Subscriptions Or Individual Licenses

Posted on 10/10/2018 by Jim Pickerell | Printable Version | Comments (1)

Over the weekend on Stockphoto@yahoogroups.com Rick Boden said, “I was getting serious about (putting my images with) Adobe Stock Images and then I realized they sell images via subscription. I have a very bad feeling about getting into an arrangement like that based on experience where my present agency (that) has a tie in with Getty where I am getting many royalties of less than a dollar because of subscription sales.”

The first thing to recognize is that currently all the major still images licensors offer subscriptions, or image packs. These sellers include: Getty Images, iStock, Shutterstock, AdobeStock, Dreamstime, Deposit Photos and 123RF. I estimate that gross creative revenue of the industry, worldwide, not including footage and editorial is about $1.6 billion. Footage and Editorial add about another billion to the world market.

In the still arena the Getty Creative collection generates approximately $280 million, iStock $180 million, Shutterstock $525 million, AdobeStock $175 million, Deposit Photos $35 million, Dreamstime $30 million and $30 million for 123RF. That’s about $1.255 billion or 78% of the $1.6 billion world market.



Getty’s low priced option is called Premium Access, not subscription, but it works about the same except that it is worse for image creators than most other subscription offerings. The problem with PA compared to all other subscriptions is that there seems to be no bottom price.
With most other subscription offerings the customer is only allowed to download a fixed number of images for a given price. We believe that with Premium Access the number of downloads is “unlimited.”

I haven’t talked directly to any Getty sales people, but here is how I think it works. Getty looks at its customers who purchase the most imagery annually. They call these customers and say something like, “We see that in the last year you’ve spent $120,000 purchasing individual images from our collection. If you’ll pay us $10,000 a month on a regular basis, and make a year commitment, we’ll give you unlimited access to as many images as you need, either RM or RF, whenever you need them for the next year.” The customer agrees and the process starts.



Of course, the next year when Getty goes back to the customer’s accounting department to renew the deal the customer says, “Thanks for the great deal last year, but we need more images and can’t afford to pay as much as we did last year so we’ll have to go somewhere else (read Microstock).” Getty says, “No wait, what can you afford? How about $9,500 a month?” And so it goes.

Since they have been offering Premium Access deals for over a decade, they have already given great deals to all their best high paying customers. Now, the only way to add more PA customers is to go to those making lower annual buys. At this point they may be offering PA deals to customers who spend $12,000 a year, or less. These customers end buying a very high percentage of all the images Getty licenses.



I recently did an analysis of the 2018 sales of a major Getty contributor. This contributor has both RM and RF images in the collection. 56% of the licenses were Premium Access. 63% of all licenses were for gross license fees of less than $10.00. Half of those under $10.00 were for gross license fees of less than $5.00. (See here.) The contributor gets a royalty share of these numbers.

Thus, suppose Getty does a deal with a customer for $1,000 a month ($12,000 a year). Getty’s deal with creators is to pay them a 20% royalty share. Each month, Getty keeps $800 of the $1,000 and divides the $200 among all the creators whose images were used. If the client downloaded 50 images, then each photographer gets a $4.00 royalty. But, suppose the client downloads 200, then each photographer gets $1.00. Or, if the client downloads 400, each photographer gets $0.50.

And there is no incentive for the client to put a limit on its downloads. They may download 5 or 10 images from various photographer, play around with them on their desktop and end up using only one in their actual delivered product.

Of course, if the photographer is working through an agent that supplies images to Getty (about 50% of the Creative images Getty represents) the agent get the $0.50 and the photographer gets a cut of that.

The Alternative


Rather than avoiding subscriptions the better solution is making the images available for licensing by multiple distributors. As you can see from the numbers above no single distributor controls the market.

Today, very few customers shop distributors to find the lowest price. If they can’t find the image they want at the first distributor they go to, they will go to a second distributor to see if they can find something they can use.

But, if they find what they want at any distributor they won’t go somewhere else to see if they can find the same image cheaper. At today’s prices, they can’t possibly save enough to pay for their extra time to do the additional search.


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 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

  • Vasyl Shulga Posted Oct 11, 2018
    Absolutely agree with The Alternative. I was exclusive with iStock with footage. Before 2017 it was like $4-5K / month. After they create PA my earnings dropped to less than $1K. Like 70% of all sales of my 4K video with 3D and animation was less than $5. The majority of them was less than $1. I run away from exclusivity, lost high prices and 40% to 20%. Now I am on Shutter, Pond5, Adobe, Blocks and my earnings grow 4-5 times.

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