Extended Licenses for Web Use

Posted on 4/18/2011 by Jim Pickerell | Printable Version | Comments (2)

In the microstock world, when establishing prices for online image use distributors should consider developing ways to distinguish between personal or social media uses and those for commercial purposes. Customers who use images for commercial purposes, and earn revenue as a result, should be charged more than those whose image use is for personal, non-revenue generating purposes. On the print side of the business microstock sellers have already solved this problem to a degree. They charge more for larger file sizes that are commonly needed for print uses, and even more when print uses are expected to exceed 500,000 copies.

But, it won’t be long until many of those print uses disappear and most commercial customers will only need the smallest file sizes for online use. That could mean a significant decline in the licensing of large file sizes.

When that happens, microstock distributors have three choices if they want to continue to grow revenue.

    1 -Raise prices across the board.
    2 - Reduce the percentage they pay creators.
    3 - Introduce a strategy to charge more for certain types of web use.
If they raise the web use price too high they will start to see customers go to other sources where they can get images for lower prices or free. iStockphoto may already be seeing the start of this trend as the cost for many images of the smallest file size is $3.08. With the high priced brands like Vetta and The Agency Collection the company seems to have given up the idea of even trying to sell to web users because the lowest priced file size is so expensive. That may be fine as long as there is plenty of demand for print uses, but somewhere down the road that will change.

It is also worth noting that this is what happened with traditional RF. Initially, the smallest files were very inexpensive, but there came a point around 2001 when there was no longer growth in the number of images being uses. To grow revenue all the distributors started raising prices. Eventually the prices – even those for small file sizes --got so high that many customers could no longer afford to buy RF images for web uses. That’s when microstock came into existence.

Instead of constantly raising prices for these small uses, a better strategy might be to put limitations on certain types of web uses. With the “Extended License” model there is already a vehicle for doing this. An extended license for web use might work something like this.

There would be two web use prices – one for personal and one for commercial. Personal uses could remain unlimited, but the standard license for a commercial use would be two years. The commercial use would be priced slightly higher than the personal use. But, near the end of the two year license the commercial customer would automatically receive an email notice saying something like:
    On xx/xx/xxxx you purchased a two years license for personal, non-commercial web use of the attached image. That license is about to expire. You may renew it here. Otherwise, you need to remove the image from your web site.
By clicking “here” the customers gets two Extended License options, one to renew the license for another two years for the same number of credits as they used to purchase the first license (credit prices may have risen in the intervening period), or an option to buy an unlimited license for 5 times the standard fee.

The “Personal Web Use” license should be available to those who intend to use the image on a personal or social media web site, or in a power point presentation so long as the image is not used to promote a product or service and no fee is charged for access to the web site. With this language educational publisher who charge a fee for access to their sites and small businesses that use their sites to promote a product or service would not qualify for “personal use” and would need to initially license rights to use the more expensive file.

If a customer fails to pay the extended license fee and continues to use the image there may be no practical way to pursue an infringement. The cost of pursuit would be prohibitive. However, if it is determined that the customer is continuing to use images without paying the renewal fee the customer’s right to purchase additional images might be terminated.

While preventing the occasional infringement might be difficult the microstock system of licensing has demonstrated that as long as the fee seems reasonable many customers are willing to pay to use the images they need rather than relying entirely on free images or stealing.

Copyright © 2011 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.  


  • Robert Henson Posted Apr 18, 2011
    Great post, Jim. It might be worth noting that personal web use inherits advertising revenue via links, which adds further convolution to what is personal, what is editorial and what is commercial. Social applications and the blogosphere are quick to adopt advertising, further marginalizing content owners.

  • Ellen Boughn Posted Apr 18, 2011
    I don't think that microstock will adapt a macrostock pricing mode as you suggest. After all one of the reasons for the success of microstock is the open ended uses.

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