Stock Photography: A 50 Year Evolution

Posted on 2/14/2011 by Jim Pickerell | Printable Version | Comments (2)

The stock photo industry has evolved in many interesting ways in the last 50 years. Stock photographs are existing images available for licensing or sale. They can be of any subject, but there is much greater demand for some subjects than others. In general pictures of people in family life or business situations and pictures of major historical events are in greatest demand.

Fifty years ago most stock photographs had an editorial feel and were used primarily in newspapers, magazines and books. Some companies like H. Armstrong Roberts, Lambert, Galloway and Devany produced concept images which were sometimes licensed for advertising use, particularly for small, local projects when the customer couldn’t afford to hire a photographer for an assignment. One of the major limiting factors in the use of stock by advertising customers was that they needed model releases, and very few photographers bothered to get releases at that time.

The vast majority of stock images were outtakes from assignment shoots. Photographers submitted them to stock agencies with the hope that they might earn a little extra money over and above what they were paid for the assignment. No one was ever sure what might be needed in the future so there was a tendency to store everything rather than make critical decisions as to what to keep and what to throw away. Since an assignment fee and expenses had been paid when these images were produced, photographers had very little cost in making their images available for stock marketing. Any extra revenue generated by licensing rights to reuse an image was pure profit for the photographer.

During this period nearly everyone who earned a living taking pictures was focused on getting assignments, not shooting stock. In some cases photographers would take pictures between assignments of subjects they hoped might be of interest to someone, but the goal was always to get someone to pay a fee and expenses for an assignment. Most photographers were represented exclusively by a single agency. The majority of customers were publications headquartered in a few major cities.

When photographs were needed for advertising and commercial purposes they were almost always produced by professional photographers working on assignment. Most advertising and commercial customers tended to view stock as low quality outtakes and something to be used only as a last resort. For the most part they would only consider stock when their budget was insufficient to hire a photographer to shoot the project.

How Stock Was Delivered

Customer who wanted to use stock images would telephone requests for certain subject matter to a number of stock agencies. Agency editors would then search their files for images that might be appropriate and mail them to the customer for consideration. Color images were usually filed in plastic sheets that held 20 slides. The major demand before the 1960s was for black and white prints. Everything was filed in subject categories. Sometimes agencies would just store B&W contact sheets and the negatives and not make prints for delivery until a specific image was selected from the contact sheet. In many cases after going through this research process the customer would find nothing satisfactory for her use. All images sent out for consideration had to be returned to the agency. Only a small percentage of the images in most files ended up ever being licensed. In rare cases certain images were licensed multiple times.

If the customer decided to use an image a fee was negotiated and the customer was billed. Payment to the agency would come 30 or more days later. Once the agency had deposited the money the photographer was paid his percentage on a monthly or quarterly basis.  It could take months from the time of sale until the photographer was paid, but this wasn’t a major problem for most photographers because they weren’t depending on this money.

Customers used stock primarily because it was inexpensive relative to the cost of hiring a photographer to shoot an assignment. Customer also benefited from knowing exactly what they were buying before they had to make a financial commitment. In the case of assignments there was always the risk that things would not go as planned. Finding the right stock image could be time consuming and costly because often it was necessary to gather images for consideration from a number of agencies. After all that research it still might be necessary to hire a photographer to take the necessary pictures.

For some customers owning the image was another important reason for making an assignment. According to the U.S. copyright law prior to 1976 all images created on assignments were the property of the assigning party, not the photographer. Thus, customers didn’t have to worry about someone else using the same image and they didn’t have to be concerned about losing or destroying images because they were their property.

Shooting For Commercial and Advertising Use

At least four agencies -- H. Armstrong Roberts, Lambert, Galloway and Devany -- had been producing black-and-white catalogs from before World War II and supported these catalogs with massive numbers of prints distributed through several offices around the country. The H. Armstrong Roberts agency even has a few offices in Europe. But there were no color catalogs and by the early 1970s demand was increasing for color images.

In 1972 Tom Grill and two other partners produced a color image catalog for the agency Four-by-Five (later renamed Superstock). The images illustrated concepts that tended to be used regularly by commercial and advertising customers. The catalog was distributed widely. Customer could see exactly how the images would reproduce in print and could order quality film dupes of specific images they knew they wanted to use. Dupes were made on Kodak’s new 6121 4x5” Ektachrome duping film which reduced the contrast that had been inherent in copying transparencies up to that time. Previously, a complicated (and expensive) masking process was necessary to make an acceptable color dupe. Such dupes eliminated the customer’s need for original transparences in order to achieve quality reproduction. In addition, with the advent of “reproduction quality dupes” it was possible to send the same image to multiple clients simultaneously.

In 1973 FedEx was founded. Packages could be shipped overnight anywhere in the US. Agencies were able to advertise that if an Art Director called and ordered a photo by 5:00PM local time, that photo would be delivered by 10:00 AM the next morning. For an industry used to wanting everything done yesterday, that was a huge technological advantage. In 1973 Grill and Henry Scanlon, who worked in sales at Four-by-Five, founded Photofile, Ltd. (later renamed Comstock).

In 1974 Larry Fried, a highly respected New York photographer, and Stanley Kanney founded The Image Bank (TIB). This company also focused on supplying images to the advertising community. Eventually, TIB licensed images through more than 70 distributors around the world. In 1991 Eastman Kodak Company purchased TIB for about $45 million and in 1999 TIB was sold to Getty Images for $183 million.

In the mid-1970’s Tom Grill began giving lectures at Photo Expo in NY and California that advocated the idea of conceptual stock shooting. While H. Armstrong Roberts and others had been producing concept pictures for many years most advertising photographers were unaware of, or not focused on, this aspect of the market. Up to that time, the majority of agencies were largely editorially (read “subject”) oriented. When these agencies distributed image need lists they were subject, not concept oriented -- “lion” instead of “powerful and noble”, as an example.

This was also about the time of the 1973-75 recession and photographers were looking for new ways, other than assignments, to generate photography revenue. As a result many photographers trained in advertising instead of journalism began to produce conceptual imagery in quantity for the stock photo market. When these photographers started doing production shoots (without the benefit of upfront funding from a publisher) they tried to plan and budget with the hopes that their share of license fees (usually 50%) would cover their costs in six months to a year after the images were produced. At that time well planned concept images tended to sell multiple times over a period of many years and as a result photographers ended up making a nice profit for their efforts.

1976 Copyright Law

In 1976 the U.S. copyright law was revised. Previously, when a photographer was hired to shoot an assignment the customer owned the imagery. Under the revised law the image creator owned the copyright from the moment of creation unless he formerly revoked his rights in writing. This enabled photographers to exercise more control over the use of their work and license rights for limited and narrowly defined uses.

Advertising and publishing budgets began to drive the increased use of stock. For some of the smaller, less important promotional projects it became too expensive to hire a photographer to do a shoot. Stock images were cheaper shooting an assignment. Thanks to Federal Express stock images were immediately available and customers knew exactly what they were buying. If an assignment was necessary the right photographer had to be found, sent out to do the job, and there was always the risk that the resulting images would not be all that was hoped for, particularly when dealing with people and uncontrolled events. Thus, if the customer could find the right stock photo it was greatly preferable to hiring a photographer to shoot an assignment. More and more customers started to look to stock first before considering making an assignment. The biggest problem customers faced was the relatively limited supply of quality stock photos. Assignment photographers began to claim that stock was killing their business and insisted that “no reputable photographer should ever shoot on speculation.”

From the perspective of most buyers as long as the image worked well for their project most really didn’t care if someone else used the same image, particularly if that someone wasn’t a direct competitor. As it turned out direct competitors were rarely a problem. Later the agencies worked out systems where they tracked all uses of a given image and for a slightly higher usage fee guaranteed the customer that the image would not be used by a competitor.
Most agencies wanted exclusive arrangements with their photographers so they knew no one else was marketing similar images and they could easily license exclusive rights. Exclusive photographers tended to get more of their images into the print catalogs. Some photographers felt they had the best chance of maximizing sales by spreading their risks and placing their images with multiple agencies on a non-exclusive basis. However, as the sales of catalog images began to represent an ever increasing share of the market the non-exclusive strategy turned out to be a bad decision for most photographers.
Catalog Period

Given the initial success of catalogs, in the 1980s more and more agencies started producing catalogs using the best concept images from their collections. Most would produce a new catalog at least once a year. These catalogs were distributed to major art buyers around the country and eventually the world. For some years the best catalogs were distributed to about 40,000 buyers, Eventually The Image Bank’s catalog was distributed to around 300,000 buyers worldwide. As marketing through catalogs grew in importance some books contained 500 to 1,000 images. Despite the fact that some of these agencies had millions of images in their files it was soon discovered that 80% to 90% of their revenue came from the small number of selected images they had placed in their catalogs. All of these images were used many times.

During this period there was a growth in distribution of images through sub-agencies. In the 1970s a photographer’s work tended to be represented by just one agency. The only way a customer learned of the existence of a particular image was to deal with that agency. Different customers tended to favor different agencies. But with the introduction of catalogs and reproduction quality dupes a small, select group of an agency’s most in demand images could be distributed around the world.

For over a decade, things steadily improved for the industry. More and more of the top photographers started producing stock, some giving up assignment work all together. The overall quality of the imagery improved. One advertising agency announced that they had over 350 print catalogs in their library. Prices for the use of stock images increased somewhat and the volume of use increased dramatically. Despite the increase in the number of images available throughout the 1980s the demand was greater than the supply. Commercial buyers had a lot more choice and came to rely on the print catalogs almost exclusively, rather than requesting image submissions from stock agencies. They also began to use stock images for more and more projects. Many photographers, who still relied on assignments for their income, hated stock and insisted that stock was driving them out of business.

CD-Rom Catalogs and Royalty Free

In 1990, Eastman Kodak developed the Photo CD system which made it possible to store digital images on a CD-Rom disk. This technological development led to the introduction of Royalty Free imagery.

While stock photographs were cheaper than hiring someone to take pictures on assignment they were still too expensive given the budgets for some of the smaller projects designers were asked to produce.  Image buyers were looking for cheaper images. A relative few needed to use the images they purchased for many projects over a period of months or years. Thus, they didn’t want to have to come back and re-negotiate a new fee for each new usage. As a result, the concept of “Royalty Free” was born. Customers paid one fee for unlimited rights to use an image rather than basing the fee on the use.  

A number of companies started scanning film images, loading them onto CD-Rom disks and selling the discs along with unlimited rights to use the images. In many cases the disk producers purchased all rights to a bundle of outtakes for fees of approximately $50 per image. Many photographers who sold images for this purpose had, up to that point, not been involved in the stock photo business. Many of the disks contained 100 different images and often a lot were similars. Buyers were often lucky to find four or five images they could really use on a disk of 100. The disks were usually marketed through print catalogs which showed the CD cover and four or five sample images. Some discs were sold for as little as $7.50 for a 50 image disk.

In early 1992 Photodisc started selling CD-Rom titles for a list price of $299.95. Each disk contained about 400 6.5MB image files and buyers were allowed to make unlimited use of any of them. Many of the images on the initial disks were supplied by the Seattle based stock agency Weststock. These images were produced by professional stock photographers and more tightly edited for quality than was the case with many of the competitive disk offerings. Among the images used were some from Weststock’s print catalog (which upset many of its photographers). Overall the quality of the images Photodisc offered were much better than those of their competitors, and the company quickly became the industry leader in sales of Royalty Free CD-Rom disks.

Rick Groman, one of the owners of Weststock, negotiated the deal for photographer compensation with Photodisc. Photodisc argued that they had huge expenses for high quality scanning of the film images, color correcting the digital files and creating the CDs. They also had huge expenses in printing and mailing the print catalogs necessary to show potential customers the product they had to offer. Finally, in order to sell this new product it had to be priced low enough to be attractive to customers with limited budgets. Therefore, Photodisc could not afford to pay a traditional stock usage rate of 50% of the gross fee collected. It was agreed that the maximum Photodisc would pay to use of the images was 20% of fees collected. Weststock took its normal agency share of this 20% so in effect the image creators shared 10% of gross revenue. Thus, when a disk was sold for $300 the photographers who owned the 400 images on it shared $30 making each image worth 7.5 cents. This is how a 20% royalty became an industry standard for the licensing of Royalty Free images.

The Royalty Free concept grew. Disks with large file sizes and fewer images were produced. An increasing number of photographers started producing images specifically for Photodisc and other Royalty Free production companies. In addition technology developed to the point that small digital files could be delivered to customers via the Internet rather than having to be burned to CD-Rom disk catalogs and shipped.

During the 1990’s most images were still licensed based on usage and the vast majority of stock image revenue was generated through rights managed licensing. However, at this point the supply of new images was growing much faster than demand. Since the vast majority of images purchased were those found in catalogs it became ever more important to get ones images into the print catalogs and not just into agency file cabinets. While many agencies would accept images on a non-exclusive basis for their general files they insisted on exclusive rights to all images placed in their catalogs. Agencies started charging photographers image placement fees to get their images into print catalogs. For the most part photographers were happy to pay these fees because images that made it into catalogs generated much more revenue than non-catalog images.

In September 1997 Getty Images purchased PhotoDisc for in excess of $150 million. ( Initially, images could be downloaded off the Getty site for between $19.00 for the smallest file size up to $180.00 for the largest file size.

The Microstock Decade

As the new century began several key developments played a role in how the industry developed and changed.
  • Internet bandwidth improved to the point that it was easy to search large online databases quickly using keywords. Thus, as more and more images were added to these databases print catalogs became a less important marketing tool.
  • It also became easy to deliver large digital files online.
  • The overall quality of many royalty free collections improved greatly. The subject matter choices offered customers became much more wide ranging. During the 1990s there had been a steady growth in the number of customers purchasing royalty free imagery so the companies producing this imagery experienced steady growth in revenue without raising their prices significantly. Photodisc was the industry leader and no other company would vary their prices greatly from what Photodisc charged.
However, by the early 2000s Getty Images began to see that the number of royalty-free units licensed was hardly growing no matter how heavily they marketed their product. Basically, all those who needed inexpensive still photography had discovered royalty-free and were using it to the maximum to fulfill their needs. Consequently, the only way to grow revenue was to raise prices. Even with a dramatic increase in price royalty-free was still much cheaper than rights-managed,  the only other available stock photo option.

In the second quarter of 2002 the average price for a royalty-free images licensed by Getty Images was $99.00. By the second quarter of 2004, only two years later, that average price had risen to $194.00. Meanwhile, the average price of a rights-managed image had remained relatively flat at about $550.00. By the first quarter of 2006 the average price of a royalty-free images had reached $254.00 about half of what it cost to purchase a rights-managed image. Interestingly, in that year Getty Images licensed rights to about twice as many royalty free images as rights managed ones.

During this period of rising royalty-free prices Getty Images made a number of moves to expand its royalty-free offering. The company purchased Digital Vision in April 2005 and Stockbyte in April 2006, but the total units licensed on a quarterly basis changed very little. In the third quarter of 2002 Getty Images licensed rights to about 257,058 royalty-free images. In the second quarter of 2007 that number, despite all the additional top quality content that had been added, was only 240,117 -- and dropping. All the adding of new content did was give customers more choice. It did not increase their usage.


While royalty-free prices were going up a new demand for imagery began to grow. These customers couldn’t afford the cheapest professionally produced imagery that was currently available. And, as we have noted, the price of that “cheap” royalty-free imagery was rising dramatically all the time.

Going back to 2001 when everyone started raising their prices for royalty-free images several other things were happening.
  • The dotcom bubble burst leading to a significant decline for about 18 months in the number of images purchased and the prices customers were willing to pay for imagery.
  • Camera technology improved making it much easier for semi-pros and part-timers to take acceptable pictures. Many graphic designers working on projects with low budgets decided they could produce some of the images they needed rather than looking for professionally produced images they could purchase.
  • There were also great improvement in image manipulation software – Photoshop, Adobe Illustrator – that enabled graphic designers to take simple elements and create eye catching images and graphics without the need of the services of a professional photographer.
  • There was a huge increase in demand for web pages to market products and services, and for blogs. Pictures were needed for these purposes, but in most cases there was no budget for photography. In addition a high percentage of the people who were hired to create these pages were “web designers” who understood technology, but had no idea what pictures should be worth or what it cost to produce them. They had no experience in buying pictures, and anyway “anything available on the web should be free.”
About that time along can Bruce Livingstone who produced a series of royalty-free stock CDs comprised largely of his own images. When the disks didn’t sell well he put the entire collection of several thousand photos online, called his site iStockphoto, and allowed anyone to sign up and download the images for free.

The site quickly gained popularity among web designers with no photography budget for the web sites they were being asked to produce. These designers also wanted to contribute images of their own and iStockphoto evolved into a photo-sharing model that allowed contributors to download one photo for every five they uploaded. By the end of 2001, iStockphoto had more than a million registered members. (Remember that in the heyday of rights-managed the agencies were in touch with 40,000 to 300,000 potential customers.)

As Livingstone added more and more images to the collection bandwidth started to become a significant cost. In early 2002 he instituted a micropayment licensing model and charged $0.25 per image downloaded. Twenty cents went to cover operating costs and $0.05 was given to the contributor of the download.

iStockphoto saw its first competition in 2004 when,, and entered the market. The first three all built upon the same open-to-the-public, credit-based payment model started by iStockphoto. Shutterstock’s founder used 30,000 of his own photos to launch the first subscription based micropayment offering and eventually opened his doors to all interested contributors. All the founders of these sites had a common background in Web development and Internet businesses.

Getty Purchases iStockphoto

In February 2006 Getty Images moved into the microstock market with the purchase of iStockphoto. At that time customers paid $1.00 for most images and it was estimated that iStockphoto had earned between $5 and $8 million in 2005. While the money was not great, the number of images licensed was significantly more than the 1.56 million that Getty Images had licensed at traditional royalty-free and rights-managed prices during 2005. Photographers received $0.20 for each of those $1.00 sales. At the beginning of 2006 iStock raised its prices for larger file sizes to from $5 to $40.

Customers started to flock to iStockphoto and other microstock sites. In 2006 iStock licensed rights to 10 million images for a total of $28 million in revenue. In 2007 they licensed rights to 17.55 million images for a gross of $72 million in revenue. Estimating iStock’s growth after that is a little murky because Getty Images was no longer a public company and providing financial data. However, it is believed that in 2008 iStock licensed rights to somewhere in the range of 25 million images and generated gross revenue of $163 million. It should also be noted that while there was still growth in the number of images licensed there was a steady decline in the growth rate year to year.

We tracked the sales of the top iStock image suppliers through 2009 and it appeared that there was no growth in the number of units licensed. However, there was a growth in revenue to about $200 million, partly due to the introduction of the high priced Vetta collection. In 2010 they introduced three more higher-priced collections – Exclusive, Exclusive Plus and late in the year The Agency Collection. Gross revenue generated for 2010 is believed to have been about $300 million. However, it appears that the total number of units licensed declined slightly from the previous year.

It looks like many former iStock customers have moved their business to some of the less expensive microstock brands. It is interesting to compare what seems to be happening with microstock with what Getty Images experienced a decade earlier with traditional royalty-free. Customers were no longer buying increasing numbers of images so the solution to growing revenue was to raise prices. That worked for a while, but it also set the stage for a whole new model that serviced the needs of the lower end customers. These customers started out with zero budgets for photography, but have developed into a whole new market.

Another interesting factor is to compare the time line of when a new business model was introduced until the time of maturity and the beginning of decline. With print catalogs it went from the early 1972 until the early 2000s. With traditional royalty-free it went from 1992 until the mid 2000s. With microstock it didn’t really start going strong until 2005 or 2006 and had already reached a plateau by 2009. As microstock continues to push its prices up will that open the door to a new discount alternative?

What’s Happening With RM and RF

The market for RM and traditionally priced RF is certainly in decline and the state of the U.S. economy has very little to do with it. The most telling statistics are those produced by Goldman Sachs when they examined Getty Images’ books at the end of 2007. In 2007 Getty’s gross sales of RM and traditional RF images (not counting iStockphoto) were $561 million. This revenue was about evenly split between that produced by RM images and RF sales. At that time (well before there was any indication of a recession) Goldman Sachs predicted that by 2012 gross sales of RM and traditional RF would be down 38% to no more than $348 million. Given the impact of the recession, I believe 2010 sales were no more than this figure and maybe less.

In 2007 I estimated total worldwide sales for still stock images (not including video, but including illustration) at $1.8 billion. About $700 million of that was for editorial uses and the remaining $1.1 billion was for commercial/advertising uses. Getty’s $561 million was about half of the total non-editorial sales for the industry. In 2007 total microstock sales by all companies were no more than $150 million.

After the recession hit there was a big discounting in prices as well as a movement away from the higher priced images into microstock. All in all, I think the industry lost about 20% from where it was in 2007 bringing it to about $1.45 billion in gross sales. It stayed at that level in 2010. Thus, editorial sales dropped to something in the range of $545 million and RM and RF commercial sales were down to about $900 million.

Of that $900 million about half ($450 million) was for imagery licensed at microstock prices. The other half was for a combined total of all traditional royalty-free and rights-managed licensing. While there will always be some demand for rights-managed licensing it is clearly becoming a much smaller segment of the total market in terms of total revenue generated (something in the range of 25% to 30% of all commercial/advertising revenue).

If we look at total images licensed in 2010, I believe those that were licensed based on use (rights-managed) represented only about one-and-a-half to 2% of the total. The other 98% were all licensed based on file size (royalty-free) and well over 90% of all images licensed were microstock.

The big question is where does the industry goes from here? As far as I can see there are no clear answers. Recently, Tom Grill and I made predictions of where we though the industry would be in five years, but given the dramatic unpredictable changes that the industry has gone through in the last 50 years I wouldn’t bet a lot of money that either of our predictions are accurate. The only answer, I think, is to watch carefully for new developments; try to stay flexible and ahead of the curve.

Copyright © 2011 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:  


  • Ellen Boughn Posted Feb 14, 2011
    Thanks,Jim for this review of the history of our industry. I understand that it is a quick summary but I think you have left out two very important events. First is the entrance of Tony Stone Images into the U.S. and subsequent sale to Getty Images for $60 million in the mid 1990's. This was key to Getty's success as it brought top advertising professional photographers into stock and furthered Stone's belief that quality not quantity would rule...a theory that I feel will save high end stock photography once the middle finally completely collapses.

    Finally. How could you forget Corbis? Corbis began the entry of big money into the industry and although always the step sister to Getty, an early entry into the industrial side of stock matter what Jonathan Klein has maintained for years was a Mom and Pop industry until he came along.

  • John Harris Posted Feb 16, 2011
    Very interesting. I thought this comment from the judges at SND is telling:

    Amid all our positive observations, we became concerned about the state of photojournalism in the pages we saw. We missed emotional photographs. Glossy magazines and newsprint pages with vast, luxurious expanses of space were largely devoid of powerful photojournalism.

    The lack of strong, documentary images puzzled us. We wondered if this has something to do with reduced investment. The industry has lost so many positions for picture editors and others, and yet great photographs can’t be made without time, care and commitment. Perhaps in places where the work is being done, print space to showcase it is no longer available.

    Having had the luxury of seeing hundreds of papers in the last few days, we’d like to raise a red flag on this issue. It’s one of print’s great powers to enable users to savor moments captured in the best photos. How can we recapture and deliver this value to readers?

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