RM, RF or Micro?

Posted on 2/9/2010 by Jim Pickerell | Printable Version | Comments (7)

I was recently asked: “If you were shooting stock (hey, maybe you are…), would you be shooting for rights-managed, royalty-free, microstock or some combination?”

Personally, I think rights-managed licensing is on the way out. It would be nice if customers were willing to pay to use an image based on the value they receive, or to some degree on the cost of production. But that day seems to be passing. No matter what the subject matter, too many good alternatives are available at much lower prices. Why should customers pay more? Part of the theory behind rights-managed licensing is that customers need exclusive rights to certain images. Some do, but there are entirely too many similar images competing for those occasional exclusive sales.

Exclusive sales make sense if the photographer is producing something that fulfills a specific need for the customer, and a fee has been negotiated upfront, before the work is done—such as the case of an assignment. But they make no sense when the photographer is shooting on speculation and trying to produce what some unknown customer will want sometime in the future and when the photographer has no idea how many other photographers are simultaneously producing something similar.

Thus, rights-managed images must also be licensed for non-exclusive use, and because the price is negotiable, agencies often license rights-managed images for prices far below non-exclusive royalty-free images. The other problem with rights-managed licensing is the need to track all image use to ensure the ability to license exclusives when requested; this makes it much more difficult to broadly market an image through multiple distributors.

Royalty-free licensing has a market advantage over rights-managed because the former is non-exclusive. Thus, it is much easier to offer it for licensing through multiple distributors. However, it is much harder for the average photographer to effectively participate in the royalty-free market. Selling royalty-free images through one distributor only—which many photographers do Alamy—is not a wholly satisfactory solution, because the photographer fails to reach out to all the customers who deal with other distributors.

In addition, most royalty-free production companies want to work with a few very experienced photographers who are prepared to produce high volume. Consequently, most photographers find it very difficult to participate effectively.

The other problem with traditional royalty-free licensing is that microstock will eventually cannibalize it, because microstock offers the same unlimited use and is cheaper.

As a photographer, I have a problem with both royalty-free and microstock, because they price based on file size rather than how the image is to be used. File size has very little to do with the value the customer receives when using an image.

The use of microstock will continue to grow, while the use of images priced using the rights-managed and traditional royalty-free models will decline. However, microstock prices are so low, and the share of the fees paid to the photographer so small, that it is hard to see how a photographer can earn a reasonable amount of money for his efforts. In addition, the volume of images being added to the collections is growing at such a rapid pace that most photographers will never earn enough to justify the effort they put into producing the images and preparing them for market.

Microstock is trying to find ways to raise its prices without losing its base. It has defined different bodies of work as being of higher quality and priced these images at a higher level. The problem with this strategy is that the higher priced images will never be used by customers with limited budgets. Thus, those who only license their images at the higher prices lose potential sales. The system works for distributors, because they do not care which images sell, as long as every customer goes away with something, but on average, it does not work to the advantage of photographers.

Microstock has defined a few types of uses as requiring extended licenses, which in some cases may be negotiated. More use types should fall into the extended license category. Even as it is now, the microstock pricing system has grown into something much more complex than the pricing system for traditional royalty-free imagery—and it promises to get even more complex.

I believe we need a pricing system that makes every image available at all price points rather that arbitrarily assigning each image to a particular category of use based primarily on price. Above a certain base level, I don’t believe it is possible to define certain image groups as being of “higher quality,” because quality is in the eye of the beholder. Often, very basic images are used in ways that justify a high price and the supposed “high quality” images are just what people with small budgets need. We should forget about licensing rights to stock images for exclusive use. When someone needs exclusive rights, let them hire a photographer on assignment.

I favor a system that licenses images based on how they will initially be used, but also offers unlimited future uses. Customers demand this kind of flexibility, because they are unwilling to accurately predict or track future uses. Such a system is not perfect, but it is better than the alternatives we have today. It would be open to some misuse, but no more than the today’s misuses. It is not fair or reasonable to charge businesses the same to use an image as someone who uses it for a personal blog or a school project.

I want to believe that most customers will be honest in disclosing, to the best of their knowledge, how they intend to use the images they license. However, I also recognize that this may no longer be the way most people operate in today’s society. PicScout provides a service to search the Internet for images represented by certain agencies. The company finds that 85% of the uses it finds are unauthorized or go beyond the original license. It has also come to the attention of many in the industry that, for more than a decade, major book publishers have been printing many more copies of books than they licensed rights to print. Given these examples, perhaps there is no way for photographers to get reasonable compensation for their efforts. Maybe the whole idea of licensing stock images as a business is no longer practical for a photographer.

When I first got into stock photography in the 1960s, the idea was that stock images were outtakes from assignments, or occasionally something you shot when you had nothing better to do than sit around drinking beer. There was no great expectation of earning money from such images, but if you did, it was a windfall and not something on which you should base a business.

Most stock photographers need to return to this way of thinking. If you have the images and do not mind the extra administrative work necessary to make them available for marketing, than put them into the market and see what happens. (The administrative work was not as big a problem in the 1960s as it is today, because all you had to do was ship the raw film to your agency, and you received 50% of any sale made.) But do not expect any return and look at what you get as a windfall. If your goal is to earn a living taking pictures, then focus on projects that provide a guaranteed return when the images are delivered.

Copyright © 2010 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 www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


  • Rahul Pathak Posted Feb 10, 2010
    A thought-provoking piece, Jim. However, I'm not sure that RM is on its way out. I actually think we'll move to a model where sites like iStock will integrate RM licensing into their pricing models.

    As the stock photography market converges, I expect buyers will begin to demand some of the elements of RM licensing, such as the ability to prevent someone else from using an image for a period of time.

    No reason this licensing couldn't be introduced, especially if it improves the bottom line.

    There are also more sophisticated pricing scenarios such as end-use rev share that some companies are also exploring.

    In conclusion, I think usage-based pricing is morphing, but not going away.

  • Bill Bachmann Posted Feb 10, 2010
    I think that if you cry wolf enough, you will scare good photographers from making money in RM. As you have found when you interviewed me recently, there still are some darn good photographers making darn good money shooting only Rights Managed (if you consider 6 & 7 figures really )

    I think, as you stated rather vaguely, Rights Managed is the ONLY way to really have a CAREER as a stock shooter. As you stated, the other ways are not going to be a career, but just beer money!!


  • Gerard Fritz Posted Feb 10, 2010
    It seems Rahul's scenario is already happening. Stock agencies simply offer all options by having material in all categories...RM, RF, Micro. We will see all these images offered at the same small fees for everyday uses. But only RM will have the option of the big exclusive sale.

  • Randy & Andrea Wells Posted Feb 10, 2010
    Jim, you say, "We should forget about licensing rights to stock images for exclusive use. When someone needs exclusive rights, let them hire a photographer." Clients whose projects require exclusive rights have always had a budget for Rights Managed stock photography and they still do. I recently earned multiple thousand-dollar RM stock sales for just such usages. But stock photographers and agencies that follow your advice will never see it. You also "favor a system that licenses images based on how they will be initially used, but also offers unlimited future usages." There are certainly clients who request this kind of flexibility, but they will usually agree to an original license where additional usage is available for additional fees. And guess what, they will pay you what is rightfully yours! But photographers and agencies that give it away will never see it. Royalty Free and Microstock have not turned out to be the answer for the vast majority of photographers who were encouraged to participate and whose goal it was to earn decent money taking pictures. IMO, in the long run, neither will these new suggestions benefit income levels for your target industry or the person whose question you based your article on - the future stock photographer.


  • Peter Bennett Posted Feb 10, 2010
    I think we must step back and realize that much of what we are seeing going on is being driven by budgets forced downward by the dark economic times we are in. It becomes hard to see around the corner until you have actually turned the corner, and that could be months or even a year or so away. But a positive economy will once again drive budgets upward, and while we will never return to the stock business of even a couple of years ago, there may yet be opportunities for RM stock photography.

    How profitable it will be, and what form it will take are yet to be determined, but writing it off, as you seem to be doing, is an opinion I believe too much shaped by the dark lens you seem to be viewing things through.

  • Bill Bachmann Posted Feb 11, 2010
    Great comments from Peter and Randy! I agree and write those things always in my books & lectures. WE STILL ARE MAKING GOOD MONEY FROM EXCLUSIVE SALES and ALSO FROM RM IMAGES! No one can make money from Micro prices! (except one or two people out there)

    Stop saying the sky is falling... many of us are doing well, even in these tough times. And I agree with Peter... soon the budgets will come back again for more than we have now.


  • Maggie Hunt Posted Feb 17, 2010
    StockShop was originally a RM only agency - however, we found that there were increasing numbers of image requests that were RF only. We reluctantly added RF about nine months ago. However, we have kept the vast majority RM and these images are exclusive to StockShop - we are not using any distribution channels - which has been very attractive to art buyers and other creatives who are tired of seeing the same images across many searches.

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