RM Licensing No Longer Makes Sense

Posted on 7/30/2019 by Jim Pickerell | Printable Version | Comments (3)

Photographers trying to license their images as Rights Managed (RM) need to give some serious though about whether this strategy is still in their best interests. In theory, licensing based on usage should enable a photographer to occasionally get higher prices for certain uses, rather than giving away all future rights and allowing multiple re-uses for a low Royalty Free (RF) license. The following are some reasons why this “theory” no longer works.

1 – it must be recognized that today more than 99% of the images available for licensing are being offered with an RF license. The percentage of images currently being licensed based on how the image will be used (RM) is declining rapidly.

2 –On sites like Getty Images which offer both RM and RF images RF gets preference in the search-return-order. Thus, even when a photographer has a number of RM images in Getty’s collection most customers will never see most, or any, of them. In any search customers tend to look at 500, or fewer, thumbnails before they change search parameters. If your image doesn’t show up in the top 500 there is very little chance it will every be seen. On most searches the vast majority of images returned will be hidden below the first 500.



3 – A decade or more ago it used to be possible to argue that RM images were of higher quality than those offered as RF. That is no longer the case. Certainly, a lot of the images in RF collections are of very low quality – nothing more than snapshots. But. a significant percentage of the RF images in collections today are certainly of equal – and in some cases better – quality than competitive RM images. In actual numbers, there are probably more high quality RF images offered for licensing in any particular subject area, than there are high quality RM images. There is a huge oversupply of virtually every subject category.

4 – Customers don’t want to worry about tracking uses of the images they license. Once an image file is on their hard drive there is always the danger that someone else in their company might see it and use it on another project. That would be a violation of an RM license. Enough companies have been burned through legal action for such unauthorized use – or have heard about it happening to someone else – that no one wants to take the risk that they might accidentally infringe on a license. Thus, today virtually all customers only look at, and consider, images that are offered with an RF unlimited use license.



5 – A very high percentage of image uses are online only, not in print. When an image is used in print it is also likely that it will also appear online.

With RM the price for a usage was usually based on (a) the size of the usage, (b) the length of time the image was used and (c) the circulation of the publication. In the online environment (a) the size and placement of the image is irrelevant, (b) once placed online it generally stays there forever and is not thrown in the trash like a print publication and (c) circulation, or the number of viewers, is virtually impossible to estimate in advance or track. Consequently, the principles normally used for pricing RM uses are almost impossible to apply in the online environment.

6 – A decade or more ago textbooks and education were among the biggest users of images. At that time, it was easy to determine circulation based on print runs. Publishers paid a fee based on the first print run. If there was demand for the book, and the publisher had to go back on press for an additional print run, they paid and additional fee.



When print-on-demand technology came on the scene publishers were able to print more copies as needed. At that point they began to negotiate deals for very high circulations over an ever longer number of years. Everyone knew that most books published would never go beyond the number of copies allowed in the first printing, but the publishers insisted on high circulation figures for all projects so there was very little chance that any project would go over the allowed number of copies. The price offered for such uses was usually very low – about the same as they would have formerly offered for a first printing.

By using RF images publishers no longer have to worry about size of use, length of time or circulation and they can often get the images they need for less than RM prices.

7 – In earlier times when print publications were a dominant means of advertising an image might get used extensively in a marketing program over many months, or even years. When a brand chose to use an image in this way they would want exclusive rights to the image, and often be willing to pay an extremely high fee to make the image their own.

Such usages have declined dramatically as more and more options have arisen for marketing a particular product or service and more marketing is delivered online. Now it is much easier to customize marketing approaches to various segments of the population.

At the same time there has been a huge growth in the number of images available from which to choose, making it much less likely that any individual photographer will see such sales. In addition, many people who used to insist on exclusive RM images for such purposes are now willing to accept RF images as long as the image is taken off the market for the period of time that the brand is running its campaign.

Stocksy offers “Market Freeze” (MF) prices in the thousands of dollars for the RF images in its collection. Indications are that they make a number of sales at these prices. In a Market Freeze the image is removed from the collection for the period of the license. The customer realizes that others may have purchased the same image earlier and have the continued right to use it for their own purposes during the MF period. Evidently that doesn’t bother many customers.

Shutterstock’s Offset and Adobe Stock’s Premium collections offer similar pricing options for RF images.

8 – Over a decade ago Getty started insisting that they be allowed to offer RM images at the same prices as RF to certain volume customers who would use the images mostly on the Internet. The program was called Premium Access. (http://www.selling-stock.com/Article/gettys-subscription-plan-angers-photographers )

Over the years more and more customers have been signed up to Premium Access deals. Based on my most recent analysis of some Getty sales figures about 73% of all licenses are for gross fees less than $20 and one-third for prices less than $5.00. Most of these low priced sales are Premium Access deals. The average gross price for all Getty sales (including rare ones for over $1,000) is about $29.

In March a recent contributor to Getty contacted me and asked if I could explain why the royalties for his first three sales were under $1.00 each. These were Premium Access sales. Based on the pricing schedule on the Getty website, the photographer had expected that gross license fees for use of his images would be about $500 each.

With Premium Access Getty negotiates a flat monthly fee with each customer. In exchange the customer may download as many images as they like during the month. Getty tracks the number of image downloads and divides that number into the license fee to determine the average price per image. The royalty share for each image is based on the average price per image.

Anyone, who regularly uses a large number of images will go after one of these deals. The only people who still play anything approaching reasonable prices are the occasional users who purchase so few images annually that Getty can’t figure out how to negotiate a monthly fee with them.

The rest of RM sellers in industry can’t, or don’t want to, compete with Getty for these volume users. Thus, the only customers likely to go to the other RM sellers are occasional with whom the seller happens to have a long term relationship. Everyone else goes to the big discount operations.

9 – Another thing to keep in mind is that are currently at least 3 premium RF collections – Stocksy, Offset and Adobe Stock Premium. The average price for images licensed from all these RF collections is likely to be higher than Getty’s RM prices

Photographers should recognize that some RM sales will be less than RF prices. If their images are made available as RF it is likely that they will make a much higher volume of sales than if the images are offered as RM. And finally, in either case the gross revenue may not be enough to justify continue production of new images.

Also check out: Right Managed Future At Getty


Copyright © 2019 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.  

Comments

  • Anne Rippy Posted Aug 3, 2019
    I have 2 reasons for submitting images as RM over RF. It still burns me that Getty pays the photographer a lower percentage for RF sales than RM...no wonder they push us to submit RF! In addition, if an image is RM it seems more likely to be able track infringements than if it is RF...or is Getty still pursuing infringements?

  • Tom Zimberoff Posted Aug 3, 2019
    Updated response to this post on MEDIUM at

    https://medium.com/storiusmag/fixing-photography-593e97aa2417?source=friends_link&sk=f79277b19499d58f50cc54ae4cb7d6e5


  • Peter George Unger Posted Aug 6, 2019
    I have 9200 images with Getty and every single one is RM. I am making on average $15000 per year from them. Can you honestly tell me I can make more money then that on pathetic RF prices? for which they pay .25 cents per download. Which library would pay more then 15K on RF prices?

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