2011 may be the year when the stock photo industry returns to the idea of exclusive representation -- specifically, being exclusive with a microstock agency.
For many year the widely held belief has been that the way to maximize returns was to get your images represented by many distributors. When possible, the best solution for the image producer was to get the same images represented by many distributors, but at the very least the producer wanted the ability to put different images with several different collections and distributors in order to have a better chance to reach all the customers and to spread ones risk.
Now, iStockphoto’s has developed an exclusive strategy that may bring about a change in this way of thinking. While there are several downsides for image producers to the iStock strategy, the upsides may more that compensate for the difficulties.
Downisdes
Before being allowed to sign up as an iStock exclusive contributor photographers must contribute images on a non-exclusive basis and have at least 250 downloads. (Based on
istockcharts figures, only about 14,000 of its more than 90,000 contributors have enough downloads to go exclusive. However, probably less than 7,500 are actually represented exclusively by iStock. Some who qualify on the basis of downloads may not qualify for other reasons.)
Exclusive contributors must also have a minimum 50% approval rating of submitted images and no royalty-free stock images with any other agencies or businesses with the exception of Getty Images. This includes royalty-free priced at traditional levels.
The no other royalty-free images with anyone else makes it extremely difficult for many photographers to participate in iStock’s exclusive program. Many are earning significant amounts of money from other non-microstock collections. They would have to pull all those images, and give up all that revenue before they would be allowed to become exclusive iStock contributor.
In some cases the contracts of these photographers will not allow them to pull images quickly. In addition, if they were to pull them there is no guarantee that iStock would add them to its collection and give the images some chance of earning additional revenue in the future.
Another big disadvantage is that rejected images are not allowed to be offered for sale elsewhere. The photographer may not give such images way for free either on his or her own or another site. However, the images may be licensed as rights-managed. Despite these disadvantages the advantages may outweigh them.
Advantages
Among the big advantages of any microstock offering is that the image supplier may get more images into play than with a traditional royalty-free company. After production, the images are made available for purchase in a much more timely manner than is the case in the traditional environment. Sales can be tracked on a daily basis to determine which subjects are in demand and which aren’t. Royalty payments are made whenever the image supplier requests them provided the balance due is at least $100.00. And finally, it is not unusual for microstock contributors to make 10, 20 and more times the number of sales as they might make if their images were licensed at traditional prices.
iStock has recently established multiple collections at different price points where exclusive contributors can place their images. Photographers must be exclusive with iStock to participate in these collections. These collections are Exclusive, Exclusive+, Vetta and the Agency collection. For more information about the prices to use images in these collections see
iStockphoto: Sales Down, Revenue Up. Some of these collections have been operating for less than a year and yet it appears that many of iStock’s customers are more than willing to pay the higher prices to use the images in these collections.
In 2010 some exclusive contributors earned an average of between $5.00 and $8.00 per image downloaded depending on how many images they had in the higher priced collections. To some that may not seem like much, but keep in mind how many times each image sells. In addition it seems clear that these average rates will go up in 2011 as the higher priced collections get a full year to deliver results.
Other factors that seem likely to occur are that exclusive photographers will be allowed to place more images in the high priced collections. Right now photographers are allowed to designate a certain number of images -- in some cases as much as 20% of the total images in their collections -- to be licensed at Exclusive+ prices. In addition, the prices in terms of number of credits required to purchase a particular file size will be raised and the fees charged to purchase a package of credits will increase.
When considering whether to offer non-editorial images as RM, traditional RF or Microstock it is important to recognize that less than 2% of all commercially oriented images are licensed as RM, less than 4% are sold at traditional RF prices and well over 90% of all images are licensed as microstock. The odds that anyone will even see your image and greatly reduced if it is not offered as microstock.
Another factor to consider is that iStock appears to be favoring exclusive photographers over those who are non-exclusive. Certainly, with the changes in the 2011 royalty structure exclusive photographers whose images tend to be licensed for more credits were treated better than those who are non-exclusive. Given the discussion on the blogs it seems likely that many of iStocks non-exclusive contributors will pull out of the agency. That doesn’t seem to bother iStock as it pushes toward developing an offering that aims more toward supplying images to high end users and less toward the small player who purchases an occasional image for small uses or for a web site.
Since May of 2009, I have been tracking information for 198 of the leading iStockphoto sellers based on istockcharts data. (http://istockcharts.multimedia.de/) IStockcharts currently follows the sales and other data of 36,781 of iStockphoto’s more than 90,000 contributors. I estimate that in 2010 the images of this small group of suppliers represented in excess of 20% of all the images downloaded from iStock. The vast majority of this group are exclusive contributors.
As of December 31, 2010 this group of 198 had a total of 611,462 images in the iStock collection, or something in the range of 7.5% of the total collection. Thus, their images sell at a much higher rate than the images of other in the collection.
If we look at the top 1% of the collection’s contributors in terms of total images downloaded over the contributor’s lifetime with iStock, I estimate that something in the range of 50% to 70% of all iStock sales come from the images of this group. It seems to me that iStock is on track to narrow its total number of contributors and to not grow the collection a great deal in terms of number of images. Rather the company will focus on improving the overall quality. They want to sell more to the higher paying customers and are less worried about selling to the masses. Already there are indications from those who report their sales on the blogs that iStock sales for non-exclusive contributors are declining and that many of the low end customers seem to be turning to Sutterstock and some of the other major microstock sites.
Based on the data from the 198 I have tracked since 2009, I believe iStocks overall number of units licensed in 2010 was probably in the range of 23 million and that was about 9% less than the number licensed in 2009. Despite the decline in the number of units licensed, the revenue generated probably rose from around $200 million in 2009 to about $300 million in 2010 due to increased prices. Undoubtedly, we will see more growth in 2011 and the exclusive contributors will be the ones who benefit the most.