Two or three years ago, there was a big push by the major portals to expand the number and variety of images on their sites. In addition, the big three started producing more wholly owned images. Production companies were asked to produce more and in several cases, groups of photographers, both in Europe and the U.S., banded together to start new production companies.
The number of images on the major sites grew at a very rapid pace. So did the number of brands represented by the major portals. Virtually all the new production was aimed at expanding the people, lifestyle and travel categories. Sales increased somewhat, but not nearly as fast as new content was being added.
No sooner had they added all these new images, than they changed strategies again. The major portals decided they had an oversupply. They concluded that some customers were turned off because there were too many images to wade through. (It's interesting that Alamy, the portal with the greatest 2007 revenue growth, also added, by far, the greatest number of new images during that year.) The major portals began editing many of the third-party collections, dropping images and limiting what they could add. They also refused to accept some of the brands they had previously encouraged to produce.
Because of production time lags, images didn't come available until after the portals had decided to start cutting back. As a result, a number of production companies now find it difficult to place images, produced by very experienced photographers, on enough portals to generate enough income to offset costs.
This is leading to three things:
1. Many companies, even ones with established positions on the major portals, have stopped producing new images.
2. Several RF companies are trying to sell their collections.
3. Those trying to sell are finding they must lower their asking price below last year's. And even then, it is very tough to find a buyer.
We have heard that some brands with 10,000 to 12,000 images in their collections are being offered for prices as low as $20 to $25 per image.
What's Likely To Happen?
At this price point, it seems likely that many good images are going to end up in microstock. Â This is not to say that there aren't already some very high quality images available at microstock prices. But the infusion of more, professionally shot, will make microstock collections even more attractive to commercial buyers. And the images will be available to hundreds of thousands of customers who would never have considered buying an image from a traditional agency at traditional RF prices.
One thing needs to happen before we see a rush in this direction. Traditional distributors must to turn a blind eye to the fact that some images available on their sites are also available on microstock sites at much lower prices. A few are.
In particular, traditional RF sellers are encouraging microstock photographers to allow them to sell the same images the photographers are marketing as microstock on their traditional portals at much higher prices. The microstock photographers are not being forced to choose between microstock and traditional, but are being allowed to sell the same images in both places at both price points. Getty, Corbis and Jupiter are unlikely to ever agree to this, but others probably will. I predict this trend will grow quickly.
Thus, in their effort to limit the number of images and make searching easier for customers, the traditional sellers may be strengthening the competition that is cannibalizing their business.