Pricing
The following are links to stories that deal with stock photo pricing trends. Probably the biggest problem the industry has faced in recent years has been the steady decline in prices for the use of stock images. This has led to a dramatic shift in how stock images are produced and who produces them. It is harder to tell how this has affected the quality of the offering, but the huge oversupply (compared to demand) has made it more difficult for customers to find the images they need.
Photographers placing images with agents that seek to license uses at higher prices ($100 or more), and generate a lot of their sales via distributors, need to think hard about whether such an approach is in their best economic interest.
This story is
FREE. Feel free to pass it along to anyone interested in licensing their work as stock photography. On October 23rd at the DMLA 2017 Conference in New York there will be a panel discussion on Stock Photo Prices and whether there is anything that can be done to raise them -- even slightly. I will moderate the discussion.
Contributors report that Getty Images believes there is still a demand for RM imagery. However, they are seeing fewer high quality submissions on a consistent basis, despite the fact that they have many more RM contributors than was once the case. The company is trying to encourage more production by posting increasingly frequent shoot briefs on the Getty contributor website.
Videoblock has rebranded itself as
Storyblocks. The existing video and audio libraries are being maintained as separate subsites:
Videoblocks by Storyblocks and
Audioblocks by Storybloacks. (Each offering requires a separate subscription.) The former GraphicStock library is now part of Storyblocks.
The big question for the industry is, “Why would customers agree to pay slightly higher prices?”
Everyone seems to believe that the only way to get, or keep, customers is to constantly give them lower and lower prices. I think there are a couple other things customers want:
(1) better quality and
(2) the ability to find what they need quickly. The industry is missing out on both these levels.
How much would we have to raise prices to begin improving the pricing situation?
Not all that much. Many image creators would like to see the industry return to the much higher prices of old. While it is easy to justify those former prices based on the cost of production and the value the customer receives from using the image, a return to such prices is not likely to happen. On the other hand, if a strategy could be developed that would increase prices by just a small amount, it could begin to move the industry in the right direction.
In a little over a month I will be moderating a panel discussion at the
DMLA 2017 Conference in New York on the subject
Prices: Can We Raise Them? Stock photo prices have been declining for years, partially due to oversupply. Must prices continue to fall? Is there a strategy for charging more, to enough customers, that production of new images will become a viable business option for more producers? If so, how? What’s the strategy? If not, will that impact contributor supply? What alternatives are there for agencies to grow their business?”
I was asked recently if I could provide a definition for “microstock.” The term is probably meaningless today as are the terms Rights Managed and Traditional Royalty Free. All have changed dramatically and overlap in many ways..
A reader has pointed out that
Image Source is offering its customers using the promo code AUG50 a 50% discount on any image purchased during the month.
Cavan Images is also offering a 25% discount all month if customers use the discount code CAVAN25. Will temporary discounts bring in more customers and result in more sales overall?
Justin Brinson of
PicturEngine posted a thoughful comment to last week’s article “
New Stock Image Distribution System Needed.” I’m re-posting his comments here because I want to be sure all my readers have a chance to consider them. I’ll add a few of my own comments below his.
Many of the attendees at the CEPIC Congress are working to produce a collection of more “Premium” images as a way to set themselves apart from the massive collections produced to a great extent by amateur contributors. To do this they are editing tighter and separating out images of the highest “quality” and production values. The argument for this is that there are still customers willing to pay higher prices for better quality, unique images with top quality models and great production values.
InMagine has announced to its contributors that it will be shutting down its website on 30 September 2017 and will no longer be distributing your images, vectors and/or video on our website after that date.
Here are links to recent stories that deal with three major issues for the stock photo industry –
Revenue Growth Potential, Setting Bottom Line On Pricing and
Future Production Sources.
PantherMedia announces the launch of its Premium Collection to potential contributors around the world. Inspired by the Panther DNA their Premium Collection aspires to have an identifiable unique spirit that combines elegance and strength with a touch of danger.
Is Rights Managed(RM) licensing still a viable business model if your goal is to earn the maximum from your image collection? For most image creators the answer is clearly NO, particularly if part of the deal is to place your images exclusively with a single RM distributor.
Many of the non-sellers are very good images and would sell if customers only had a chance to see them. Back in January in as story entitled “
How Can Shutterstock Grow Revenue?” I outlined an idea for a two-tier pricing system that could not only work for Shutterstock, but many other distributors with large collections, and grow their revenue, even if there is no increase in the number of images downloaded.
Blend has launched a promotion they call “
Monthly Free Shoot.” Each month they will offer their customers all the images from one entire Premium Royalty Free shoot for unlimited, absolutely FREE use, according to the standard RF license.
Shutterstock makes a big deal about expanding its number of Enterprise customers. The last number they reported for Enterprise customers was 36,000 and just this week they said that Enterprise customers generate 32% of their revenue ($41.6 million for Q1 2017). Getty has an Enterprise program for its best customers which they call Premium Access. We have no idea how many customers fall into this category, but based on examining photographer sales reports my guess is that it is at least as many as Shutterstock, and probably more. A few years ago Getty said that any customer that spent $6,000 a year with them could qualify for Premium Access. I suspect that number is much lower now.
Here’s a way to raise prices without too much pain on anyone. Forget about raising prices on the top end sales. Instead, raise them a little bit at the bottom end. I recently examined licenses of some major suppliers to Getty Images and iStock. They received a royalty of less than $10 on 95% for the licenses. The average gross license fee of these lower end transactions was $5.12. Suppose instead of raising prices overall agencies add just a little bit to the gross license fee for their lowest priced licenses.
When most companies enter into negotiations with customers on the price of a product they usually know exactly what it costs them to product. In most cases they tend to not want to give away the product for less than it costs to produce. In the stock photo business usually have no idea what it costs to produce the product they are selling. They only know that they will have to give the creator a small percentage of what they are able to charge the customer. They have no idea if that is enough to cover the creators cost of production.
Panther Media has introduced a new approach to Rights Managed licensing and is opening the door to some really special photography. “We always had a clear position on the subject of rights managed licensing”, says Tomas Speight, CEO of Panther Media GmbH, “we would only ever do it if we could make it so easy it doesn’t need explaining”.
Getty Images has been focusing on
growing its subscription business. The theory is that subscriptions will make customers more dependent on the company for their future needs. Currently, subscriptions represent 37% to 38% of Getty’s Creative Revenue and about 50% of Editorial Revenue.
A professional stock photographer has pointed out to me that a long held tactic to price a premium brand of anything is that a higher price indicates higher quality. He argued this is why some photographers insist on selling their images as Rights Managed. They believe they are producing a higher quality product. They often go to a great deal of effort and expense to produce their images. As a result, they feel they are not only justified in charging more, but that it is the only way they can recover their production costs.
In the next few months I intend spend a lot of time examining the question, “
Can the stock photo industry raise prices on at least some of the images it offers?” The possible answers to that question are either YES, NO or MAYBE.