RF or RM: Photographer's Dilemma

Posted on 8/26/2008 by Jim Pickerell | Printable Version | Comments (1)

Companies that previously specialized in royalty-free licensing are now asking photographers to offer their new production as rights-managed content. Photographers are questioning whether or not this is a wise idea. Photographers worry that customers will not go to RF companies to buy RM--and if they do, they may not be willing to pay RM prices.

There are several things to consider: pricing differences, revenue averages, sales frequency and, most importantly, the production company’s distribution network.

Very few distributors offer only RF; most have large collections of both RF and RM content. Customers search a site for the right image, regardless of how it’s licensed. Once they find it, they determine if they can afford it.

There are so many different price points for RF that it is impossible to estimate the licensing cost before choosing a specific image. On the other hand, customers know that RM prices are negotiable. In cases of limited budgets, there is a better chance of negotiating a reasonable RM fee versus RF (though RF prices can also be negotiated in select cases—but that is another story).

The best example of why budget customers might prefer RM to RF is Alamy’s second-quarter figures. The average licensing cost of an RM image was $147, while RF averaged $224 per image.

Some photographers see this as losing twice, arguing that RM sells at lower prices and RF brings in higher volumes. The latter may be historically accurate, but Alamy sold four times as many RM images as RF in the second quarter. If you hit the averages, you would have generated $588 in RM revenues for every $224 of RF revenues.

It also important to remember that RF has priced itself out of the market for many uses, and that there is now a huge oversupply of RF content. Distributors increasingly ask for RM to be able to price images based on what the customer can afford. More and more customers want that too.

This does not necessarily mean giving up high-dollar sales. Alamy’s average price for commercial use is now at $383—not as high as Getty’s, which is probably somewhere in the $500 range, but Alamy does make some high-ticket sales.

So do others. Three years ago, I placed RM images from the Stock Connection, which I own in part, on Fotosearch. At the time, Fotosearch represented some 100 stock photo, illustration and video publishers and had a very strong reputation for RF sales. I believe we were the third company to contribute RM images, resulting in a very small percentage of RM among almost exclusively RF content. Nevertheless, we started making sales immediately, and some for very high dollars. It wasn’t long before Fotosearch returns started matching sales from some of our other distributors, with similar average return per image.

Still, the most important point to consider is how to get the broadest possible market penetration. The objective is to get your images--whether RF or RM--into as many of the larger distribution channels as possible. RF’s advantage for the producer is that the same images can be sold through an unlimited number of channels. RM production companies often want exclusive rights, which could limit sales in cases of a small distribution network. Whether or not your RM images will be placed with all the distributors that represent the same company’s RF content is an important question to ask before making a decision.

One advantage Stock Connection has had is the non-exclusive nature of all distributor relationships. We place the same RM images with many different distributors, just as an RF supplier. On those rare occasions when a customer wants exclusive rights, we call the photographer and clear a specific image; all other images remain available through all our distributors on a non-exclusive basis. In 15 years, we have made many exclusive sales, and I don’t think we ever lost a sale because we couldn’t clear rights in a timely manner.

Based on this experience, my guess is that you could earn as much or more by offering RM content versus RF—provided you can get the same number of RM images from a shoot and place them with all the distributors that distribute the production company’s RF content.

Copyright © 2008 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.  


  • Betsy Reid Posted Aug 27, 2008
    I hope that those RF companies now creating RM collections are offering those photographers RM level royalties. With an industry shift back to RM, it will be good news to see revenue sharing shift back as well to a more equitable split between creators and distributors.

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