The colossal effect of the micro-payment model on traditional stock licensing is often described in political language. Jupitermedia CEO Alan Meckler favors the phrase, "microstock revolution." Masterfile president Steve Pigeon says, "The stock photo industry has been democratized to the extent where anyone can now be a contributing photographer, and anyone can afford to be a client. This is a good thing."
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Good for Whom, Exactly?
Cannibalization is indisputable; however, many industry leaders agree with Pigeon. Demand for premium creative and editorial imagery remains strong, and the majority of the professional market is still willing to pay hundreds to thousands of dollars for the right images.
At the same time, microstock has tapped into an entirely new image-buyer market, the full potential of which is unknown. The open business model has also uncovered a lot of new photographic talent, with many previous microstock-only shooters now selling their work through premium brands.
Still, naysayers argue that only the large microstock businesses have really benefited; however, that's an insular view. The winners are image buyers. Microstock has enabled professional buyers to substitute premium-pricing stock with low-cost images, benefiting small agencies and small-scope, budget-sensitive projects. Brick-and-mortar businesses and nonprofits can now tap into a marketing resource that was previously cost-prohibitive. There are also other applications, from social media to varied personal uses.
Tens of thousands of microstock contributors also consider themselves fortunate. Many like the sense of community, camaraderie and social-network-like elements of microstock Web sites. Hobbyist photographers are thrilled by the additional, mostly passive, income. Amateurs with professional aspirations are grateful for a way to break into a closed market.
Revolutionary cries seem to be dying down, replaced by more pragmatic concerns of stagnating revenues, low commissions and other issues all-too-familiar to professional photographers.
A Matter of Time
To longtime industry insiders, it was predictable that the trends and issues affecting the industry at large would trickle down to the microstock space-and that time has come.
The image market has been oversaturated for years, and microstock has further exacerbated the trend. Even with the influx of new micro buyers, demand for images is not growing at rates that come anywhere near the speed of new image production. Buyer dollars are spread increasingly thinner, returning lower per-image revenues and fueling competition.
Yuri Arcurs, arguably the world's most successful microstock photographer, invested $40,000 to produce 2,000 new images over the last quarter of 2007. Yet his sales went down by 5% during the same time period. "Doing this kind of production for microstock is not worth it, and looking at it from an investment point of view, it is time to downscale or find new waters...with higher prices," Arcurs said.
Contrary to what some pro shooters believe, not all microstock contributors are amateurs with point-and-shoot cameras. Like Arcurs, some always had professional aspirations; others developed them with early success, new equipment purchases and photography classes.
These contributors are seeing declining revenues, while large agencies are continuing impressive growth. The top-tier microstocks are no longer tech-savvy kids with great ideas; these are major businesses with corporate account programs, upmarket collections and revenues that surpass many a traditional image boutique.
Dissention in the Ranks
For years, a number of professional photographers and independent stock agencies have complained about being dominated and otherwise wronged by the large corporations at the helm of the industry. Now, similar rumblings can be heard among microstock shooters.
iStockphoto's 20% commission, lowest among microstock agencies, is universally criticized-despite the fact it remains the top revenue producer, has a 40% exclusive contributor commission and upgrades its best shooters to Getty's premium brands.
Fotolia is taking lots of heat for The Infinite Collection. As predicted, forums are abuzz with criticism of what contributors see as competition from inferior yet higher-priced images.
Micro-payment Web sites with subscription products are also under fire, with many contributors reporting loss of sales through Shutterstock, 123RF and StockXpert. The nature of a subscription product leads to sales of small and large files at the same price, resulting in lower contributor royalties. In addition, contributors see subscription-product providers are unfairly pocketing the portion of a subscription cost not used up by the buyer.
This latest debate has flourished to resemble a unionized protest, with threats of agency boycotts, ongoing petitions and other strike-like fare. Lee Torrens of the Microstock Diaries is quick to point out the irony of microstockers using words like "fair" and "union." He says, "Some of those who pioneered the rock-bottom price model in defiance of protests from established professionals are now repeating those protests about their own market."
New Wave...Almost
Everyone agrees that microstock has revolutionized the industry, bringing positive and negative changes to individuals and companies. To again borrow from politics, a new order follows an overthrown regime only after a protracted period of rebuilding.Though microstock is no longer new, the industry has just entered the post-revolutionary phase. Its first signs are obvious: new distribution channels, licensing models, price points and technological innovations. These are interesting, albeit turbulent, times.