Many stock agencies are consolidating and downsizing, but not
Tandem Stock. Founded in 2010, they have been growing at an average rate of 45% per year. Specializing in Outdoor photography, they currently have a tightly edited collection of 115,000 images from 930 contributors. They have discovered that the needs of their clients are extremely specific and they specialize in supplying images that cater to those needs.
For example, clients don't just need "hiking in Yellowstone." Rather they need "hiking on the shoshone lake trail, in autumn, with a male and female in gear not older than two-years."
All their images are licensed as RM. In the last 12 months the average price per image has been $215.13 with the average order value (invoice) at $441.87. One of their contributors has earned more than $60,000 from stock sales in the last 12 months, another 7 have earned over $30,000, an additional 15 made over $20k and 7 more are doing over $10k.
Tandem offers stock motion as well as stills, but currently 97% of the stock revenue comes from still sales and only 3% from motion. This year the average license for a video clip has been approximately $255, but previously it was closer to $70, so they have made a huge jump this year.
Tandum CEO Ian Shive says, “We've found that a lot of new clients like that we have motion but end up licensing stills. The motion collection isn't that strong, but this is something we definitely plan to focus on in 2016.”
Tandem also offers fine art print sales of about 3,000 images from 35 of its contributors. Revenue from this endeavor is “basically moot,” Shive says. “This was an experiment that we will most likely discontinue in 2016 when we re-launch Tandem Stock's software. We found that administrating this was much too difficult for the revenue it churned, or even had the potential to churn. Most of our photographers prefer to manage their own print sales and felt we would be competing with them. We let this be an "opt-in" but not enough really participate to make it viable.”
Tandem also offers Tandem Vault, a powerful cloud-based, digital asset management platform that seamlessly integrates photography, video and other file formats into an easy-to-use interface. Tandem Vault is 2 years old and represents about 30% of the company’s gross revenue. The licensing are represents about 45% of total annual revenue and the other 25% comes from assignments and video production (creating finished pieces to accompany editorial, most often).
Shive said, “We call it the Tandem ecosystem - most of our revenue is derived from clients who participate in all three offerings. For instance, a major environmental non-profit will license a lot of images for their magazine, when we don't have what they need (portrait, etc.) they may assign. Some of the work we do for them is shot internal and wholly owned by them. All of those assets are then stored and managed in Tandem Vault, which they pay for monthly and make accessible to their 500+ staff. In addition, they will often ask us to produce accompanying video/media to support the editorial where photography can not. Often we license clips from our own library to complete those.”
Assignments
Photographers establish their own day rates for assignments and Tandem makes sure they get 100% of the fee. Clients pay the agency a booking fee on top of the normal day rates allowing Tandem to preserve their photographer’s revenue. Shive says, “I modeled this off of what I used to see with hair and make-up agents: the artist had their day rate and the agency had a fee on top.”
He continued, “It's also worth noting that almost all our assignments have a required video component to them. The photographers are only required to gather the materials, but not edit (at least not yet). The finishing/editing is typically done in-house here at Tandem (one of our staff is a full-time video editor). The ability to handle the entire assignment, including video, top to bottom has really added a lot of revenue opportunities. If we do the editing, we quote that out separately with the client. Of course when a photographer does an assignment for us we contractually require the photographer to submit the images to stock, once the embargo is over.”
Distribution
I asked, “What about distribution? You say that you only do direct sales and no distribution, but I notice in your user agreement that you offer a different percentage for contributors in distribution arrangements.”
Shive repied, “We haven’t updated our agreement since we launched. We had that in there ‘just in case,’ but we have never used it and don’t plan to. We did explore using a third party in markets that were hard to reach, such as APAC, but ultimately we decided to keep it all under one roof. We have relied heavily on feedback from our photographers, too, and find they would rather retain a direct relationship with us (and their work) vs. us farming it out to make only a little bit more. In distribution the agency tends to win a lot more than the photographer.
“Another reason we don't distribute is what I saw happening with other small agencies that relied on distribution so heavily. One agency we talk with often shared this conundrum: when Getty announced that their pricing model would change in a way that was perceived to be unfavorable to photographers the photographers gave an ultimatum to their distributing agency. They said - either stop distributing through Getty or we're leaving your agency. As a small agency they were in a lose/lose situation. 75% of their revenue came from Getty but 75% of their photographers were threatening to leave. I never wanted us to be at the mercy of the decisions of another agency.”
Other Questions And Answers?
JP -
You say most of your licensing is in North America. But North America only represents about 35% of the worldwide market. Do you have any plans for reaching customers in the rest of the world?
IS - Absolutely. We're working to establish an office in Europe by Summer 2016 and have already taken the next steps in making that become a reality. We definitely do business in Europe and Asia but it's very limited and with select clients in our genre. Still, we do about 35% of our annual revenue overseas with most coming from Germany and Japan. Since we are small and have never taken on a loan, outside funding or any external support, just bootstrapping we've had to grow organically and have had very real challenges related to tax law, language and time zone barriers, etc. I've learned a lot but definitely need local help in those markets.
Marketing
JP -
That leads to marketing. How do you market? How do you make potential customers aware that you exist?
IS - We have a no-pitch policy for photographers. I believe that if we are doing a good job, our industry is small enough that people will talk. That works both ways, of course, but our goal wasn't to be everything to everyone but very meaningful to the best in our class. Also being published with a byline is the best marketing. Our name is everywhere, on numerous covers every month in our genre.
For clients we have most of our success with direct calls though similarly, photo editors all talk and most move from magazine to magazine in cycles. It was an incredibly slow process to get our foot in the door and most didn't take us seriously until we were two years old. Some came right out and told us that "call us back when you hit two years." Eventually the quality of our archive got to where we were recognized as being top tier and our photographer-friendly approach earned us respect from the image creators. At the end of the day, I still believe content is king and if your work truly is tightly curated people will seek you out.
All that said we have begun to branch out. We host an annual meeting in Telluride, Colorado every year. Next year will be our 5th year. This is huge for both us and our photographers. About 100 of our photographers attend along with 20+ clients including National Geographic, Outside Mag, Backpacker, Saatchi, Microsoft, Audubon, The Nature Conservancy, Sierra Club, etc. We use this to galvanize relationships, build on new ones and also give our photographers a chance to meet face-to-face with our clients.
We also believe in face-to-face meetings, we go from city to city meeting clients, show up at non-stock industry events, like the Outdoor Retailer convention in Salt Lake City and more. We have never gone to a stock industry convention - we put our money in non-traditional portals where we tend to find better value since we're not competing with numerous other people of the same industry.
There are other ways. In January our first internal publicist will be hired so things are apt to grow and change.
JP -
How large a staff do you have?
IS - We are small, six people including myself. We're adding three positions in the new year and two more in Europe by summer 2016. When we launched five years ago we built our own software, which we now license as Tandem Vault (tandemvault.com). That software did a lot of the heavy lifting for us and allowed me to keep our staff super small, thus competitive.
JP -
Do the photographers receive 50% of the listed price of the fine art print sales, or is there a cost of printing and shipping that is taken off the top before the photographer’s share is calculated?
IS – With direct sales, meaning from our website/store, they get 50% of the gross sale price of the image. Tandem takes a reduced percentage to cover the cost of fulfillment. We do have some images at online vendors. We split those reported sales after the vendor fulfillment take. We like getting a piece of all units sold on retail products and do very well in the greeting card space with this model. However with fine art prints photographers aren't happy with the low numbers which is a large part of why we are doing away with this.
JP -
What percentage of your collection is of underwater photography? Some quick searches on your site seem to indicate that this is one of your strengths.
It's a large part of our archive and generates strong sales but in lower volume. So we move a lot less underwater images than say national parks, however they tend to go for much higher prices (last month two underwater images went for 8k and 5k respectively). This is how we break down, though there is some obvious overlap, these are pretty good for measuring (see below). That said, the largest categories are obviously our most profitable, National Parks (US), Travel and Adventure.
| National Parks (worldwide) |
21,088 |
| Travel |
21,007 |
| Landscape |
19,324 |
| Adventure |
15,671 |
| Hiking |
10,231 |
| Active Living |
10,229 |
| Cities/Skylines |
8,417 |
| Wildlife |
7,071 |
| Climbing |
6,618 |
| Underwater |
5,711 |
| Backpacking |
5,209 |
| Camping |
4,489 |
| Culture |
2,662 |
| Food |
2,580 |
| Swimming |
1,687 |
| Yoga |
1,664 |
| |
|
| Total |
143,658 |
Active Living does not include adventure/outdoors, but is more fitness oriented. Food was added as a category in 2015. Some images fit into two categories.
JP -
Do you edit submissions, or is everything contributors choose to place in Vault storage available for licensing.
IS - Vault is an entirely separate business as of today. The customers there are mostly large companies with only a handful of photographers using it. Nothing stored is available for license yet however we're on the verge of making a major announcement in January when we re-launch Tandem Stock's software that I believe will set us apart in an incredible way.
JP -
I notice that when I click on the tags on any image such as “helmet” or “mountains” I get a lot of irrelevant images. However, I seem to get different and often better results when I enter the same words in the search box. Is there some reason for this?
IS - When you do a general search it goes across many different fields, caption, keywords, etc. When you click a tag it only looks at other tags so results will differ based on that. That said...
We're taking the new software from Tandem Vault and merging it with Tandem Stock. That should clear things up. It is a huge undertaking to migrate to an entirely new software platform but our software was cutting edge when we launched five years ago and I believe keeping ahead of the other agencies technologically is critical to the buyer and photographer experience. We know the filters on stock need to be improved and Vault has an incredibly powerful system for filtering and finding images. It can't come soon enough.
JP -
I assume contributors are required to do their own keywording and captioning. Is there any checking of this information when the images are delivered?
IS - Yes they are, but we do enhance the keywords for contributors as well. We just need enough of a baseline to know what we are looking at.
JP -
Once accepted as a photographer can the individual upload any images they want, or is there some type of an editing process to determine which images will be accepted?
IS - Every image that comes through our door is curated and ranked. We have a very low general acceptance rate, about 15% but some photographers we've been working with for a long time are at about 90%. We only want top tier imagery. We also revisit older imagery and sometimes re-curate. Curation is our "secret sauce" and is, in my opinion, one of the major elements that sets us apart. Some further insight into how it works: we may take a lot of images from the same shoot and be a bit redundant such as this set:
https://tandemstock.com/browse?q=andrew+peacock+grand+canyon+paddleboard
We then have a sales process where we look at the top places we can get those images, which we think are special, and let the editors have a wider selection to look at. Once we feel that we've saturated the immediate opportunity, we'll then trim this set back a bit to just the images we feel are the evergreen images (and of course those that sold will stay). A photo from this set was quickly selected and recently ran as the opening spread known as "exposure" for Outside Magazine, a coveted spot and they enjoyed having a lot of options. Curation is a constant process.
Because of our reputation for high quality work in the marketplace our client base is now engaging with our photographers to create custom content.
In 2016 we'll be formalizing this process launching a private portal to buyers called "custom content." This will be a place where brands can work directly with a select group of photographers to build a library of work that they can pull from and have broader rights that fill all their needs. That will not be curated but will have a feedback process. That library will remain private so long as the client is paying their monthly fee. The broader the rights needed, the higher the rate. The client is also locked into a minimum engagement time (typically 6 months or longer) and the photographers can produce the work anytime they want, at their leisure, during the course of a month so long as they deliver X number of images. This means the photographer is guaranteed a minimum monthly revenue, the client is protected with broad rights and is rewarded with fresh, new content at prices that are affordable, but still worth the photographer’s time. If a photographer has two or three people like this, they can easily draw a nice salary. This isn't a terribly new idea but the time is right to really make this work and we've already closed some deals. The work is available to that customer for a set period of time, but once the embargo expires the images then move to the general stock marketplace. We'll be using Tandem Vault to administrate this.