Stock Photography: Is Volume The Answer?

Posted on 7/29/2020 by Jim Pickerell | Printable Version | Comments (1)

I can remember when I was primarily an assignment photographer and occasionally sold outtakes from assignments on the side. Most of the income I needed to support my family came from assignments. Stock sales gave us a little extra.

Demand for stock started to grow and it became harder for me to get assignments as I was working in an area where the competition was stiff from a lot of top quality experienced photographers. Buyers wanted to pay a little less than it cost to do an assignment. They liked having instant access to the stock image they needed and not having to spend a lot of their time organizing assignment shoots.

Despite the fact that customers paid less for stock images than assignments, the prices were still reasonable. Much better than they are today. In addition, the right stock image might sell multiple times to different buyers and end up earning more money than if I had taken the same picture on assignment for a single customer. I found I could produce stock images during my down time between assignments, and earn much more overall than if I concentrated on just doing assignments. I began to devote more effort to shooting stock rather spending a huge percentage of my time knocking on doors to try to get assignments.

The Middleman

However, the problem for any individual trying to sell stock images was, and is, that they need some way to show potential buyers what they had available. This was before the Internet. Buyers wanted to go to one place where they could review a broad cross section of available images from a wide range of photographers.

In the 1980s this meant stock agencies. Many of the agencies were started by photographers who understood the costs of producing images. The agencies would contact the customers, do the marketing and set prices. Of course, they often had to negotiate depending on a customer’s budget, but most users were professionals who recognized that there was a cost in producing the images they needed. In addition, they had been paying a lot more to get the images they needed through assignments so stock prices that were slightly lower than assignments were still a good deal. Customer found that using stock saved them time as opposed to organizing an assignment.

Most agencies paid photographers 50% royalties (some paid a higher percentage) and retained the rest of the fee customers paid to cover their costs.

These agents recognized that the higher the gross fee they could get for an image use the higher their 50% share of the fee would be. Thus, they worked very hard to get the best fee possible for every use licensed. They were also worried that if photographers started seeing very low royalties, they would pull their images and go to a competing agency, or stop producing. Most agency agreements were exclusive.

And finally, they were focused on selling to a limited number of major image users.

Then Came the Businessmen

Then came the businessmen who knew nothing about photography. They didn’t understand what was involved, or the costs incurred, to produce great images. To them every image was of equal value. It was simply a numbers game. They wanted to sell a commodity and what appealed to them was that they could get this commodity for nothing. Producers would simply give them their production and accept half of anything they could get if they sold it.

The businessmen wanted more and more product. It didn’t make any difference where the product came from because they had no experience in judging the quality or marketability of the product.

Their business skills were in negotiation. They would sell anything for any price rather than walking away from a deal. They wanted to get more and more product and sell it to more and customers. It didn’t make any difference who the customer was, or how much the customer was willing to pay. Any fee was better than no fee. Volume was the game.

One problem with this strategy is that some customers were willing to pay a lot more for certain images and certain types of use than others. But when you’re willing to license use of the same image for similar uses at a wide variety of price points word gets around. Eventually, everyone wants the same price as the lowest user paid.  

Not to worry, the businessmen will make up for the lost revenue from any individual sale, by licensing a lot more uses to other customer. The name of the game is getting more and more product from more and more suppliers and finding more and more customers. In theory there are an infinite number of potential users at the right price.

The businessmen have another advantage. If the gross revenue they generate is not enough to cover their costs on a 50% share of what the customers pay, they simply pay the creators who supply the product they are licensing less. It is then up to the creator to figure out how to cut his/her production costs in order to realize a profit.

In the early years the photographer agents were concerned about the success of their photographers – their workers. Businessmen are only concerned about maximizing profits for themselves, their managers and investors. There is no concern about the well-being of their workers. If a photographer can’t earn as much as he or she wants or needs, it’s not the businessman/agent’s fault. The photographers should work harder of go somewhere else to earn a living. There will always be more photographers to take his/her place.

Consider These Figures

In 2006, the last time Getty Images provided a detailed earnings breakdown to the public, their Creative Images division (RM and RF) generated $634.1 million. The average license fees were $536.25 for an RM image and $242.50 for RF. They licensed a total of 1,767,214 uses of which 973,933 were RM and 787,281 were RF. The average Return per Image in the collection was $327.

In 2018 Getty’s gross revenue for its Creative Collection had dropped to about $280 million and the average price per image licensed was down to about $29. One third of the licenses were for fees under $5.00.

As of the beginning of 2020 Getty stopped selling RM. Photographers tell me that Getty is licensing a significant number of uses for $0.17. Photographers get a 20% royalty share or $0.03 per use.

For the last two years Shutterstock’s growth trend has been flat. In 2017 gross revenue was $557 million; in 2018 it jumped to $623.3 million; in 2019 it was $650.5 and they are on track to do $641 million in 2020.

At the beginning of 2018 they had about 1.8 million total customers. Currently they are reporting 1,981,585 customers. The percentage of Enterprise customers (large business) is declining. More and more customers are finding that they can get by with cheap subscriptions. They don’t really need more than 10 images a month. The number of subscribers in the most recent quarter increased to 223,000 compared to 173,000 in 2019. Many of these subscribers are paying $49 a month for the right to use 10 images.

Are More Images The Answer?

In 2006 Getty had about 1.9 million images in its collection and licensed 1,767,214 uses during the year. Currently Getty has 28,827,172 images its collection and probably licensed 11 to 12 million uses in 2019. They licensed a lot more uses in 2019 than in 2006, but the increased number of licenses didn’t make up for the lower prices.

Since the beginning of 2018 Shutterstock has licensed an average of 45.8 million images a quarter with a low of 43.7 and a high of 47.7. In the last two quarters they are trending down. It certainly seems possible that despite a growing worldwide demand for images they may have all the potential users willing to pay even a few pennies for an image. In the first quarter of 2018 they had 197 million images in their collection. Now they have 359 million, a 55% increase.

At the beginning of 2018 Shutterstock had over 350,000 contributors. At the end of 2018 that number had jumped to 650,000. Currently they are reporting 1.4 million contributors. Based on estimated 2020 revenue and an approximately 28% royalty structure the average contributor will earn a little less than $125 in 2020.

More images or more contributors don’t seem to generate more revenue and they leave all image creators much worse off.

Copyright © 2020 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


  • Amyn Nasser Posted Aug 4, 2020
    Volume of the same Image. YES!!

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