Recently, I received a request from Clive Thompson, columnist with
Wired Magazine, asking about the number of stock photography images licensed annually. He was more interested in the increase/decrease of the number of images sold than in any impact it might have had on revenue. Here’s what I told him.
Getting a handle on the size of the stock photo industry in terms of images licensed is very difficult. Most of the information is privately held. Basically, there are two companies – Shutterstock and Getty Images – that make enough information publicly available to allow me to make some reasonable estimates. The rest are my guesses based on 50 years of producing and licensing stock photos and 24 years writing my online newsletter Selling-Stock.com.
To start with there are four major segments of the business to consider – Single Image Licensing, Subscription, Editorial and Video.
Video
I think the video business generates about $400 million in sales annually. About three-quarters of that is re-use of clips from major TV and motion picture productions. A lot is historical. The rest is current material used mostly in advertising and business presentations. I have no idea how many actual clips this revenue represents.
Since 2000 everyone has been saying that the video business is about to explode given the increasing demand for video on the Internet. It hasn’t happened. As best I can tell 2013 revenue was less than double 2000 revenue. Prices per clip have declined somewhat, but not to any great extent. So how do we explain the massive increase in video found online and in all types of presentations?
My theory is that improvements in equipment have made it so easy for everyone to custom produce exactly what they need that it is no longer necessary for them buy a lot clips. Now they can either shoot it themselves, or find someone who will shot it for them for virtually nothing.
Editorial
I have no idea how many news related “stock images” are being used in newspapers and magazines. This category includes most of the pictures of breaking news events, sporting events as well as sports and entertainment personalities.
A lot of what is used editorially is custom shot by staff photographers or free-lancers working on assignment. Most of the wire service photos are supplied through subscriptions that offer a daily feed. I don’t think even the wire services know how many of their images are actually used.
We do know that the space for pictures in print media has been steadily declining over the last decade, particularly in the Western world. Publications have been getting smaller and going out of business. Photographers have been getting laid off. There has been growth in specialist publications, but they usually need images that are custom shot.
There has certainly been dramatic growth in demand from news related web sites for images. Many of these images are acquired through subscriptions. So the sites use more of what they get than in the past, but the subscriptions cost them the same or less. Increased use doesn’t result in increased revenue, just more work and cost for the suppliers because subscribers expect to see more and better images in their daily feed.
Creative Stock Images
Now we get to the category of images that Getty calls “Creative Stock Images.” It should also be noted that a lot of these Creative Stock Images are used for editorial purposes, they are just licensed one image at a time rather than through an editorial subscriptions.
This category makes up the bulk of images licensed as well as revenue. In this segment of the business there are four different licensing types to consider – rights managed (RM), royalty free (RF), microstock (Micro) and subscription (Sub). The RM, RF, and Micro are all licensed one image at a time.
With Subs customers can download a lot of images for consideration that they may never use because there are no additional costs. No one knows how many of the Sub images downloaded actually get used.
Based on the revenue generated, and the number of images downloaded, I think the average price per-download is about $1.25 and the royalty paid the image creator ranges from $0.25 to $0.40. You’ve probably looked at Shutterstock and they say their average revenue per-download is $2.43, but that includes images that were licensed at much higher single image prices. These images represent less than 10% of their total downloads but they skew the averages.
So now we get to the number of RM and RF images licensed. In 2013 Getty licensed rights to between 250,000 and 500,000 RM images depending on whose figures you accept (see
here). They also licensed rights to between 750,000 and 1,125,000 RF images.
For growth comparisons check out these numbers. Back in 2006 Getty licensed rights to 607,945 RM images and 1,053,751 RF images. The average price per image licensed was $536 for RM and $292 for RF. In 2006 the gross revenue generated from RM and RF sales combined was $634 million. It was under $300 million in 2013. In 2006 Getty had a total of 1,761,214 images in its Creative Stock Images collection and recently that collection had grown to 9,464,907 images.
Based on Getty’s dominance in the industry, and the total estimated revenue of all sellers worldwide, I believe that fewer than 2 million RM and 4.5 million RF images were licensed for use in 2013
Given that Shutterstock licensed over 90 million Sub downloads in 2013, and taking the other players with subscription offerings into account (Thinkstock, Photos.com, Fotolia, Dreamstime, etc), I believe the total Sub downloads were between 120 and 130 million.
The general Micro category includes all the other sellers that license single images at list prices below the traditional RF prices. Most of these companies entered the business in the last decade. They have streamlined the licensing process for the user and focused on making it easy for part-timers to license rights to their images.
Also included in what I consider Micro, is Midstock, a higher priced microstock. In 2006 and 2007 most Micro licenses ranged from $1.00 to less than $10.00. Since then there have been dramatic increases in pricing. While there are still $1.00 or $2.00 images available on some sites the prices for certain images can go as high $250 for uses of large files in projects with less than 500,000 circulation (even more if you want a larger print run). As prices have gone up more and more customers are finding the images they need through subscriptions.
The largest player in Micro is iStockphoto (owned by Getty Images). In 2010, I believe they licensed rights to around 25 million images. In 2013, based on sales of almost
200 of their top producers I believe the number of licenses was down to somewhere between 10 and 13 million. Despite price increases, total revenue generated has fallen. Shutterstock has been the big beneficiary.
Industry wide, I believe total Micro single image downloads in 2013 was between 40 and 50 million.
Thus, the totals for Creative Stock Images licensed in 2013 was in the range of
186,500,000
| Rights Managed |
2,000,000 |
| Royalty Free |
4,500,000 |
| Microstock |
50,000,000 |
| Subscription |
130,000,000 |
You’re not interested in revenue generated, but I believe the total gross revenue for the
industry in 2013 was about $2 billion. I believe there has been very little revenue growth, industry wide, in the last decade. While there has certainly been growth in the number of images licensed, and in some cases price increases, overall there has been a dramatic decline in the average price per image licensed. This price decline has more than offset any growth in images used.
As processing speeds, memory capacity and the pixels in digital cameras increase, more and more good pictures are being created (along with a lot of trash). Only a small fraction of the images on the Internet are available for licensing, but the supply of thes licensable images has still far out paced demand. Prices have fallen as more ways are discovered to make plenty of images available for virtually nothing.
While prices have fallen the cost of production, and certainly the cost of making images findable on the Internet, has not changed all that much. If anything, these costs may have increased. More and more amateurs are able to make a little money after expending a lot of time and effort in producing, keywording and uploading their images. That’s fine for them because taking pictures is a hobby and an income supplement. Profit for time and money invested is not an issue.
Most professionals are looking for another way to earn a living. For them profit is important. It is becoming increasingly difficult to cover costs and have anything left over for their efforts.
Look for Clive’s column in Wired Magazine.