What’s Happening To Editorial Pricing?

Posted on 9/22/2015 by Jim Pickerell | Printable Version | Comments (1)

Recently, I received some second hand information about a major editorial agency in Europe that licensed about 70,000 image uses in 2007. That number skyrocketed to about 400,000 in 2014. Sounds great. But, here’s the rest of the story.

The average price paid for each use in 2007 was about $167.00.  The average price for each use in 2014 was a little over $12.00. Consequently, in spite of the almost 6 times growth in the number of images used in 2014 compared to 2007 the total revenue generated in 2014 was less than half that generated in 2007.

Due to declining revenue this agent has been forced to reduce staff to about 25% of what it was in 2007. And, this agency is one of the successful ones in Europe.

Caution. I don’t have exact figures. These numbers may not be exactly correct. But, I think they provide an accurate representation of a trend that needs to be carefully considered.

Many people talk about the increased use of images on the web and argue that since there is growing demand for images there must be great opportunities for photographers and revenue growth. Certainly the jump from 70,000 to 400,000 demonstrates increasing demand. But volume growth is not enough if unit prices drop faster than the rate of volume increases. And production costs have also increased in order to create the images that were licensed in such high volumes.

Much of this volume is in web use. If the customer is a newspaper the accountants point out that ad revenue is declining and all publications are now required to have a web site. The web sites need lots of images, but they are not making any money from their web site, so they need a different pricing structure for web uses. Sometimes they pay more when an image is used in print, but the vast majority of uses end up being on the web.

An increasing number of today’s customers are web only. They don’t produce any print publication. They demand lower prices. Any given agent can refuse to supply them, but someone else will. The web site will get the images it needs at the price it is willing to pay. The agent says to himself, “I’ve got the images. Something is better than nothing.”

Agents don’t lower prices randomly. They continue to seek the best deals they can get. But, lower prices are the only way to hang onto existing customers and get new ones. A few agents and individual photographers refuse to license uses for prices that are lower than they were paid a few years ago. That usually results in such a dramatic decline in sales that they end up earning less money overall, even at their higher prices. Fewer and fewer customers can consistently justify paying the higher prices in today’s market.

What’s Happening To Photographers?

Many experienced photographers who have been in the business for a while have cut back on producing new work. They’ve been forced to find other ways to earn enough to support themselves.

Of course, there is a flood of new, young photographer willing to fill the gap. This has been true as long as I’ve been in the business, but the percentage of people who have been licensing rights to images for less than five years seems to be much greater today than was the case ten or twenty years ago.

These young photographers, many of whom are very talented, see their older colleagues who have had great careers. They believe that if they work hard they can do the same. Often they are in a stage of life where their income needs are much less than someone who has been working for 10 or 20 years and may have a family to support. Start up costs are relatively low compared to other businesses and these young photographers are willing to accept low pay for a chance to learn and build a reputation. They have confidence that as they get more experience their earnings will increase.

There are also an exploding number of part-time photographers who have no interest whatsoever in a career. They just like to take pictures of certain subjects. Often they are more interested in the access being a photographer gives them than any revenue they might earn from their efforts. Such people have always been a part of the stock photo business. It is impossible to get hard figures on the number of such part-timers relative to full-timers trying to make photography a career. But I believe worldwide the number of part timers who earn a little money from their pictures is growing rapidly while the number of people who earn enough to support themselves is declining at an even faster pace.

Given today’s technology almost anyone can take usable pictures if they are in the right place at the right time. And it is becoming easier to get those pictures where potential users can find them. However, in the long run, given the volume of images being produced, the distribution system may be the Achilles heel in delivering what customers really need.

This shift from full-time to part-time is not just happening in the stock photo industry, but in many career fields. In the future, rather than focusing on a single career choice, almost everyone may find that they need to engage in many different revenue producing activities in order to generate enough combined income to support themselves.

A recent story in the Los Angeles Times about Uber drivers may be of interest to some photographers. Customers love the Uber service because it is about half the price of a regular taxi and the pick-up times are usually quicker. (Customers love stock photos because they are cheaper.)

Uber drivers earn in the range of $13 to $17 per hour, but must pay for gas, insurance and the wear and tear on their own car. There are between 20,000 and 30,000 Uber drivers in the Los Angeles area, competing with 3,600 essentially full-time taxi drivers sharing 2,600 cabs. The part-timers take market share from the full-timers and make it much more difficult for full-timers to earn a living.

Copyright © 2015 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.  


  • Larry Minden Posted Sep 22, 2015
    With a little luck they'll continue their trend line & go out of business leaving those of us who value the images we represent to hold the line on pricing. Agencies like this that give away their images just make it tough for the rest of us by creating an unrealistic expectation for rock bottom pricing among buyers.

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