In response to “Stock Photo Lottery,” Bill Bachmann said: “I don’t know where you get the idea that 1% of images are sold are RM. I think you are pulling that figure out of a hat.”
Based on Getty Images’ figures at the end of 2007, the company licensed rights to about 600,000 rights-managed images a year. They also licensed rights to a little over 1 million royalty-free images. At the same time, Goldman Sachs predicted that Getty’s Creative Stills revenue (rights-managed and royalty-free) would decline about 39% by 2012. These figures were developed before the recession, so it is entirely possible that Getty’s current numbers are already down by that much or more.
Photographers tell us their Creative Stills royalty payments are down significantly, but that could be because Getty is licensing rights to images at much lower prices than in 2007. As such, let’s assume that the number of images licensed has remained the same.
After doing some interpolation of Alamy’s 2007 figures, the company appears to have licensed rights to less than 200,000 images that year. We know that Alamy’s revenue was down about 30% in 2009, but this has been due to a decline in the price per image, not a significant decline in the total quantity of images licensed.
I believe that Getty Images licenses between one-third and half of all the rights-managed and traditional royalty-free images worldwide. Thus, based mostly on Getty’s figures, I put the worldwide rights-managed total of images licensed at 1.5 million and double that number for traditional royalty-free images.
Microstock and subscription
iStockphoto had licensed rights to 17.55 million images in 2007. In 2009, iStock said that gross revenue for the year would exceed $200 million. Using the average royalties many photographers reported, I was able to estimate the average fee per download; that number yields between 25 and 30 million images licensed by iStock in 2009.
In addition to iStock, there are many other microstock sellers— Dreamstime, Fotolia and 123RF—generating significant sales. Many photographers who are represented by all these brands report that iStock is their second or third most-productive agency, and that they earn more from the combined total of all the others than from iStock alone.
Then there is the subscription seller Shutterstock, which recently disclosed that it has licensed rights to 125,000,000 images since 2003. There is every indication from contributors that the number of annual sales has been growing steadily, with an estimated 30 million to 35 million of downloads in 2009.
Together, iStock, two or three other big microstock agencies and Shutterstock could have easily had in excess of 90 million downloads in 2009. And then there was Jupiterimages’ big subscription operation (since updated into Thinkstock).
Finally, let’s not forget all the editorial subscription sales made by Getty Images, AP, Reuters, Bloomberg and AFP. Putting all the microstock and subscription licenses together, the total sales in this category were certainly well over 100 million in 2009 compared with 1.5 million rights-managed sales. Maybe worldwide rights-managed licenses represented a little more than 1% of all image licenses, but they certainly did not reach 2%.
One photographer’s odyssey
Recently, I talked with a photographer who in the past had been very successful at licensing his stock images as rights-managed through Getty and Corbis. However, in the last year he has stopped submitting images to his rights-managed agencies and is putting all new production into microstock. He has made a significant number of sales—one image has sold 320 times—but still isn’t realizing a profit.
He decided to go the microstock route because his rights-managed sales have been falling dramatically for several years, as was his average return per sale. In addition, it has been much more difficult to get new images accepted into the rights-managed files.
Another problem with rights-managed licensing is the lack of sales data to help this photographer determine where he should expend his future production efforts. With a rights-managed image, it usually takes several months for the image to become available in the agency’s database. Because it is rights-managed, only a small fraction of all the customers looking for images see it, and it takes some time before the image has a chance to make a sale.
Once licensed, months go by before the fee is collected and reported. If a sub-agency was involved, the reporting period is further extended. This photographer finds that on average, it takes two years after image submission to find out whether or not it is selling.
Images submitted to microstock are usually available to customers within two weeks to a month and often start selling immediately. The instant an image is downloaded, the photographer’s earnings are credited to his account, which he can review at any time.
On many microstock sites, this photographer can also see how other images in a particular category are selling, and which ones are the best sellers. This gives him data on which to base future production decisions.
Microstock may not be the answer. It may be reaching a plateau. But in the current environment, it is hard to argue that rights-managed is the answer either. A few photographers will profit from selling microstock, and a few like Bill Bachmann and Jim Erickson—from selling rights-managed. If the photographer has nothing better to do with his time, does not need to purchase equipment and is going to take the pictures anyway, then there is no cost of production and anything earned from the image, regardless of whether it is licensed as microstock or rights-managed, is viewed as profit. But few people do not have some type of costs. Photographers with extensive rights-managed files and long experience shooting rights-managed imagery may want to continue, but for someone just starting out and hoping to make photography a career of stock photography—regardless of how the image is licensed—may not be the best choice.