I was recently asked for my views on where the stock photo industry is headed over the next few years, the value of the industry at present, and how I think the major players will adapt to the growing availability of user-generated content. Here’s my answer.
Basically, in terms of revenue, I think the industry has about reached its peak at $2.4 billion. In the near future the industry will start to a decline in terms of gross revenue generated. The main reason for the decline will be a huge and ever growing oversupply that forces prices down. Prices have dropped and will continue to drop faster than any growth in usage.
The dramatic increase in user-generated content results from more people taking more pictures and the Internet making it much easier for large numbers of these people to place their images in collections where they can be licensed. The large collections are doing everything they can to out-compete each other and grab as much UGC content as fast as possible.
Most UGC creators are looking for supplementary income, not a career. A little income makes them happy. If they don’t get much they will simply stop uploading new images to sites where they can be purchased. While an increasing number are deciding that the time required to keyword, upload and go through the rejection hassles is not worth the trouble it seems that for every one that drops out ten new ones decide to give it a try -- at least for a little while.
Take Shutterstock for example they currently have over 100,000 contributors. In 2015 the royalty they paid these contributors totaled around $124 million. That means that the average contributor earned $1,240 during the year. A few contributors earned quite a bit more, but they are a very small percentage of the total. The vast majority earned quite a bit less. The average contributor also has around 800 on the site. Consider how long it took to create, correct, keyword, upload and deal with rejections to get 800 images on the site.
It is also important to note that a significant number of UGC creators are happy to allow free use of their images. In addition, a huge number of users ignore copyright and grab whatever they want off the Internet and use the images without any thought of compensating the creator. A huge percentage of the images use generate no revenue whatsoever, and that is a major long term problem for stock photography as an industry.
Increasingly, major players – those trying to earn a living from photography – are dropping out because they simply can’t earn enough to cover the costs of new production. For the most part they leave what they have already produced in the collections, so it continues to be available, if it can be found. What tends to happen is that this work gets buried under newly produced UGC images and is often very difficult to find.
UCC creators tend to photograph things that happen in front of them while they are about their daily activities. This covers a lot of subject matter. But there is also significant demand for images of business situations where all the elements may not come together naturally and where there is a need for props, sets or models in order to produce a usable image. There is also a demand for images shot from unique locations or angles that are usually not available to the UGC shooter.
In the past this type of imagery was produced by professionals. But since the professionals can no longer earn enough to justify producing such images, it seems likely that new images of this type will be in very short supply. A handful of such producers may stick it out, and either a high volume of sales, or a willingness by a few customers to pay significantly higher prices may be enough to offset the general lowering of prices for the mass of contributors and images licensed.
There is certainly an increased demand for “more natural, realistic” images that UGC creators tend to produce. But I think we are a long way from that kind of imagery being the ONLY thing customers who are trying to sell products or services will want to use. Those customers may find it necessary to hire a photographer to produce the images they need, or do without.
The huge numbers of images in the collections are not making it easier for customers, but harder. Now customers have to spend much more time wading through UGC images that don’t quite work for their projects in order to find something that might work. Better keywording is not working. Better curation could help, but that requires humans and costs money. For the most part the agencies can’t justify the expense given the low prices at which they are licensing image uses. Everyone is hoping that technology will somehow magically solve this problem. I don’t see any likelihood that technological solutions will improve image search to any great degree.
Here are links to a few other stories that will provide additional information on some of these issues.
Global Market Size For Stock Images 2/16/16
http://www.selling-stock.com/Article/global-market-size-for-stock-images
Photographers Quitting: Why Should Investors Care? 3/28/16
http://www.selling-stock.com/Article/photographers-quitting-why-should-investors-c
Turning RM Into Microstock 12/18/15
http://www.selling-stock.com/Article/turning-rm-into-microstock
What Investors Want To Know About Stock Photography 7/10/15
http://www.selling-stock.com/Article/what-investors-want-to-know-about-stock-photo
Top iStock Contributors Adding Fewer Images 1/5/16
http://www.selling-stock.com/Article/top-istock-contributors-adding-fewer-images
Public Company Dilemmas 2/18/16
http://www.selling-stock.com/Article/public-company-dilemmas
Getty Images Lowers Prices 1/26/16
http://www.selling-stock.com/Article/getty-images-lowers-prices
Survey Results: Global Stock Image Revenue 2/8/13
http://www.selling-stock.com/Article/stock-image-sales-survey-results
Stock Photo Market Statistics 3/29/12
http://www.selling-stock.com/Article/stock-photo-market-statistics