If there is going to be a business of producing and licensing rights to stock photos five or ten years from now, the industry needs a serious re-design. There are at least five areas that need serious modification if the industry is to include anything other than User Generated Content (UGC), or if there is to be revenue growth.
The areas are:
1 – Pricing Floor For Certain Imagery
2 – Simplified Pricing
3 – Better Actionable Data Related To What’s Selling
4 – Curation
5 – Central Database For Small Collections
1 –
Pricing Floor For Certain Imagery – For a segment of the images in the marketplace there needs to be a reasonable floor price per-image for even the simplest of uses, no matter how great the volume of the customer’s use.
A floor price of even $5 or $10 may not seem like much, but it is much better than what we have now. Getty licenses a significant number of images from its RM and RF collections for much less than $5.00. The volume of sales at these prices does not come close to covering the cost of production, and still a huge percentage of the image in the collection never sell. Since Getty is by far the largest distributor in the industry their prices tend to force down the prices of everyone else.
There some smaller suppliers that maintain higher prices, but their sites are not a first stop for most customers. Many of these suppliers also make their images available through Getty so there is even less need for the customers to seek out the specialist sites.
Producers have costs and if they can’t cover the costs and make a little profit they eventually stop producing. Yes, there are a lot of UGC producers who will continue to take pictures for the fun of it. But even for them, effort is required to get the image into the marketplace. And that’s not the fun part of taking pictures. These people will continue to take pictures, but eventually they will get tired of trying to sell their pictures when they receive little of no money for the additional work required after they produce the image.
Once a floor is established, I would expect it to slowly rise. But it must become clear to users that if they want images produced by photographers who expect to be compensated for their work there is a minimum price they will have to pay.
There will continue to be UGC content available for less, or free on other sites. If the customer doesn’t want to pay at least the minimum price they can continue to search the UGC collections for the images they need. But such searches will require a huge amount of the customer’s personal time and they are unlikely to be able to find anything of similar quality.
2 –
Simplified Pricing – The Rights Managed (RM) pricing strategy will disappear. Like the typewriter and the horse and buggy, RM has out lived its usefulness. Over 99% of all images licensed are currently licensed under some type of Royalty Free (RF) simplified license.
Today’s customers want a simple procedure for establishing what an image costs. They also want to be able to use any image they purchase in a variety of ways without restrictions. Part of this is due to the cost of tracking individual uses, part is due to the variety of ways a given image can be used compared to 20 or 30 years and ago and part is due to the general time pressure most customers are experiencing. In any event more and more customers are insisting on RF licenses and simply never look at the images in a RM collection.
While RF licenses vary slightly, a good model may be the current Stocksy license. All images in the collection are available for the following commercial uses:
- Advertising, blog posts, inclusion in websites, annual reports, editorial, design elements, book covers, product packaging, etc.
- Up to 250,000 copies in print
- Unlimited electronic impressions (web, ebook, etc.)
- Worldwide, all media, unlimited time
The price varies based on the file size needed
| Small |
0.5MP |
$15 |
| Medium |
2MP |
$30 |
| Large |
5.7MP |
$75 |
| XLarge |
12MP |
$125 |
| |
|
|
| Additional Fees Above Base Price |
|
|
| Multi Seat |
|
$100 |
| Printing more than 250,000 copies |
|
$300 |
| Products for Resale |
|
$500 |
In addition, Stocksy offers the following “Market Freeze” licenses that grants exclusive rights to use the image for the selected period of time. No one else can license that image during the Freeze period.
| Six months |
$1,250 |
| 1 Year |
$2,500 |
| 2 Years |
$4,500 |
| 3 Years |
$6,000 |
| 4 Years |
$7,500 |
| 5 Years |
$9,000 |
In a Market Freeze the image will be removed from the market and not sold again. However, if a another customer purchased an RF license to the image previously that customer will continue to have the rights to use it. The customer with the Freeze will be able to learn if any of its competitors licensed the image previously.
Today, there seem to be a number of customers who want exclusive us of an image for a period of time, but who are not all that worried about other customers who might have used the same image previously. This makes it possible to occasionally get higher usage fees for images that were previously licensed as Royalty Free.
Those who are used to licensing their images as RM may find that a few of the really high end fees they have earned in the past will disappear once they start offering the images as RF. But using the above strategy the under $15 sales will also disappear as well. And in all likelihood creators will make a significant number of sales that they would never have seen licensing their images as RM.
3 -
Better Data Related To What’s Selling – Image creators must have much more actionable data about what is being requested and what is selling. They must be able to separate out and review images that have actually been licensed from the masses in the general collections that never sell. At today’s prices creators cannot afford to waste time producing images that no one wants to use.
Some will say that for competitive reasons this is impossible and not worth discussing. It is worth noting that other larger industries have found ways to provide their supplier with much more detailed information about demand than is available today in the stock photo industry.
An increasing number of distributors seem to believe they can sustain their business with nothing but UGC content from contributors with no expectations of earning much from their images. The distributors contend that customer want “real” images of things that happen naturally, not high production value ones with paid models and planning. Amateurs with their cell phones will provide everything that is needed.
In my estimation, there will always be a significant demand for images created by photographers who have an understanding of customer needs and make a concerted effort to produce images that fulfill those requirements. To create such images requires planning and attention to detail. Photographers who are willing to go to the trouble of creating such images expect to be reasonably compensated for their time and effort or they won’t bother to produce. This core group of contributors is rapidly disappearing.
It used to be possible to have a general idea of the general subjects needed by customers and to take a haphazard, shotgun approach to production. A huge percentage of the images produced never sold, but enough was earned from those that did sell to sustain a business. Now, with falling prices serious producers can’t afford to waste time and money producing images for which there there is no real demand.
Much more focused planning based on data is required. If the data isn’t available, then planning is impossible. As a result, more and more top producers are dropping out and looking for other ways to earn a living.
Here’s recent comments from two of Getty’s most productive contributors. “Given the returns (from newly produce RM images), I have trouble justifying paying my staff to do the post production work necessary to put new images onto the market, let alone seeing any profit from my efforts.” Another said, “Basically, it's time to move on and focus on other business.”
Distributors ought to check their records and determine the number of their contributors who actually earn enough annually from the distributor to maintain a reasonable standard of living. Then, they should make sure the contributor is just supporting one family, not part of a production company supporting many families. In the best case a very small percentage of total contributors will earn enough to support themselves and a business. And that number will have been steadily declining over the last few years.
Next the distributor should look at the images that are earning the most money for the company. Were they produced by the contributors who are dropping out, or by the UGC contributors? If all these serious contributors drop out, can the distributor sustain, and grow, a business with just UGC contributions?
Tomorrow I’ll have more comments in Part 2 on (4) Curation and a (5) Central Database For Small Collections