In a recent speech to business leaders in Atlanta, Carly Fiorina, former Hewlett Packard CEO, said today's leaders need to look beyond quarterly financial reports and other backward-looking indicators and focus on the pace of innovation in their industries and the diversity of their customer base.
RM and traditional RF sellers are only addressing 10% to 15% of the total market for stock images. Some readers asked how I arrived at that number. First, this is the percent of images licensed, not revenue. That 10% to 15% of images used represents about 90% of current revenue. The other 85% of images used is responsible for only 8% to 10% of revenue. However, there are strong indications the revenue relationships are about to change dramatically - and not in favor of RM and traditional RF sellers.
Internet advertising revenues reached an all-time high of $21.7 billion in 2007, according to the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers. This was 26% higher than 2006 and surpassed radio advertising and cable television advertising in total U.S. ad spending.
On a company basis, the best year-to-year percentage of growth overall came from Alamy with 18%, even though Getty Images had a respectable 10% growth overall on a much higher gross revenue. And, of course, one division of Getty, iStockphoto, had an amazing 124% growth. But we need to look closer at the actual numbers.
Alamy had gross sales in Q1 2008 of $8,097,000, up 18% from Q1 2007. 56% of the revenue for the quarter came from images submitted by photographers and 44% from agencies.
a21, Inc. has reported Q1 results of $5,107,000, down 17% from it's the same period last year. The SuperStock division had revenues of $2,615,000, down 11% from Q4 2007 and 17% from a year earlier.
Jupitermedia's Q1 2008 revenues were $34.5 million down from $36.1 million in Q4 2007 and below the company's estimate of $35 to $36 million announced in March of this year. First-quarter revenue was down slightly from $34.8 million in the same period in 2007. Total revenue for the online images segment of their business continued a steady slide to $26.142 million, down 9% and $1.8 million from Q1 2007 revenue of $27.914 million.
Royalties are changing as the business changes. It's helpful to learn to adapt to new realities in the RM/RF marketplace.
RM and traditional RF photographers complain about declining incomes and the difficulty in getting information from the companies that represent their work. Traditional distributors might do well to adopt a number of ideas popularized by microstock, to improve relationships between photographers and distributors.
For photographers, there are three ways to showcase photos: building your own site, traditional agencies and microstock. All carry pros and cons. The more informed your are, the better it will be.