Turning RM Into Microstock

Posted on 12/18/2015 by Jim Pickerell | Printable Version | Comments (2)

Ever since Getty Images invented Premium Access licensing image creators have been upset that their images were being licensed to some users for ridiculously low prices. Often images licensed in this manner are ones that have been extremely costly to produce.

Getty has never fully explained why they felt it was necessary to license images to some customers at these low, low prices, but it was generally assumed that they were losing customers to microstock and subscription sellers and felt they had to find some way to hang onto these customers. It was argued that the volume these customers offered would make up for the low prices.

Volume -- for Getty at least, not individual creators -- may have made a difference for a little while. But it is interesting to note that Getty’s gross Creative revenue (RM and RF) has been steadily declining for several years.

In 2008 a group of photographer filed suit to stop Getty’s Premium Access subscription practice, but that suit was later dropped.

I have been aware that a significant percent of Getty’s sales are Premium Access (PA) deals, but only recently did I recognize how pervasive it such deals have become and how they have undermined and changed the whole concept of Rights Managed (RM) licensing.

Recently I was able to examine the sales of a Getty contributor with a significant number of sales. Most months this contributor has a few sales for over $1,000. However, these sales tend to represent less than 1% of total sales and about 30% of revenue. All sales for prices above $200 represent about 6% of unit sales and 66% of total revenue.

Getty reports some image sales as “Licensed” and others as “Premium Access.” A few of the PA sales were for prices over $100, but the average gross price was below $12.00. Almost half the PA sales were in the $4.35 range. The median PA sale was in the $4.00 range. There were a significant number of sales below $4.00.

While PA represented 2/3rds of downloads it represented less than 13% of total revenue. For all the RM sales (Licensed and PA) the average per image sale price was under $60. It should also be noted that over 20% of the Licensed images were sold for prices under $10, but the average price for Licensed images alone was still almost $150.

It is important to note that back in 2006 Getty reported that its average price for an RM license was $536. In early 2014 I did and analysis of the 2013 sales results of some Getty contributors and concluded that the average price was $298. While the current contributor’s average is about $60, I suspect this not representative of all contributors. But it does seem likely that Getty’s overall average RM sale today is somewhere between $60 and $298.

Shutterstock Comparison

What is amazing in all this is why Getty feels the need to offer RM images at prices far below Shutterstock’s single image prices. Shutterstock is their current major competitor and is certainly taking some customers away from Getty with their Enterprise deals. But is the solution to lower prices so much that image creators can no longer afford to produce?

I believe Getty’s Gross annual creative revenue is in the range of $280 million and that around 40% of that, or $112 million, comes from RM licensing. If the average price per image licensed is as low as this photographer’s then Getty’s total RM images licensed in 2015 will be somewhere close to 1.9 million.  That’s both Licensed and Premium Access. PA licenses may be as much as  2/3rds of that number or about 1.25 million.

If we look at Shutterstock, according to my estimates, in 2015 they will have in the range 11.2 million Image On Demand (IOD) sales at an average price of $9.50. Almost 60% of Getty’s PA images (and some of their Licensed images) are being licensed for $4.35 or less. Shutterstock is licensing something in the range of 10 times as many images at $9.50 or more as Getty is able to license at $4.35 or less.

Couldn’t Getty go to the PA customers who are paying $4.35 and say the new price is $5.00, or $5.50 or $6.00? Are those customers going to immediately rush to Shutterstock and pay $9.50 for a single image?

Of course some of those customer could get a Shutterstock subscription and that would be cheaper than a PA price. But haven’t all the customers who find subscriptions a satisfactory solution for their image needs already gone to subscriptions?

More and more Shutterstock customers are turning away from subscriptions to the higher priced options. Over 50% of Shutterstock’s revenue comes from IOD and Enterprise sales. In a recent report to investors Shutterstock listed $100 as an example of the revenue-per-download for Enterprise sales. In my example above 89% of the photographer’s sales were for less than $100.

Another thing to consider is that these low priced sales are not just to small businesses or for personal use. The companies getting these PA price breaks are some of the richest companies in the world. They include: Microsoft Multimedia Publishing, About.com, Ask.com, AOL Photo, E Online, Hearst North America, Hearst United Kingdom, Conde Nast, Facebook Trending, NBC Universal – CNBC, ABC Radio Online, Evolve Media, Direct TV, Axel Springer, Purestyle SAS, Prisma Media and Fadaat Media to name a few.

Of course, we know that it is our duty as small, independent business creators to subsidize large corporations so their senior executives and investors can live well and enjoy the fruits of our labor.
Maybe Getty needs a New Year’s Resolution to raise some of their PA prices slightly, rather than continuing to lower them.

Copyright © 2015 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 www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


  • Grant Faint Posted Dec 20, 2015
    I have been involved with stock photography since 1985 with The Image Bank. I have sold millions of dollars worth of images in that time. We have reached a point where it is impossible to make money from stock images due to price competition. I have had conversations with stock image buyers and they can't believe how cheap photographs have become. They have a guilty smile on their faces.

  • Richard Gardette Posted Dec 20, 2015
    "Of course, we know that it is our duty as small, independent business creators to subsidize large corporations so their senior executives and investors can live well and enjoy the fruits of our labor."
    Capitalism was always difficult to bear for small business actors; hyper capitalism of today has became hyper difficult to bear.
    Let's pray for ourselves.

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