Two Pricing Tiers: Licensed And Non-licensed

Posted on 8/17/2018 by Jim Pickerell | Printable Version | Comments (0)

It is amazing to me that no agency has created a two-tier stock photo marketing system similar to iStock’s, but for Licensed and Unlicensed images rather than Exclusive and Non-Exclusive.

iStock has priced their Signature image collection 3 times higher than its Essemtial, Non-Exclusive collection. And they pay contributors a higher royalty rate for images licensed from the Signature collection.

In order for images to be accepted into the Signature collection they must be Exclusive to iStock. However, for those who put their image in the Signature collection the odds are much better that they will make sales than if the images are in the Essential collection.

Currently, iStock has 64,506,529 photos in its collection. About 18% are in the Signature collection and and 82% in the non-exclusive Essential collection.

Getty has said in the past that about 75% of iStock revenue comes from the licensing of Signature images. If that is still true, then it means, given the price difference, that they license rights to about the same number of Signature images as Essential. It would seem that at least 50% of image buyers have decided that Signature image prices are still reasonable. They aren’t looking for the cheapest alternative.

Customers may choose to confine their searches to the Signature collection which is 1/5th the size of the Essential collection and 1/6th the size of “All.”  When doing a Signature search they know they have a reasonable chance of finding a good, useful image much more quickly than doing a default search of the entire collection. It would be very interesting to know the percentage of customers that use each of the 3 search options.

Why are customers purchasing so many Signature images and paying more for them? Is it because they are Exclusive and the customer can’t find the same image somewhere elsewhere? I don’t think so. They are certainly not buying an RF image from iStock because they want to control future usage. If another customer has purchased the same image previously that customer has unlimited right to continue to use the image, forever.

While customers can search for either Signature or Essential images alone, the default search is “All”. With the All search the customer sees Signature and Essential images side by side. It is not clear whether iStock shows more Signature images than Essentials on the first few pages,

Customers are told that the Signature images are the “Best Quality,” but there are some great quality images in the non-exclusive collection. Many of the best photographers won’t make their images available to iStock exclusively because they want the chance to license their images through multiple outlets. If truth be told, I think the “Quality” of the two collections is similar. Thus, it would seem that most customers choose the image that best fits their current need, regardless of the price, as long as the cost of the most expensive image is reasonable.

I don’t think customers are buying Signature images because they are exclusive, or because they are in theory of “Better Quality.”

Comparison Of iStock With Getty

I’ve had photographers with Exclusive RF images in both iStock’s Signature collection and on tell me that they earn significantly more from iStock than from Getty. Why would this be?

iStock has relatively fixed prices regardless of who the customers is. With Getty’s Premium Access pricing structure the fee for unlimited use of any image (both RM and RF) on its site is established by Getty’s sales staff based on what they determines each customer can afford to pay.  Many of Getty’s customers cry poverty and are offered lower priced deals to keep them as customers. Consequently, over half of Getty’s images are licensed for prices under $10.

A single Signature image costs $33. It the customer buys a 10 image subscription on a year’s contract they can get each image for $7, but often customers don’t use all the images they are entitled to use every month so sometimes the average price would be higher. A 25 image contract works out to $4.80 per image; 50 image contract is $3.98 and a 750 image contract is $0.44.

A while back I calculated that on an annual basis Shutterstock customers only actually download about 25% of the images their subscriptions authorized. This probably varies month to month.
The percentage may be higher now that they offer more small subscription packages, but certainly subscription customers seldom use 100% if the images they are authorized to download.

How Does This Apply

The most important reason for offering a Licensed collection is to make it easier for customers to
Identify the best images quickly. The other reason is that it provides the perfect excuse for charging a somewhat higher price for popular images, or at least putting a floor price on images that have shown to be popular.

If some price sensitive customers can’t afford to pay $1.00 or so for the images they need (hopefully the floor would be somewhat higher) then they will have to limit their search to Unlicensed images that no other customer has chosen to use up to that point in time. Within that group of images there will be some great images.

Today agencies do little or no editing of their collections. This would take advantage of “customer editing” which is probably of greater value that “agency editing” anyway.

We know that the Licensed collection would be much smaller than the Unlicensed one and thus much easier to search. In the last few years I have been regularly determining the maximum percentage of images licensed by Shutterstock relative to the total images in the collection. In the last quarter less that 21% unique images in the Shutterstock collection were licensed. We know the real percentage is much smaller than that because many of the images licensed were licensed multiple times.

Someone will ask “What about new unlicensed images? How do you make customers who search the Licensed collection aware that these new images exist?”

If the customer wants to look at new images that have never been used they can search the “Unlicensed” category, or they can be given an “All” option with a mix of both licensed and unlicensed. See this story for a more detailed description.

Such a strategy would be a way to raise prices while still retaining a broad collection of lower priced images for the customers with low budgets.

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:  


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