Future Of Licensing

Posted on 3/1/2012 by Jim Pickerell | Printable Version | Comments (1)

ASMP’s “The Future of Licensing” webinar with Frederic Haber, of the Copyright Clearance Center; Henry Oh, entrepreneur and digital content distributor; Eugene Mopsik, Executive Director of ASMP and Richard Kelly, moderator was held yesterday and can be downloaded here. Licensing was defined as a process that allows a customer to use something that is too expensive for them to own outright.

In promoting the webinar ASMP said, “In a world where visual content can be infinitely repurposed, reused and reproduced with no loss of quality and minimal expense, the role of copyright and licensing grows increasingly unclear.”

I believe the future of licensing photography is very clear – it’s just not what photographers want it to be. As a result of the development of digital technology licensing secondary uses will become an increasingly marginal activity for the professional photographer. To a large degree the first license will be all you get. There seems to be very little that can be done to alter that fact.

Full disclosure. The speakers had some important things to say, but were generally more optimistic than I am. This article is not a summary of what the speakers said. Rather it is my point of view on the subject. You’ll need to listen to the webinar to understand the positions of the speakers.

Once the automobile was invented there was very little that could be done to convince people to continue to travel using a horse and buggy. Once the personal computer was invented there was very little that could be done to convince people to continue to use typewriters. Digital delivery of imagery has changed everything.

Photographers will continue to negotiate licenses for assignment work. The licenses will define how the customer may use the work for a certain fee. The advantage of such agreements is that they are in place before the photographer is expected to begin producing the required photographs. If the negotiated fee is insufficient to cover the photographer’s costs and profit he/she can reject the commission.

Assignment customers will ask for, and expect, much broader rights than in the past, and will resist paying anything additional for those additional rights. The likelihood of additional uses after the initial license will become increasingly rare.

Stock Photography

In the stock photo arena there are two distinctive groups of customers. One group includes the traditional corporate and large business customers. In the other group you will find the small business and personal users. The picture needs of these customers tend to be occasional. They are also very price sensitive.

In the ‘90s it was generally believed there were a maximum of 350,000 professional buyers of images worldwide. Many large distributors focused on no more than 40,000 to 50,000 of them. Now, Dreamstime says it has 4.2 million customers and iStockphoto probably has many more. I estimate that worldwide in 2011 less than 4.5 million images were licensed for use at anything approaching traditional prices. The number of images licensed in this manner and the average price is declining steadily. There is certainly no growth in the number of large users and many segments of the market are certainly seeing a decline.

All the growth is in small users. In 2011 over 100 million images were licensed for use at microstock prices or part of low priced subscriptions. In addition untold numbers of images were downloaded from the Internet and used without compensating the creator in any way whatsoever.  

Does The Copyright Law Provide Protection?

Unfortunately, the copyright law is unlikely to discourage small infringers. In the first place most don’t understand what is legal and what isn’t. More to the point the cost of pursuing an infringer who didn’t make a very broad use and doesn’t have deep pockets is prohibitive. Large volume users are more likely to abide by the copyright law because they have more at risk. However, it is important to consider the implications of what has happened in the educational publishing environment over the past decade.

There is widespread evidence that publishers have ignored the contractual terms of the licenses they agreed to, made significant unauthorized uses and attempted to hide those uses. When caught they act in one of the following ways. (1) They do everything to hide their actions. (2) They do everything they can to pervert the legal system to their advantage. They delay legal settlements with the hope of wearing down creators who have limited financial resources and getting them to eventually settle for less money. They also hope that if they appeal often enough some court will eventually find in their favor. At the very least, they delay any settlement. (3) When dealing with new acquisitions they structure new take-it-or-leave-it contracts in ways that are much more favorable to them. In effect the license turns into a one-time buyout for any conceivable need they might have in the future, not a license with any limits.

In addition, as is the case with assignment photography, stock customers will ask for, and expect, much broader rights than was the case in the past. They will also resist paying anything additional for those rights. Part of the reason they get more for less is that there are now many more satisfactory photo options that will fulfill their needs than was previously the case.


As supply continues to grow much faster than demand creators will agree to prices that are well below their cost of production because it will be the only way they can earn anything for their work.

For most creators licensing becomes, at best, a way to slightly supplement some other primary income, not a sole income source. And the time required to earn this licensing income for secondary sales will be tremendously disproportionate to the time required to earn ones primary income. The only way professional photographers will be able to earn a living is to specialize in producing images that customers must have, and which cannot be obtained in any way other than by hiring someone to produce the image. Generic stock will not fall into this category.

Distributors will put together collections and market those collections, but less and less of the money generated from distribution will find its way to the original creator. The distributor will not be able to charge much more for the products it supplies than what it costs to operate the distribution system.

Pricing Small Uses

The general public is willing to pay for services related to photography such as organizing a collection in a way that makes it easy for them to quickly find what they want, and thus saves them time. But, they seem unwilling to ascribe any value to the image itself. The general public believes images should be free. Most customers only want to pay for the convenience factor -- the value of the time they save. This explains the success of microstock. As microstock prices rise fewer people use microstock. They turn to other less expensive, or free, ways to get the images they need. (PicScout says that 85% of the professional images they find on the Internet have not been properly licensed.)

So What Are Professionals To Do?

Adjust their businesses. Concentrate on producing images that can not be replaced with stock such as personal portraits, weddings, product illustrations for the manufacturer, fashion for the marketing of the product, etc.

Expect to get 100% of the revenue needed to operate their business and support themselves from either assignment work or as a staff position.

Whenever possible, write licenses in a way that allows for secondary marketing of the images created. Consider placing these images into the stock market as a way of earning a little supplemental income. But do not expect significant additional revenue and carefully track the time required to engage in this activity. It is very likely that the photographer will find that time spent in this activity would be better spent doing something that would generate more assignment work, or something else entirely.

Recognize that the growth segment of the market will be small users who will pay more for convenience than the value of the image. For a very small number of photographers the volume of sales will be enough to generate significant money. But, for the vast majority earnings will be very low.
Look for another line of business. In fact, in future the photographers who receive the greatest satisfaction from licensing images will be individuals who do photography as a sideline and have another means of support.

Copyright © 2012 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.  


  • michael swiet Posted Apr 20, 2012

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