Market Size and Where Market Headed

Posted on 11/1/2018 by Jim Pickerell | Printable Version | Comments (0)

I’m regularly asked for my thoughts on the size of the worldwide market for stock photography in terms of gross revenue and the potential for market growth.

Typically, the stock photo market is divided into the following 4 categories:

Microstock $1,150,000,000
Creative Stills - Commercial Uses $450,000,000
Editorial - news, sports & entertainment $450,000,000
Footage or Video $700,000,000
   
  $2,750,000,000



Microstock images are offered at very low prices. The average license fee for a Shutterstock image in the last quarter was $3.41. Many of the images offered by other microstock sellers are available for even lower prices. Over 98% of the still images and illustrations licensed are supplied by microstock companies.

Creative still images are used mostly for commercial purposes and include all types of subject matter except for news, sports and entertainment which fall under the Editorial category. Creative images normally require releases from the subjects when used for commercial purposes. The fee for usage of a Creative image is sometimes much higher that Microstock prices, based mostly on how the images is to be used. However, an increasing percentage of Creative images are licensed at prices very similar to those charged by Microstock companies. In a recent analysis of the sales of one of Getty’s major contributors I determined that 63% of the sales were for prices less than $10, many for less than $1.00.

Editorial – news, sports and entertainment – still images do not require releases when used for editorial purposes. Permission may be required when they are used for advertising purposes. The production and licensing of editorial images is often handled by separate companies, or divisions of large companies, that specialize in the dealing with editorial image creators as opposed to creators who specialize in producing images for more commercial uses. The editorial business is very dependent on the general health of the magazine and newspaper industries. As such publications have moved to deliver more of their product online, rather than in print, the total revenue generated from the use of stock photos has declined significantly, although the publications may, in fact, be using more images.



The demand for footage and video clips has been increasing in the last few years due to the growing use of footage on the Internet. However, the demand for clips is not growing anywhere near as fast as the overall use of video on the net because a very high percentage of video being used is produced start to finish by the creator and does not require stock clips. In 2015 the ACSIL international trade association surveyed members and determined that the business generated $550 million in annual revenue. ACSIL is in the process of updating their survey and expected to release a report within a couple of months. I expect the results to show gross annual revenue in the range of $700 million.

It should be noted that a high percentage of usage of video clips are of outtakes of paid productions by TV news organizations and motion pictures producers, and not shot entirely on speculation as is the case with most microstock and creative still imagery. Thus, with video, unlike stills, in many cases the cost of production is already covered. The revenue from stock clips is simply a supplement to an already profitable venture. With most still productions (and some with stock video) there is no guarantee that production costs will be covered, let alone a profit for the producer.



The $2.75 billion gross worldwide revenue does not include any material that is licensed directly by the creator to an end using customer. It only includes the licensing of still photos, illustrations and video by middle-man distributors. While we know there are some direct sales, there is no way to determine how many transactions there might be. Based on my experience in the industry, I believe total revenue generated by such transactions is a very small percentage of the total generated by distributors, but the fee per image used is often much higher.

It is also important to recognize that a significant, and increasing, percent of Microstock and Creative revenue comes from illustration and graphic renditions rather than photos. I believe that about 1/3 of Shutterstock’s revenue comes from licensing illustration. I suspect the same is true for most of the other Microstock distributors. One thing to watch for is whether image buyers start to move away from using still photos and turn to using more illustration.

Leading Distributors


    Breakdown  
Getty Images $830,000,000    
    Microstock $220,000,000
    Creative RM and RF $280,000,000
    Editorial $250,000,000
    Footage $80,000,000
Shutterstock $625,000,000    
    Microstock $560,000,000
    Editorial $15,000,000
    Footage $50,000,000
AdobeStock $175,000,000    
Alamy $45,000,000    
    Creative RM and RF $40,000,000
    Editorial $5,000,000
Pond 5 (footage) $40,000,000    
Dreamstime $40,000,000    
123RF $35,000,000    
Deposit Photos $35,000,000    
       
  $1,825,000,000    

The only two numbers that have been publicly reported and the gross numbers of Getty Images and Shutterstock. A couple years ago Getty also provided a breakdown of its gross number and I believe that breakdown has remained essentially the same. The other numbers are my estimates based on bits and pieces of data collected from contributors and other sources over time.

It should be noted that the microstock segment of Getty Images comes from two separately searchable collections – iStock and Thinkstock. Getty plans to merge these two collection in the near future under the iStock brand, but it intends to keep search of that collection separate from the main Getty Images collection.

Where Revenue Generated


The following is a breakdown of the percentage of total revenue generated in various parts of the world.

United States 33%
Canada 4%
South & Central America 6%
Europe 42%
Middle East & Africa 2%
Asia 10%
Australia & New Zealand 3%

Shutterstock says that 33% of their sales are in the U.S, 33% in Europe and 34% in Asia/Pacific Latin America, Canada and the Middle East (basically the rest of the world). Getty Images has always reported higher sales in Europe than in the U.S. The above percentages are basically the same percentages Getty was providing more than a decade ago when they were clearly the world leader in the industry. The percentage of revenue generated from various parts of the world has not changed significantly.

Shutterstock likes to point to the idea that their sales are growing in Asia and many of the smaller nations in the world. As the company has matured, they have put more effort into marketing to some of these regions, and taken market share from their competitors. They may have seen growth, but in terms of revenue total industry demand in each region has changed very little.

The number of images licensed in Asia may be growing significantly, but on average they are selling a much lower prices. There may also be growth in the number of people who want FREE images, but that doesn’t help agencies and photographers make money.

Europe has always been a slightly larger market than the U.S. due to a stronger demand for editorial images and because there are many more smaller publication given the variety of countries and language differences.

Potential For Growth


I see very little chance that there will be much, if any, growth in total revenue generated by the stock photo industry in the near future. More and more customers will search for Free images, or simply grab what they want without determining whether the image is free to use or not.

All indications are that prices will continue to decline in the hopes of capturing more market share, although it is hard to see how much lower prices can go given how much they have already fallen.

In addition, the move away from carefully curated collections of images and overloading the collections with anything and everything the agencies can find makes it harder, not easier, for customers to find something they can use. Consequently, I expect more and more customers to turn away from the professional stock photo market and look for other ways to get the images they need.

Finally, the existing distributor system has outlived its usefulness and needs some radical adjustments. Before the Internet the existing distributor system was needed in order to make a particular creator’s images available to a wide range of potential customers and in markets where different languages were spoken.

Now, in the same way that Amazon has eliminated the need for a lot of local shopping centers, the Internet has made it possible for a wide range of customers from all over the world to find the images they need without having to go through local distributors.

I see no evidence that any of the necessary changes are likely to be made. In the next story I will go into in some detail regarding the various areas where change is needed.


Copyright © 2018 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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