Multi-Tier Pricing Model

Posted on 3/22/2017 by Jim Pickerell | Printable Version | Comments (0)

Given the declines in stock photo prices, it may be time for the industry to look for a new image pricing strategy. Yesterday I made an argument for why the industry needs to price based on performance, or demand for certain images. There also needs to be a price floor for certain images that are in greater demand. Price should have little, if anything, to do with whether the image is exclusive or non-exclusive.

Here’s how it could work.  

1 – Separate out all the images that at least one customer has licensed in the last two years. If the customer paid a regular single image fee to download the image, then that image is automatically included in the top tier. If the image was only downloaded by subscription customers then it must have been downloaded at least 10 times to be included in the top tier.

    Note: We know that many of the images downloaded via subscription are only used for reference and planning purposes, not in a final product. Less care is often taken in choosing images when a subscription is used because it costs nothing extra to download additional images. From a workflow point of view, it may be easier to bring a number of possible choices to the desktop and make the final choice there. Therefore, there needs to be some value difference when a customer pays a fixed additional fee for each download compared to subscription downloads. Ten to one may not be the right ratio. Maybe 5 to 1 is better. The right ratio can be determined through experimentation. It may also have something to do with how large the agency wants the prime collection to be.
Next make the images in this curated collection only available at a somewhat higher price than the rest of the general collection. Getty already does this to some extent with the iStock Signature and Essentials collections. However, the problem with their strategy is that they base the difference between their two tiers on whether images are non-exclusive or exclusive, not on whether an actual customer has liked the image well enough to buy it. As a result, there are lots of images in the higher priced Signature collection that nobody would want to use, regardless of price.

Experience has shown that a huge number of customers like, and actually find new uses for, the same images others have used.

With the iStock (Getty) system customers don’t really get the benefit of a curated collection. One of the problems in having agency editors curate collections is that it is costly in staff time. This way customers do the actual curation for the agency.

2 – All images that have not been used in the past two years, including new images supplied to the agency, become the base collection. The base collection is priced at the current collection price. Images in the higher tier collection are priced at a somewhat higher price. If a customer wants to see new images, or ones that no one has ever used (or just ones that are cheaper), the customer can go directly to the base collection, rather than the top tier collection. As soon as an image in the base collection is licensed one time (or downloaded by 10 subscription users) it is automatically moved to the Top Tier, higher priced collection.

3 – A third option for really large collections might be to take images that no one has even viewed for a year or more and move them into an even lower priced collection. Make the images in this collection available for those who say they can only afford to pay $1.00 or $2.00 for an image. This gives these customers something, but they should not get access to the Top Tier images, or even the Base images, unless they are willing to pay the higher price for those images. Some of these older, never used images may still be perfectly satisfactory for certain budget conscious users.

Customers should be able to easily toggle between any of these three collections. Search-return-order in each of these collections could be controlled separately depending on demand and what the agency wants to feature.

Other Considerations

Assume that an image in the Top Tier collection sits there for a period of time (say one year) and is never licensed again. Maybe it should be moved back to the base collection in order to reach a different group of user for which price is an issue. It should be easy to set up a program that automatically moves images out of the Top Tier pricing after they have gone unlicensed there for a certain period of time.

The thing that is killing the industry is giving everyone access to all the images the agency has available for the lowest price anyone is willing to pay.

While starting with just RF images, the system could possibly eliminate the need for RM licensing. Today’s problem with RM is that a huge percentage of RM images are licensed at extremely low microstock prices. While in very rare cases much higher prices may be negotiated for an RM image, the vast majority are being licensed at extremely low prices.

In addition, today’s customers are sometimes willing to pay multi-thousands of dollars for an RF image, if that image is removed from the market for a period of time. The fact that the image may have been licensed by some other customer previously, and that customer still has the right to continue to use it in certain ways is becoming less of an issue.

Copyright © 2017 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, 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:  


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