News Analysis
This month saw the launch of Celebrity Extra, the first of a multimillion-dollar group of new entertainment-focused news products from the Associated Press. Focusing on A-list stars, Celebrity Extra video is available now, and a photo service is scheduled to launch in September.
The stock-image industry faces a daunting challenge. While there is general consensus that online use of images is among the hottest growth opportunities, little is known about the buyers driving the trend. Larger agencies can gain some image-specific insight from analyzing transaction data or commissioning in-house research; however, much general information is freely available online.
Though researchers using different methodologies often arrive at different figures, most experts agree that digital media is on the rise. Specifically, researchers are putting emphasis on interactive advertising's growth as a percentage of total ad spending.
While finding distributors for one's production has always been a key aspect of the CEPIC Congress, there was a greater sense of urgency this year. One producer, Alex Mares-Manton of Asia Images, reported that in two-and-one-half days at CEPIC he was able to sign contracts with 14 distributors and complete handshake deals with 46 others.
Return-per-Image (RPI) may offer a false sense of return-on-investment. Photographers would be better advised to calculate return-per-shoot. Before microstock, stock distributors were clamoring for more RF, but demand has changed. At the recent CEPIC Congress, distributors were looking for RM collections. Photographers need to carefully determine which model is more advantageous for them.
The Associated Press has often been the subject of criticism among freelance photographers, whose complaints have ranged from low rates to corporate policies. As a result of several new policies, this summer has seen a surge in negative coverage of the news conglomerate among photography, online-publishing and the AP's core newspaper markets. There are also indications that the once-unshakable monopoly is beginning to lose bread-and-butter clients.
When I argued at the recent CEPIC conference in Malta that stock photo prices should be based on end use, one RF distributor asked, "Why is use pricing fair? When you buy a pencil, the price is the same regardless of how it will be used. Shouldn't photos be priced in the same way?" The answer is no.
I believe the gross worldwide revenue generated from the licensing of stock imagery, both still photos and illustrations, is about $1.8 billion annually. This article focuses on licensing rights to stock imagery. The figures include wire service imagery made available through subscriptions and all other subscription products.
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.
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.
The Getty-owned microstock announced it will launch a royalty-free audio service in September. In addition to holding the record for the total number of stock-licensing transactions, this addition makes iStock the first company to offer still photography, illustration, Flash files, video and audio in one place, under one payment model.
According to Nancy Wolff, the legal counsel of the Picture Archive Council of America and the PLUS Coalition, the congressional version of the Orphan Works Bill of 2008 is an improvement. By contrast, Atlanta attorney Carolyn Wright thinks both the House and Senate versions of the bill pose an extreme threat to copyright owners.
iStockphoto's Q1 2008 revenue increase was impressive compared to Q4 2007, but many image producers are worried about the declining number of downloads. Till the end of last year, virtually all iStock suppliers with reasonably sized collections could count on downloads and revenue rising steadily month to month.
Corbis has launched a set of new tools that target interactive-ad creatives. Among these is a pricing plan that allows high-end royalty-free images from dozens of producers to be licensed for $15 to $95. While price reductions for online image uses have been sweeping the industry over several months, this is the first public announcement of a cost as low as $15 from a major player.
One of the three major political parties of Malaysia may have to go to court to defend itself against charges of unauthorized image use. The issues raised by the case, which concerns a campaign in last month's general election, are commonplace in the global stock licensing industry. It echoes those of several other ongoing legal proceedings.
Last week, Digital Railroad and the Midwest chapter of the American Society of Media Photographers organized a Chicago image-buyer roundtable. The panel included local advertising, corporate and publishing executives, who offered a rosy perspective on the state of the stock-licensing industry.
Many image producers and distributors like to show slight variations of a situation on the theory that some customers may want a horizontal rather than a vertical, or a different expression, or a medium shot vs. a close-up. But to maximize sales of all subjects it is extremely important to be cognizant of the search engine's strategy for delivering search returns.
In a world of ailing giants and their low-priced rivals, 3-year-old PhotoShelter is beginning to look like a serious contender for shooters and buyers seeking alternatives.
While there is still a large gap between traditional royalty-free and microstock, image pricing and contributor commissions are rising at leading microstock Web sites. Even with recessionary woes, there are no signs of a slowdown in the micro segment.
The colossal effect of the micro-payment model on traditional stock licensing is often described in political language. Jupitermedia CEO Alan Meckler favors the phrase, "microstock revolution." The revolution is maturing -- and so are the demands of its adherents.
In the summer of 2003, I put together a list of leading companies in the industry, and I have tried to update it periodically. Here is a comprehensive list of the world's major picture libraries and portals that produce and license rights to still images.
Citizen photography has hit the majors. Last week, leading global news service Agence France-Presse took a 30% stake in the Paris -based citizen journalism company Scooplive. French firm IAM also took a 30% minority stake in the online film and photo platform.
"In one respect, I always think it is unfortunate when a brilliant independent company is swallowed by a whale," says Steve Pigeon, president of Canada-based Masterfile. While Pigeon is a pragmatic man who thinks the recent Corbis acquisition of Veer was a good move for the two companies, the erosion of independent agencies is often lamented by industry insiders.
There is a lot of talk of recession, but so far the U.S. economy is not considered to be in one. However, recession, defined as two or three consecutive quarters of decline in economic activity, may already be here for the stock photo industry. The revenue numbers below are in millions for the industry's three publicly held companies:Getty Images, Jupiterimages and a21.
In July Mike Watson launched moodboard.com and introduced a new usage-based pricing strategy for the high end RF images offered by his agency. These images are available under the brand name moodboard+. moodboard has just announced that they have licensed an RF image for non-exclusive usage for a fee of over $1,000, a price they believe is a new record for a non-exclusive sale of an RF image.