling since the print catalog era. They keep adding more and more redundancy of basically the same picture. Maybe there are a whole lot of other things buyers want. And maybe a very high percentage of those buyers need photos at a different price point than what we want to sell RM and RF.

    It is interesting to contemplate how many buyers there are out there and what they might need at what prices. Last year Getty sold between 1.5 and 1.6 million single image licenses. IStockphoto had 5 million downloads (licenses). In 2006 Getty will do about the same volume, maybe up slightly, but iStock expects to double its volume to 10 million. Will that be the peak, or are we just seeing the beginning? Certainly, we are very near the peak for RM and RF. One of the unfortunate thing about our industry in the past is that we have no idea how many uses have been made of images on CD-Rom discs.
    It is generally accepted that it may be an average of 2 or 3 per disc. But what if it is 100 or more and there is all this usage that we never knew existed?

    The woman who took the air conditioning repairman pictures is Lisa F. Young. She started putting images on iStock in January 2005 and loaded her repairman pictures in April 05. She has a total of 1653 pictures on the site now. Her pictures have been downloaded almost 27,000 times for an average of more than 16 times for every image she has posted. Given her number of downloads she now gets a 40% royalty for each download. It is believed that the average price buyers are currently paying for iStock downloads is $2.00. This would mean that Lisa may have earned something in the range of $20,000.

    She has also probably made more that $500 from the air conditioning pictures in 16 months. And if there was that much demand in a little over a year there will probably be a more in the years ahead. I don't know this for a fact, but she may have shot these pictures on assignment. Then, once she had the photos, posted them on iStock to see if they could generate any more revenue. Put it all together and it is not too bad for a half-day job for many people. The point I want to make is that maybe some people can make it on low prices and volume. It won't be the kind of money many of us expected in the past, but it seems likely that those big ticket sales we used to expect and hope for are going to become fewer and fewer.

    It also may be time to begin thinking of "stock" as we did 30 years ago - as residual income from images generated on assignment. Once you've got the digital files generated on an assignment, it doesn't cost much more to upload those files to a site like iStock in hopes of making a little extra cash. Certainly the micro payment sites are going to get a lot of images from photographers with this attitude.

    GDUSA Survey

    In its 20th annual Stock Visual Survey Graphic Design USA has found that 94% of its readers use stock and 74% said they are using it more often than they have in the past. Only 4% said they are using it less often.

    It was also interesting that when asked the subject categories creative professionals used most often People/Celebrities dominated the list with 35% more responses than the nearest runner-up. In the past several years People/Celebrities, Lifestyle and Business/Industry have all been very close together at the top of the list.

    Not surprisingly, 89% of buyers find their images by going online and this has been steadily climbing over the years. Only 5% now say they use an agency rep.

    Not only did 91% say they use RF compared with only 55% who ever use RM, but more than 2/3rds of the respondents said they spend more total dollars for RF than they do for RM. This was a significant jump in the allocation of dollars from the previous year.

    One of the biggest long range concerns for photographers is that the survey discovered that 36% of creative professionals have signed up for one or more of the photo-subscription services and 36% have also tried micro payment sites. This would indicate that a very large percentage of traditional customers are already comparing the micro payment offerings with traditional offerings and using the lower priced option when appropriate. If that big a segment of the market is already using micro payment it seems likely that many of their friends and colleagues will start looking at this option in the near future.

    These figures really don't square with Getty's contention that only 8% of its customers use iStockphoto. Either a lot of the GDUSA subscribers use other micro-payment and subscription services, or they are not on Getty's customer list.

    Other Micropayment News

    iStockphoto has announced that has almost one million members. It is unclear how many of those members have actually supplied photos. One would assume that most of the members are image users.

    Jon Oringer, president and founder of Shutterstock, estimates that the "sweet spot" for his site's shooters is $500 to $1,000 per month though some make as much as $4,000 monthly.

    On iStockphoto (and many of the other micro payment sites) a good portion of the editing is done by other image sellers who have a lot of experience on the site. This cuts overhead, but may result in very inconsistent editing and some images being rejected because they compete with images belonging to the editor.

    Magazine Closings

    Time Inc. has closed Teen People magazine, but its web site, www.teenpeople.com will continue. Fifty sales and editorial employees will be cut, but it is not clear whether some of them will be repurposed for the site. Producing magazines is much more expensive and labor intensive than managing web sites. And if you're trying to reach teens; where are they?

    Teen People's advertising pages fell 14.4 percent in the first six months of 2006 and their circulation had been declining over the last three years.

    Hachette Filipacchi Media also announced in April that it plans to close Elle Girl magazines, but it will continue to publish the brand's content online.

    Getty Images Adds AP Video

    Getty Images has entered into a distribution partnership with AP to represent its news, sports, entertainment and historic footage.

    In another recent deal Getty signed Discovery FootageSource, a collection that includes video from the Discovery Channel and Karen McLaughlin, director of image partner development at Getty Images, said Getty has added eight new collections to its film portfolio this year.

  • Copyright © 2006 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 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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