Reducing Middleman Cuts

Posted on 3/28/2018 by Jim Pickerell | Printable Version | Comments (0)

Given stock imagery oversupply, and ever falling prices, in order to justify continued production of the type of images customers want to buy, professional image creators need to find a way to reduce, or eliminate, some of the middleman cuts.

If we go back to the 1990s when agencies had strong positions with customers in their local markets it made a lot of sense for the agencies in certain markets to share their collections with agencies in other parts of the world. The prime agency had to give up an additional percentage of the fee the customer paid, but they were able to make a lot of additional sales because their work was now being presented to customers they would never have been able to reach on their own.

In some cases, these specialized agencies even distribute duplicate transparencies through larger agencies in their own country with more general collections. These larger agencies tended to reach a broader cross section of customers.

Many professional photographers placed their images with different agencies in each country rather than having a single agency handle the distribution for them. In this way they did not lose an extra percentage whenever a sale was made outside their home country.

This all changed with the Internet. Now it is easier for customers all over the world to search image collections online, find something they can use, pay a specified license fee (or negotiate via e-mail) and receive a digital file sufficient for their needs. All this still assumes they know where to look.

Marketing to make a broad base of customers aware that a site exists can be very expensive. Shutterstock spends almost 25% of its gross annual revenue (over $100 million annually) on marketing.

In many cases agencies will collect images from a photographer for RF licensing and agree to pay the photographer 15% to 20% of the revenue “it receives.”  Then they will pass digital copies of the images on to a large distributor who will handle much of the licensing of the images to customers. The agreement between the two agencies may be that the selling agency will keep 80% of what it receives from its customers before remitting the remainder to the supplying agency. In such a case the creator will receive 3% or 4% of what the customer actually pays to use the image. When the prices customer pay drop to a very low level, it becomes very hard for creators to justify continued creation.

Occasionally, these large distributing agencies bring in another partner that makes the actual sales to certain customers. These partners take a percentage of what the customer actually pays before remitting the remainder to the distributor. In such cases the image creator may receive an even smaller percentage of the gross fee paid by the customer.

In some cases, small groups of photographers have been able to join together in production companies, make little or no effort to license their work directly to customers, and rely entirely on a network of agencies to market their work. This removes one level of cuts between the image creator and the prime distributor of the imagery, but the percentage taken by the distributor is still significantly large.

Is There A Solution?

Probably the closest solution in today’s market is They accept images from creators on a non-exclusive basis and market them all over the world although the vast majority of their sales are in the U.S. and the UK. However, a significant portion of the images they represent are also supplied by agencies. When one of the agency supplied images is licensed there is a double cut before the agency’s image creator receives his/her share.

Despite its collection of 125 million images, Alamy still doesn’t have the name recognition among customers of a Getty Images, Shutterstock, iStock or possibly AdobeStock. Alamy certainly can’t afford to spend the kind of money on marketing that Shutterstock does in order to build that name recognition.  

In fact, even Shutterstock, with all of its marketing clout is not the first choice of many customers.

One of the things small, specialized niche agencies used to offer was curation. They didn’t accept everything submitted to them, but tried to base their selections on the kind and quality of imagery they believed their customers wanted to purchase. This made image search easier for the customer because they didn’t have to wade through tons of irrelevant imagery. Today, images search has become so difficult that many customers are turning back to agencies with smaller, specialized collections.

In theory AI (artificial intelligence) algorithms are supposed to eliminate the need for human curation and bring the best images to the top of the search return order, but so far AI doesn’t seem to be doing the job.

Unfortunately, many agencies have gotten away from editing, partially because it requires human editors that cost money. Now, the tendency of most agencies is to upload everything they can get their hands on and leave it up to customers to find something useful.

Changes That May Be Needed

  • A better system for supplying creators with more specific information about what customers are actually purchasing so creators can focus new production toward what seems to be needed.

  • A way to allow creators with proven track records to upload select groups of images, or images that have actually been licensed, to one central, universal site.

  • The single, universal site that offers a broad cross section of all types of subject matter that is in demand by commercial users.

  • An editing process that limits the number of images selected in any category so customers are not overwhelmed with too much choice.

  • The possibility of including some of the same images in other collections on a non-exclusive basis so individual creators are not limited to this one site for their sole source of income.

  • Ideally, the site would be operated as a non-profit and transfer the bulk of the revenue generated to the image creators. Nevertheless, a reasonable share of the gross fees paid by customers would still need to go to the site operator in order to cover site operations including marketing to make customers aware of the site.

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, 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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