Stock Photo Agencies: Outlived Their Usefulness

Posted on 12/27/2018 by Jim Pickerell | Printable Version | Comments (2)

The stock photo agency system that began to mature in the 1980s and 1990s has outlived its usefulness for photographers. Prior to that time there were small agencies that generally operated in a single country and specialized in a certain type of photography. For the most part their customers were magazines and book publishers. In the early days, advertiser seldom used stock images because they tended to believe the quality was poor and the type of imagery they needed wasn’t usually available in the stock collections anyway.

In this early period agencies carefully reviewed and edited a photographer’s work choosing to add the photographer’s submissions to their collections. Getting accepted for representation was not easy. The agencies were only looking for experienced photographers who would produce quality work on a continuing basis. Agencies incurred significant expense in storing and cataloging images and they didn’t want to deal with work that customers would not be interested in licensing. If no one licensed the work the agency’s efforts and costs would be wasted. Agencies also spent significant time trying to guide their photographers as to what was in demand and what to shoot.

When Art directors in New York, and I’m sure other major cities around the world, needed an image they would often hop on the subway and go to the agency’s offices in order to search the agency files themselves for original transparencies or B&W prints.

Agencies maintained staffs of picture researchers. Many customers would call and describe the project they were working on and the type of image they thought might work to illustrate their project. Experienced researcher, familiar with the files, would then make a selection of a limited number of the best images available at the time and ship them, either by messenger or mail, to the art director for consideration. Often the best image in the agency’s collection might not be available in the files on the day of the request because it would have been sent out previously to another client who was at that time considering using it. Once the art director was finished with the images they would be returned to the agency so they could be made available to other customers.

In New York art directors often called several agencies simultaneously, gave them the same pitch about what they needed, and then sat back and wait to see what came in. Meanwhile, the art director could get on with her other work.

Once accepted by an agency all photographers had to do was keep sending in their transparencies. The agency would edit, catalog, incur the expense in managing its file and marketing to potential customers. The agency would pay the photographer 50% of any revenue generated through licensing.

Print Catalogs

As the interest in using stock grew agencies realized that they needed a better way to promote their collections and let potential customers who didn’t live and work in the major cities where the agencies operated know what they had to offer.

They began to produce print catalogs that showed some of their best pictures in the major demand categories. They also made duplicate transparencies of the catalog images selected. Thus, in the event that a customer liked and wanted to use one of those images they could ship the dupe transparency to the customer and retain the original in the home office.

It was soon discovered that the catalog images often became the agency’s best sellers. Customers would find what they needed in the catalogs and not bother to request to see anything else. Since the agencies were delivering dupes, not originals, the agencies could license the same image to many different customers simultaneously.

The images in the catalogs usually represented way less than 1% of the total images in the agency’s collection. Nevertheless, it was not uncommon for these images to generate 50%, 60% or even 70% of the agency’s gross revenue.

The big agencies would put out a new catalog of several thousand images annually. By the mid-90s many of the major advertising agencies had shelves lined with these annually produced catalogs from many different agencies. When the art directors needed an image they would simply search the various catalogs until they found something that worked. For many buyers the other images in the agency files no longer existed. Certainly, they weren’t relevant.

The catalogs cost a huge amount to produce and distribute. It became common to charge photographers a per-picture fee to have their image included in a catalog. However, since the likelihood of a sale was so much higher for pictures included in a catalog compared to those that were just accepted for the general file, photographers were usually more than happy to pay the catalog fee. The fees photographers paid usually covered most of the cost of producing and distributing the catalog, but photographers were still only paid a 50% royalty of any license fees.

International Distribution

As collections began to grow, more and more customers began to see the value of purchasing a stock image rather then hiring a photographer to go out and shoot exactly what they needed. Agencies began to realize that there were customers in other parts of the world who might also be interested in licensing rights to some of the pictures they had in their collections. However, in many cases the agencies didn’t speak the language of these customers, or have the local contacts.

Once the catalog system was in operation agencies realized that they had the potential to increase sales by supplying other agencies with copies of their catalogs and sets of dupes. These local distribution agencies would handle all the marketing and licensing for the agency that collected the images. The distribution agency would pay a fee for the catalogs and dupes and then keep a percentage of any licensing fees they could generate.

The percentage the distribution agency retained was usually in the 30% to 50% range. They would then remit the rest to the parent agency who would spilt their share of the sale with the photographer. For example, if the distributor licensed the image for $100 they would keep $30 and remit $70 to the parent agency. The parent would then give 50% of what they received to the photographer who would receive $35 for a $100 sale.

In some cases, the prime distribution agency in Europe would also send out a few catalogs and dupe sets to other distributors who would handle the sales and marketing in smaller, more local areas. When this happened there would be a third cut before the photographer’s royalty was calculated.

Eventually, some of the larger parent agencies were able to have as many 200 distributor representing their work worldwide and distributed as many as 300,000 catalogs annually to image buyers worldwide.

Royalty Free

Prior to 1992 the prices charged to use a stock image was usually based on how the image would be used. For example, in the U.S. a quarter page use in a brochure with 100,000 print run was $350. A full page use was almost double that. A quarter page use in a magazine with 50,000 circulation was $225. Use of the same image in a major magazine with over 3 million circulation was $450.

This traditional strategy of paying a fee for every separate use of an image became known as Rights Managed (RM) licensing.

In 1992 Eastman Kodak company introduced the Compact CD-Rom optical disc system making it possible to deliver digital files of images on CD-Rom discs rather than delivering a piece of film.
Several companies began putting digital collections of between 50 and 300 images on a single CD-Rom and selling the discs for prices that ranged between $200 and and $300 each. Those who purchased the disc were allowed to use any of the images on the discs as often as they liked, forever, with virtually no limitations as to where or how they could be used. These images were said to have a Royalty Free (RF) license.

One of the early leaders in RF marketing was PhotoDisc. In order to market their collections, they found that they needed to produce and distribute huge numbers of printed catalogs that showed some samples of the images that appeared on each disc. Given the costs of digitizing the images, placing the image files on the discs and the production and distribution of the catalogs there wasn’t much left for profit at the price PhotoDisc felt they needed to charge customers. As a result, PhotoDisc owners determined that they could not afford to pay image owners more than 20% of the revenue received from the sale of the discs.

Since the disc producers had no idea which, if any, of the images would actually be used when a disc with 100 images on it was sold for $200 they allocated $40 (20%) for the image owners to share. If a particular photographer had only one image on a discs (which was actually the case in some instances), the photographer would receive $0.40 for each disc sold. Over a period of years that image might be used on the cover of a magazine or in multiple marketing promotions for that single $0.40 fee.

It is important to note that these huge initial costs for the early developers of the RF marketing strategy were how the 20% royalty rate for the licensing of RF images was established. Later, it would become much less costly to market and distribute RF images and an increasing percentage of the cost was passed on to the image creator, but the royalty share of any licensing fee remained at 20%. (In some cases in the last few years it has been dropped to 15%.)

Obviously, with the wide price variations between the RF and traditional RM, customers could now justify the purchase of a RF disc even if they ended up using only one or two of the available images. Often customers purchased many disc without any specific plan to use any of the images. They simply amassed large collections of particular subject matter in order to have the images available for use at moments notice.

In 1995 PhotoDisc began making their image collection searchable on the web. At this point customers could purchase just the image they needed when they needed it. The price varied based on the file size needed.

In 1997 Getty Images acquired PhotoDisc and began to not only improve the quality of the RF offering, but steadily raise the price to license individual RF images. Customers no longer needed to own and maintain a huge collection of digital images they might never use. Now they could easily purchase only the images they actually needed, when they needed them.

Nevertheless, the company still paid contributors 20% of the gross fee charged to use the image rather than the higher 50% that traditional sellers would pay if one of their RM images was used.

Getty began to steadily raise the RF prices, but for the most part they were less than half the price of similar RM images for most uses. However, the big advantage for customers was that with RF they had much more flexibility in how they could use a given image than was the case with RM.

Getty tried to argue that the RM images were of “higher quality” than RF, but there were some very good images in the RF collections and that argument didn’t influence many customers. By 2006 the average RF images licensed for about half the price of an RM image, but Getty licensed about twice as many RF images as RM so the two collections generated about the same amount of revenue.


In the early 2000’s, as Getty and other sellers pushed RF prices up, many customers who had become accustomed to using the early, cheap RF offerings started to complain that stock images were too expensive. This was also about the time that the “sharing economy” and the idea that “everything on the Internet should be free” began to take hold.

To counter price increases iStockphoto (now iStock) was founded in 2000. Many graphic designers who had either purchased all rights to images they used for their projects, or shot images themselves for such projects, started uploading images they no longer needed to iStockphoto. Other Internet users were encouraged to download the images and use them for free.

Since many of the customers who were the early driving force behind iStockphoto were graphic illustrator, illustration as well as photographs because a big part of microstock offerings. Today, nearly one-third of all the images licensed via microstock sites are illustrations, not photographs.

It soon became apparent that some people uploaded a lot of images, but seldom found anything they wanted to use while others were getting everything for free without ever contributing anything. At this point iStock found they needed to cover its site operating costs also curate their collection to some degree. They began offering a service that only allowed approved contributors to submit images to the searchable collection. Anyone who wanted to download an images was required to pay a small fee. A portion of that fee was shared with the image creator.

In 2003 Shutterstock launched a similar site and in 2004 Fotolia (now AdobeStock) and Dreamstime launched their sites. All the sites accepted images non-exclusively. Many photographers placed the same image on all these major sites as well as many other smaller microstock sites.

Prices were usually based on file size needed. Customers could purchase images on an image-by-image basis whenever one was needed, or they could purchase a subscription which allowed them to download a fixed number of images per month for a single monthly fee.

In February of 2006 Getty Images purchased iStock, but they have continued to operate it as a separate company rather than integrating the two collections.

As the Internet grew there has been more there was more and more demand for images that could be used in Internet projects. In general companies have tended to use more images on the Internet than they did when the only types of marketing and communication projects were in print. Consequently, for a number of years there was steady growth in the number of images used. Most of that growth was of low priced Microstock images. Microstock has steadily taken market share from the higher priced RM and traditional RF collections.

In 2007 through the end of the decade Getty tried to raise microstock prices by offering premium collections of microstock images. They had some success with this strategy. These images were exclusive to iStock. Accepted contributors where given a higher royalty rate than the non-exclusive contributors. It was much more difficult for photographers to get their images accepted into the premium collections than into the general file.

Shutterstock stuck with one flat, low price for everything.


Then came the 2008 economic downturn. All users were looking for the cheapest images they could find. That drove many to Shutterstock -- and to a degree the other microstock companies. Getty tried to maintain its higher prices in both its traditional collection and iStock, but Shutterstock continued to take more and more market share.

Around 2010 to 2012 Getty made efforts to lower its prices and make other adjustments in order to hang onto market share. While the number of images they licensed annually continued to grow that growth in usage has been at a much slower rate than Shutterstock’s. In addition, gross revenue for Getty began to decline, particularly in terms of the revenue generated by RM and traditional RF sales.

Finally, around 2015 Getty basically threw in the towel and started licensing more and more of its images to its major customers via Premium Access deals. These customers began getting the images they needed at prices very similar to Shutterstock’s -- often even lower.

Also, in late 2014 Adobe acquired Fotolia the third largest Microstock company at the time and created AdobeStock. For more about AdobeStock check out these stories here and here.

Throughout the period since 2008 image creators have been asked to do more and more in the way of keywording and preparing their images for upload. In addition, there has been a huge push by all the major distributors to get more and more images from more and more suppliers. As a result, the average creator has been forced to work much harder and uploaded many more images in order to have any hope to stay even in terms of revenue generated. Very few has seen much revenue growth from the extra effort.

Currently, at least 98% of the images licensed worldwide are Microstock, or images from the traditional Getty Images collections that are licensed for less than $10 (Photographers receive 20% to 30% of that figure).  

At the same time the market for stock images has plateaued. In the first decade of the 2000s, and for a certain portion of the second decade, there was substantial growth in the number of images used worldwide due to the increasing use of the Internet for communications and marketing. However, by 2014 or 2015 virtually all potential users of “licensed imagery” had been reached. (See this chart of Shutterstock sales.)

There may continue to be more people uploading images, and more uses of FREE images, but the number of professional users willing to pay even $1.00 or so for an image is flat and may be declining. (See Shutterstock) Professional users tend to use about the same number of images every year. Supplying these customers with more choice doesn’t mean they will buy more. The only way to really sell more images is to find new customers who have never heard of stock photography and convince them that they should spend money to use your images other than other options that might be available to them.

No Significant Number Of Such Customers Exists.  

The average photographer who was contributing to Getty’s Creative collection in 2006, or before, (See Getty sales records) now earns less than 10% of what they earned in 2006 (assuming they are still contributing). Obviously, since the expense and work required to create marketable images is as great, if not greater, than it was in 2006 many of the best creators have long since stopped producing new images as a way of earning a portion of their living. They have moved on to other lines of work.  

Secondary Agencies

I’ve talked a lot about the major agencies, but aren’t there a lot of secondary, smaller independent stock image distributor still selling images, and paying higher royalties?

Yes, there are. But many of them are struggling and an increasing number are going out of business. Here is a story that lists 139 agencies that have at least part of their collection represented by Getty.

The problem for many of these suppliers s that Getty represents a significant portion of their revenue. If you as a photographers are represented by one of them then in those rare cases when one of your images is licensed, you give up an additional royalty share compared to what would have been the case if the image was represented directly by Getty.

Given that Getty’s prices are so low, it has become increasingly difficult for any professional image user to justify going anywhere other than Getty Images, Shutterstock, iStock or AdobeStock to look for images. Independent agencies that try to charge higher prices make fewer and fewer sales. When they do make a sale, it tends to be for very low prices.

More and more smaller distributors are going out of business. As I discussed in the International Distribution section of this report there used to be a lot of small distribution agencies around the world that acted as local sellers for the few majors that had amassed big collections and produced regular catalogs. In the last few years many have disappeared.

Another problem with the secondary agency system is that when sales decline, and in order to keep the doors open, some will delay royalty payments hoping for a recovery. For a while they may cut staff and other costs. Finally, when that recovery never comes they just close their doors and walk away. Unfortunately, if the money owed is a relatively small amounts and the selling agency is located in a country other than that of the parent, supplying agency there really isn’t much to do to recover lost revenue.

Any type of legal action would be very expensive. In most cases by the time it is recognized that the agency isn’t paying royalties in a proper manner there is no money left to recover.

Given the high percentage of current sales that are microstock it may be more lucrative to switch from dealing with the traditional companies to microstock. But the microstock prices are so low that such a strategy may not be worth the trouble. For more about microstock sales check out these stories here and here.

Where Does The Industry Go From Here

Price increases are needed, but it seems highly unlikely that any will be implemented given the way the market is currently structured.  Each of the three major agencies fears that if they raise prices they will lose market share to the other two. As long as these three control a significant percent of the quality content being offered no other seller will be able to demand higher prices and make any significant number or sales.

Consequently, it seems very likely that all three of the industry leaders will continue to cut prices and royalties in an effort to hang onto their market share and eke out a profit.

In order for Image Creator to prosper there needs to be a new system that makes it much easier for creators and customers to deal directly with one another and cut out the middlemen.

There needs to be a single central website (something like a Google for photos) where all image creators interested in earning revenue can place their images for customer consideration. Ideally, the operator of the website should be a non-profit organization with a board of directors made up of creators.

When a customer finds an image they are interested in licensing, it must be possible for them to quickly determine the price. Each image creator should be allowed to establish his/her own prices. Customer must be able to easily complete payment for any use online. Once a payment has been made the customer is provided with a link that makes it possible to easily download a hi-resolution file of the chosen image. The money paid should be instantly credited to the creator’s own bank or PayPal account after a certain percentage is deducted to cover the cost of operating the website.

The pricing problem could be solved by setting up a variety of standard pricing templates from which each photographer might choose. The photographer would then input his or her own prices into a template that is linked to just the photographer’s images on the site. The photographer should be able to adjust these prices at any time. If the photographer wants to license some image for less than others the photographer may set up multiple accounts placing the more expensive images in one account and the less expensive in another.

The pricing templates could range from very simple to more complex ones that mirror to some degree current RM pricing systems. Creators should recognize that the more complex the pricing system, and the higher the prices, the fewer sales they are likely to make. Customers will need to be able to limit their searches to only images available below a certain price.

There should also be an option for customers to contact the photographer directly for custom negotiations if the photographer wishes to grant such an option.

The site should only contain images that require monetary compensation for use. A separate site, or multiple sites, might be made available for free images.

Since the site where compensation is required will likely contain many more images than will ever be needed, or licensed by any customer, there needs to be systems that enables customers to easily find the images that previous customers have found most popular. Keywords, and some of the systems currently in use (See Alamy), will help solve of this problem.

Customers should be able to stipulate that they are only interested if reviewing available images below a particular price point, or in a particular price range.

Customers should be able to limit their searches to only images licensed in the last 3 months, six months, year or ever licensed.

Customers should be able to search for only those images that had been uploaded in the last 3 months, six months, year or for images that had been available for licensing for longer than a year. They should also be able structure their search to only find images that had been on the site for more than 6 months and never licensed.

There may need to be additional strategies for automatically sorting images that are not currently in use. (See following stories)
There needs to be a system for automatically removing images from the primary search and placing them in a different, historical, category if no one has shown an interest in the image for one year or five years from the date submitted. If photographers still want their image to be available for consideration then he/she should be able to find the image data and update the submit date.

The technology to make all this happen is already easily available. Photographers are already doing virtually everything necessary to prepare their images and upload them to such a website. There is no longer a justification for much of the middleman cut.

There may need to be additional human curation of the collection to make it work efficiently for customers. To the degree this is required an additional share of all sales may need to be deducted in order to cover such costs. If the organization operating the site is non-profit then this fee should be minimal.

It is highly unlikely that such a system will be established. The big 3 will fight this move all the way because it would tend to destroy their businesses.

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, 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:  


  • Waring Abbott Posted Dec 27, 2018
    Jim, a very well thought-out and lucid analysis of the disaster that is the stock "business". I wish that there were a workable way out of all this but with the "race to the bottom" we are effectively finished. The Shutterstock sale to WalMart of an unlimited use photo sums it up:
    Photog Shocked After His $1.88 Stock Photo Shows Up On Walmart Goods.

  • Macintosh Smith Posted Dec 29, 2018
    Very good article Jim!

    In response to your comment:

    "There needs to be a single central website (something like a Google for photos) where all image creators interested in earning revenue can place their images for customer consideration."

    ...Isn't this what has tried to establish?

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