CEPIC 2010: State of the Industry

Posted on 6/14/2010 by Jim Pickerell | Printable Version | Comments (0)

If you are in the stock imagery business and want to stay current with worldwide industry trends, the annual CEPIC congress is a must-attend event. Held every year in early June—this year in Dublin, Ireland, at the brand new Aviva Stadium—the congress provides an opportunity to meet industry leaders and exchange ideas.

This year, there were over 580 individual attendees from over 300 companies and 31 countries. Most of the attendees were either producers or distributors of stock photos and illustrations. A little over 10% of the companies and organizations in attendance supply services to photographers and/or distributors. One hundred organizations had tables where they could meet with customers. Six service companies had stands in the central foyer where they could easily demonstrate their wares and 7 companies had private rooms where they met with potential customers.

New statistics: iStockphoto reports having 6 million member (customers and contributors), 100,000 contributors, iStockphoto reports having 6 million member (customers and contributors), 100,000 contributors, 6,956,000 online files, 47,000 new files every week and $1.7 million weekly contributor payout.
Traditionally, CEPIC has focused on the needs of those who license rights to traditional customers, mostly larger commercial organizations. This year, a full day was devoted to a New Media Conference—largely on microstock. This event was very well attended by traditional sellers, many still wary of microstock and not ready to embrace it fully, but also accepting that the $400 million a year business is a major force in the industry and is here to stay.

Recovering… maybe

The general consensus among attendees seemed to be that 2009 was a very bad year, but the first half of 2010 has recovered somewhat. However, revenue is nowhere near back to where it was in 2008. There also seems to be general agreement that even if—or when—there is economic recovery, sales of still photography at traditional prices are unlikely to ever get back to where they used to be.

The three major reasons for this belief are: (1) the decline in the use of printed products, (2) a general decline in pricing for print uses which cannot be turned around due in large part due to the existence of microstock, and (3) prices for Internet use that are generally 10% or less of those previously charged to reach a similar number of customers with a printed product.

Couple these changes with the fact that the cost of image production has never been considered when establishing fees for stock photo usage, and what used to be an interesting business for image producers has now become uneconomic for many and led to a decline in new production by many of those who formerly earned their living from producing stock images.

Protecting intellectual property

Many are focused on the importance of finding ways to protect intellectual property. The difficulty they confront is in getting legislation, and then enforcing the laws, in ways that will provide protection. Despite the expenditure of great effort, all that seems to have been achieved so far is a temporary, largely ineffective holding action with little hope of real and lasting success. Given the technological advances and the consumer desire for everything to be free others believe the only solution is to keep production costs low enough, and make the service offering so efficient, that the price charged for a usage will be less than it would cost the consumer - in time and energy - to steal something else (the iTunes model). While there will undoubtedly be a continued flow or new images if this model becomes the norm, it seems highly unlikely that revenue will offset the cost of production. There is no consensus on this issue and no assurance that either strategy will eventually work.

Responding to demand for video

There was much talk about the increasing demand for video that will be used on the Internet. Some interesting statistics were made available in this regard. According to Alexa and Comscore 68% of all U.S. Web sites use video. That doesn’t necessarily mean they have lots of video, but they at least have some links that go to YouTube and Vimeo. 91% of all traffic on the Internet is video (which probably refers to bandwidth). In the general meeting when Franck Perrier asked how many were producing or offering video only a couple hands went up. Certainly traditional producers and suppliers of stock photography are way behind customer demand in this regard.

When it comes to video microstock sellers with their focus on Web users may be much better positioned to take advantage of this new market than those who have been producing video for TV and corporate users. Simon Krzic, a videographer represented exclusively by iStockphoto and Getty Images spoke on one panel. In about 4 years he has produced 15,000 clips for iStock and 3,500 clips for Getty. Many of the clips that are on iStock Getty would not accept. At one point 10% of the clips on iStock were his. Now, his ratio is about 5%. Currently, his earnings from iStock are 4 to 5 times what he receives from Getty on a monthly basis, despite the fact when Getty sells a clip it is for a much higher price.

Because he is exclusive with iStock Simon gets favored positions in the search return order and receives 40% instead of 20% of the gross fee charged. But, even taking these facts into account other non-exclusive photographers who have video on iStock, Pond5 and other microstock sellers tell me that they can earn more from their combined royalty free sales than they earn from Getty.

There is a steep learning curve for still photographers who want to switch to video, but it certainly seems to be a future opportunity.


Many attendees are beginning to focus on looking for new lines of business. This is particularly true for those who don’t have a protected niche. Such businesses might have some relationship to the licensing of photography, but that doesn’t necessarily seem to be a requirement. Many sellers are facing situations where there is a great oversupply of the kind of imagery they offer and competitors are going after their customers. Many are ready to cash out. There are a few willing buyers but they are finding that most sellers have very inflated ideas about what their companies might be worth.

Companies used to sell for 2, 3 and more times gross revenue when Getty was on a rampage to buy control of the market. Now they are worth, at most, 5 times EBITDA which isn’t much when profits are down. I know of a couple photographers who have sold rights to their collections for an upfront payment of what the collection is expected to earn for the photographer in the next 12 months. If it doesn’t earn as much as the prepayment, the photographer will need to return the difference to the buyer. If the collection earns more the photographer receives the balance, but after 12 months the buyer owns the copyrights outright. This offer has only been made for digital files that are properly keyworded, captioned, released and ready for immediate marketing.

Broadening distribution

In the past few years there has been a great focus among image sellers in finding more distributors for their collections. It used to be a point of honor to talk about the number of companies that were distributing your work. Now many suppliers have come to recognize that even when they have 50 to 100 distributors around the world most of the revenue is generated by a very a very small percentage of them. Many suppliers seem to have decided that while, at first glance, a $1,000 a month is sales would seem to be better than nothing the hassle of setting up the arrangement and continually supplying images is more trouble than it is worth. Consequently, suppliers are terminating some of their distributor relationship, and being much more cautious about ones they enter into.

iPad proliferation

New statistics: 80% of people under 25 buy PCs, 50% would prefer to their information get from mobile devices.
A huge number of people were using iPads to show their work. This was all the more surprising since the iPad has just gone on sale in Europe. This crowd certainly seems to think that the iPad will be part of their future. So far Apple has sold 2 million iPads. It is predicted that by 2015 there will be 57 million users of tablets (iPads and those of other manufacturers) worldwide.

Rethinking concepts

Think stories. Script the story before you shoot. Don’t try to shoot a bunch of pictures and then fit a story around them. There will be an increasing demand for stories, rather than single images. In order to be successful in the future photographers will need to have the ability to put together multimedia or video stories, rather than just producing exciting single images.

New statistics: iStockphoto reports having 6 million member (customers and contributors), 100,000 contributors, 6,956,000 online files, 47,000 new files every week and $1.7 million weekly contributor payout.

Copyright © 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.  


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