Pricing
In two recent stories
Know Your Return-Per-Image and
Stock Photo Production Costs I discussed two very important issues for anyone trying to earn a portion of their living from stock image production. The issues boil down to
(1) clearly understanding the cost of producing your images and
(2) the return you’re receiving from sales of those images. No business can survive if it spends more to produce its products than it earns from sales.
I would like to encourage every stock photographer to begin to calculate, on an annual basis, their Return-Per-Image (RPI) for each agency they work with. This is particularly important for those photographers who hope to realize a profit for the time and expense they invest in producing stock images.
Contributors to 500px Marketplace are finally learning what Visual China Group (VCG) has planned for them. VCG has just sent them a message outlining some “major enhancements” that are coming. “ “These changes will help maximize your potential earnings by positioning your content at the
right price and with the
right distribution. Starting July 1st, 2018, we’re offering our community an
exclusive opportunity to work with our newest global distribution partner, Getty Images,” the message says. (emphasis mine)
After years of Shutterstock taking market share from Getty, it seems that the two have achieved a state of relative parity with regard to gross revenue generated from the licensing of still images. Customers no longer seem to be leaving Getty because its prices are too high. In fact, Getty seems to be charging selected customers less per-image than what Shutterstock would charge them. Where AdobeStock fits in is unclear, but for the time being each seems to have a customer base that favors them. There does not seem to be a lot of movement of customers from one to the other.
What kind of images are generating the most revenue? Is it the amateur produce imagery that is quickly loading up most of the databases, or the more costly to produce model released people, lifestyle, and business imagery requiring complex and costly set ups and arrangement?
A reader agreed with the lead in “
Escalating Price Based On Demand” that few photographers understand what they should charge for their work, but he argued that there is “another possible consideration.” He said it is important to establish a “floor price” below which you won’t license a usage. He asked, “why won’t agencies allow creator to set a ‘floor price” for ‘special images?’ It can be painful to see $2.50 sales of extremely complicated to produce images. Creators should be able to mark certain "high value images" so they can't be used unless the buyer is willing to pay at least a minimum fee.”
Recently Alfonso Gutiérrez, CEO of AGE FotoStock told one of my readers that a "professional" stock photo collection in an agency should be returning to its contributors a minimum of $1.00 per-image per-year. The photographer noted that his returns from AGE were way below that number and he wondered whether many photographers are seeing that kind of return.
Possibly the biggest flaws in the Blockchain model is allowing photographers to establish one fixed price for their work. As I have
pointed out before very few photographers have any understanding of what they should charge for their work. They may know what they would “like” to get if someone uses one of their images, but invariably that will be much higher than all but a very few customers will be willing to pay to use the image.
Blockchains are being touted as offering great future economic benefit for stock photographers. Photographers will be able to set the price for their work. No waiting weeks of months to be paid the photographers share of the sale. Once the image is licensed virtually 100% of the revenue will be transferred immediately to the photographer’s account. “Technology” has removed the need for middlemen and their costs. Blockchains will keep such great records on every transaction that consumers will be unable to steal without getting caught. Any unauthorized used will be immediately identified and the infringer will be pursued.
Is it all really that good? Check out this story.
Shutterstock ought to think about raising prices. Clearly the number of images download is flat and not likely to grow significantly in the future. Just look at the quarterly download numbers for 2016 and 2017. The overall market for stock photographer is not growing. For years Shutterstock got away with taking market share away from Getty. They though that because their downloads were growing that the market was growing. In reality they were just taking customers away from Getty.
Wemark has announced on
VentureBeat.com that it is looking to replace existing agencies in the stock photography marketplace with a blockchain strategy that supports direct transactions between creators and customers and gives photographers control over the price of their photos.
SmugMug, an independent, family-run company, has acquired
Flickr from Verizon’s digital media subsidiary Oath. Flickr was founded in 2004 and sold to Yahoo in 2005. Yahoo, in turn, was acquired by Verizon in 2016 for
$4.83 billion. Verizon combined Flickr with AOL to create a new subsidiary called Oath.
Getty Images has announced that it will be retiring Thinkstock.com in mid-2019 and taking steps to transition Thinkstock customers over to Getty Images and iStock. Getty says this move will make way for a newer and overall improved experience for Thinkstock customers on Getty Images and iStock.
The major stock agencies seem to have reached a revenue plateau. It is time to consider a major change in marketing strategy. There is a strategy that should be relatively easy to implement which could result in higher, overall revenue from licensing the same number of images.
A Shutterstock investor asked me recently, “What can Shutterstock do to grow revenue?” He went on, “worldwide, the number of customers willing to actually pay for the images they use seems to be flat, not growing. Shutterstock
cut prices In 2017. Downloads were up less than 2% compared to 2016. Meanwhile, they added enough new images to grow their collection by 46% in 2017 compared to 2016. Art directors say the size of the collection is making it harder, not easier, for them to search and find what they need. AI doesn’t seem to be solving the search problem."
The numbers
Shutterstock put out yesterday got me thinking. Is it really possible for the average price per download to steadily rise in a year when they have introduced new 10 and 50 image packs at lower costs to the customers? Do the download figures really mean the customers are using more of every category of imagery?
When I first heard about a blockchain based strategy for licensing stock images it sounded like it might have some potential. What photographer wouldn’t like to be able set the price for the licensing of his/her images, have customers pay those prices, and have most of the price the customer pays immediately credited to the photographer’s account. Sounds great.
It is hard to find a stock photographer who has been in business for any period of time who can point to rising revenue per-image-licensed. Some who have dramatically increased the size of their collections may be able to point to overall annual revenue growth, but not growth per-image-in-the-collection.
Can blockchains improve tracking of stock photo sales, give creators greater control, cut costs and increase royalties? Various companies are talking about instituting such systems. Announcements are expected in the near future. Such systems may reduce the need for some of the services stock agencies currently provide and remit 80% to 90% of the fee the customer pays to the photographer.
Recently, a
Microstockgroup post by
Hochmann asked, “Why all the hate towards Getty Images?” He went on to say, “Yes, I know that they give 20% as a commission while a bunch of other companies start at 35% and many of them go above 50%.
But the thing is that in Getty you're getting 20% of photographs sold for $100 or $1000 instead of 50% of 1 dollar.”
Getty Images has sent out a promotion inviting customers to
“Stretch Your 2017 Budget Into 2018 With Ultrapacks” and giving them 31% off if they purchase before the end of the year the right to download a certain number of images in 2018.
“Must all Royalty Free photos be model released?” This question came from a stock agent who is considering converting his collection from RM to RF.
The answer is NO. An increasing number of images are being offered under a Royalty Free License for
Editorial Use Only. What the Editorial Use Only means is that “we don’t have a model release for this image,” and thus it can not be used for commercial purposes.
Stock photo agents tell me that they can’t offer a system that would let customers search for just the images that have been licensed at least once because their photographers will complain.
The question for today is: “Does adding to an image collection automatically grow revenue?” and the companion question “Must an image be NEW to be useful to a customer?” Shutterstock supplies some detail that is instructive and worth reviewing.
Storyblocks, formerly Videoblocks will generate about $30 million from licensing stock imagery in 2017. Currently, they have a little over 200,000 subscription customers who pay $149 a year for unlimited access to about 115,000 video clips. They also offer about 200,000 photos, 200,000 vectors and other illustrations and 100,000 pieces of music for a separate subscription price.