Supply And Demand

Posted on 2/2/2017 by Jim Pickerell | Printable Version | Comments (1)

Twenty-five to 30 years ago there was a large demand for stock images relative to supply. Prices to use a stock image -- while reasonable when compared to what it cost to hire a photographer for an assignment -- were much higher than they are today. It was possible for a professional photographer to produce a lot of images that no one wanted to buy, and still earn a decent living from the few that did sell.

Today, there is a huge over-supply of images of virtually every subject, and prices have fallen through the floor.

Now, in order to earn a living producing stock images a photographer must be very efficient in the way he or she manages his or her time and not waste any of it producing imagery that no one wants to buy.

In most industries producers expect to know what they will be paid for their product before they go to the expense of producing it. Not the stock photo business. In other industries producers also look for guidance from middlemen as to what is in demand so they don’t waste time producing product that no one wants to buy. In the stock photo business that only happens in a limited, and not very useful, way.


I would like to illustrate my point by looking at how the manufacturing and sales process might work in a very different industry.

Suppose you are a shirt manufacturer. You have the capability to produce a million shirts in 200 different styles and sizes annually. You negotiate with a middleman who guarantee to pay a fixed price for each shirt delivered. The middleman provides information as to the number of shirts needed in each size and style. The middleman may end up selling the shirts for much more than he pays the manufacturer. But at least the manufacturer knows what he will earn when he delivers the shirts and that he can realize a profit selling them at that price. If there is no chance of a profit the manufacturer won’t agree to produce the shirts.

But suppose the middleman comes and says, “The market is expanding and I need 2 million shirts next year. However, I’m not going to pay you anything when I receive the shirts. Instead, I’ll give you a percentage of what I receive for those I sell.” A percentage may sound good, but the real questions are the actual sales prices of the shirts and the percentage of what you produce that the middleman will actually be able to sell. At this point the manufacturer has entered into a relationship with the middleman and is assuming a lot of his risk.

The manufacturer wants to know which shirts have sold the best in the past year and what indications there are that there will actually be a growing number of customers for what is produced. The middleman says, “No, that information is proprietary. Just produce more of everything and we’ll see what happens.”

So the manufacturer produces more of everything and it turns out that there is increased demand for about 10% of the production, but there is little if any demand for the other 90%. Had the manufacturer produced more of the 10% that sold well gross sales might have been even better, but the manufacturer didn’t have that information. As it turned out there were not enough additional sales overall to cover the additional costs and provide the same profit as the year before. However, the manufacturer was able to learn from the unsold inventory sitting in its warehouse that certain things sold better than others the previous year. In that way he was able to adjust future production accordingly.

Then the middleman finds that competition within the marketplace is getting fierce. Now, in order to compete and hang onto existing customers the middleman has to lower prices to match the competition. He continues to sell the same number of shirts – maybe even a little more – but total revenue generated is less. And, instead of getting paid a fixed amount for each product produced the manufacturer gets a percentage. Total revenue the manufacturer earns declines, but his production costs remain the same, or maybe increase.

With this model the shirt manufacturer doesn’t stay in business very long.

Back To Photography

Here are some numbers to consider. In 2006 Getty’s gross Creative RM revenue was $325,930,000 and Creative RF was $308,170,000 for a total of $634,100,000. (See here)  Getty licensed rights to 607,945 RM image uses and 1,053,751 RF uses during 2006. Thus, the average license fee for an RM image was $536 and for an RF one was $292. Total RM and RF images in the Getty collection at the end of 2006 was 1,767,214. (See here)

Today Getty has 17,650,515 images in its Creative collection (and 88,104,973 in Editorial). Creative revenue was probably about $280 million in 2016, less than half of 2006. Based on price declines I believe that Getty licensed about the same number of Creative Images in 2016 as in 2006 so the huge increase in images in the collection did little to grow image downloads. Getty did have huge growth in its Midstock area (iStock and Thinkstock) which now probably represents about $200 million in revenue. In 2006 Getty had just purchased iStock and it is believed to have been generating around $10 million in revenue at that time.

It is also worth considering some growth trends at Shutterstock. At the end of 2014 Shutterstock had 46.8 million images in its collection. At the end of 2016 it had over 110 million images. During that period while total images more than doubled revenue grew by about 53%.

It is also worth noting that between Q3 2014 and Q3 2016 (the last quarter available for comparison) a comparison between the number of images in the collection at the end of the quarter and the total number licensed has declined from 81% in Q3 2014 to 40% in 2016. Clearly growing the size of a collection does translate into revenue growth.

Finally, it is also worth mentioning Shutterstock’s Enterprise business. In the last few years they have placed heavy emphasis on how much they have grown the number of Enterprise clients and the fact that a few of them are spending more than $100,000 a year with Shutterstock. However, it is important to note that on average these clients are only spending about $4,200 per year. Given that a few are spending a lot more, many must be spending a lot less than $4,000.

Getty has had a comparative enterprise business with its Premium Access since 2007. The specifics of how each of these operate is unclear, but it does seem that both companies have gone to the customers that generate the most revenue for them annually and tried to improve their service to those customers. This may have created more loyalty from these customers, but it hasn’t necessarily resulted in much greater annual revenue spend from most of them. Shutterstock says they have 36,000 Enterprise customers. We have no idea how many Permium Access customers Getty has.

Copyright © 2017 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:  


  • Bob Prior Posted Feb 4, 2017
    Great stats but what is your conclusion
    with the regards to the stock business today and in the year ahead? What are the effects on the other 300 stock libraries in the business outside of Getty, Shutterstock and the giant players? What of the specialist libraries - how do you see their future?

    Robert Prior

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