Flickr To Generate Revenue For Members

Posted on 8/6/2014 by Jim Pickerell | Printable Version | Comments (0)

Flickr has announced to its community of image creators that it will be offering a licensing option, but it has failed to explain when it will happen or exactly how it will work.

A Little Background


Back in 2008 Flickr was looking for ways to monetize their collection of 2 billion images. (They have about 6 billion now.) They decided to do a deal with Getty. It was never clear what Flickr got out of this deal, but it certainly wasn’t very much.



Getty’s curatorial team began scouring the image collection for images they would like to represent. Then they contacted the image creator and offered that creator an exclusive contract. Accepted images were integrated into the Getty search system. Later a system was set up that allowed Flickr creators to request that Getty consider their work.

Flickr images became a major source of new content for Getty and they began ranking them higher in their search return order than many of the images produced by photographers in their in-house collections, and most of the images from their third party collection. As of March 2014 there were 882,334 Flickr images on the Creative Stock Images section of its site representing about 9% of all the images in Getty’s Creative Stills collection.

Based on their proportion of total images in the collection, I estimate that the Flickr images represented about $27 million in annual revenue for Getty. Based on where the images appeared in the search-return-order the revenue could have been even higher, but I doubt if it was lower. Getty also represented some photographers when an image buyer found an image they want to license by searching Flickr. The photographer would refer the customer to Getty and Getty would handle negotiations. I have no idea how frequently this happened, or how much revenue it generated for Getty.



Nevertheless, in March Getty announced that it was terminating its agreement with Flickr. It seems likely that Flickr was asking for a much larger share of revenue generated by Flickr images than Getty was willing to give.

Going Forward


In its announcement last week Flickr told it member, “Our curatorial team will provide assistance, outreach and connectivity to help you get your photos licensed!”



Up to now, Flickr hasn’t really curated images based on what is in demand for licensing. Anything that any contributor wanted to post got posted. Curation expertise was supplied by Getty based on Getty’s knowledge of what was selling. I doubt Flickr has that knowledge. At the very least, if they intend to do the curation themselves, they will have to build a curatorial team and that will be costly.

The next confusing part of the Flickr announcement is that they says the company will, “partner with photo agencies, editors, bloggers and other creative minds who are seeking original content like yours.”

Note that “agencies” is plural seeming to indicate that they will partner with more than one. How will those partnerships work? Will they encourage multiple agencies to search the Flickr collection (that could solve their curation problem) for images they believe they could license? Then each agency could offer each creator a separate representation contract. Will the contracts be exclusive, or non-exclusive or might different agencies offer both models?

Assuming that Flickr will develop a list of members who are interested in licensing rights to their images, will Flickr then make it possible for curators to search only that portion of the collection that includes creators interested in licensing their work? (Many Flickr contributors have posted personal images on the site and are not interested in licensing those images. In addition, a large portion to Flickr contributors offer “Creative Commons Licenses.” They are happy to have their images used in many ways without compensation. It would be a waste of a curator’s time to search through these images.)

Then Flickr says it will partner with “editors, bloggers and other creative minds.” This tends to indicate that they have some plan for direct licensing to such users. If they do, will their prices undercut any arrangement they might have with agencies? What will it cost Flickr to operate a licensing operation like Getty or a microstock site?

If they license images directly they have two big legal challenges. They will need to insure that all images in the program are properly released and were created by the Flickr member, not an image the member grabbed from another site and posted just because he liked it. The most likely way to solve this problem is to require Flickr members to legally indemnify Flickr in the event that any of the images in their collection are not properly released, or were created by someone other than the collection owner.

Why The Announcement Now


Why did Flickr make this announcement now without being able to provide much in the way of an explanation of how it will work?

Yahoo! revenues have been declining. It seems likely that there has been pressure on all divisions to show how they can grow revenue. On July 15th Yahoo! reported revenues were down 3% for the second quarter year-on-year. That has continued to disappoint the markets.

But, how much real profit is this move likely to generate for Flickr. How will Flickr be compensated and how much is that likely to be? If agencies will be doing the licensing, will they be remitting royalties directly to the image creators, or to Flickr for distribution to the creators?

If the agencies remit to Flickr, what percentage of the true gross sale will creators actually receive? Will agencies pay Flickr a percentage of the gross license fee or a flat annual fee for access to the work of Flickr contributors?

If Flickr licenses uses direct to the end user will the fees charged undercut fees the agencies might charge. What royalty percentage will Flickr pay image creators? Will Flickr’s percent of revenue generated be enough to offset operating costs?

The announcement raises more questions than it provides answers. There may be an opportunity for some agencies, but details of the offer will need to be examined very carefully. It is entirely possible that most agencies will find that it will cost more to participate than any profit participation might generate.


Copyright © 2014 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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