Why 70% Of Images Licensed Are Microstock

Posted on 5/18/2009 by Jim Pickerell | Printable Version | Comments (6)

A recent article on “Rights-Managed Marketing Strategies” estimated that “for commercial images, rights-managed licenses account for 3% of the total number of annual licenses. Traditional royalty-free images make up 6%; 20% goes to subscription services and 71% to microstock.”

One reader commented: “Just up until recently traditional RF sustained nearly 40% to 50% of the commercial market, right? Is microstock’s new claim of 70% due to the increase of new total buyers? If so, it would be interesting to see a chart breaking down the total number of traditional buyers represented in these percentages compared to new buyers. Meaning, of the 70% who is new and who is traditional and why has RF and RM decreased in commercial market share so rapidly—all due to the volume of buyers in the microstock space?”

First, it is important to once again point out that the term “commercial” refers to non-editorial images. Traditional sellers still have a very dominant hold on customers who need editorial images. “Commercial uses” include everything else, such as the type of rights-managed and royalty-free uses that Getty Images defines as “creative,” as well as microstock and subscription images used for non-editorial purposes.

It is correct that as recently as four years ago—before microstock—the revenue generated from rights-managed and royalty-free sales was about equal (see Getty’s 2006 and 2007 images used numbers). Since the average price of a royalty-free images was about half that of a rights-managed image, this means that there were about twice as many royalty-free images licensed as right-managed. This is important, because the percentages provided in the first paragraph address the number of images licensed, not revenue generated.

When microstock entered the picture, it did much more than just steal customers from traditional sellers. Microstock sellers uncovered a whole new body of customers who had not previously purchased stock images and who could never justify paying anywhere near traditional image prices. Yet there is a lot of disagreement on this point. Many traditional sellers want to believe that all microstock is doing is stealing their customers—customers who would have paid more if microstock were not so cheap. There is, however, a lot of evidence that disproves this theory.



When Getty Images purchased iStockphoto, Getty analyzed both companies customers found that only 8% of iStock’s customers were also Getty Images customers. Obviously, there was a huge percentage of iStock’s customers who had never purchased an image from Getty Images and probably never even heard of the Seattle company.

Some Getty customers that had not used microstock prior to this acquisition are probably using it now. But a bigger problem for image producers trying to sell at traditional prices is not in the number of images these traditional customers are using, but in the prices they are being charged, as Getty—and everyone else—lowers prices to try to hold onto their traditional customers.

One of the biggest indications of this are Alamy’s first quarter numbers, which show a had a 27% drop in revenue compared to the first quarter of 2008. Yet Alamy actually sold 2.5% more images than the year before. There is every reason to believe the same thing was happening at Getty and the other agencies that do not disclose their numbers. Photographers can determine whether this trend is accurate for individual image producers by looking at the number of images licensed and revenue generated by quarter.

Still, the biggest indication that there is a huge number of new image buyers that have never before been seen by traditional sellers is the dramatic growth in the number of images licensed by various microstock companies. iStockphoto is estimated to have licensed rights to less than 4 million images in 2005. In 2006, it was 10 million. In 2007, it was 17.55 million, and in 2008—an estimated 25 million. The combined total images licensed by all the other microstock and subscription companies in 2008 was greater than those licensed by iStock, according to figures provided by various photographers. Meanwhile, the number of images licensed by the traditional sellers was flat throughout this period.

So yes, the reason the percentage of images licensed for commercial use has changed so dramatically is that we are now dealing with a much larger customer base. Over 90% of these customers cannot afford to pay very much for the images they need, but they do use images and they will pay something.

The dramatic change in volumes of images sold per licensing model has not been caused by a similarly dramatic decline of traditional rights-managed and royalty-free imagery, although these numbers have declined somewhat. Rather, the change is the result of astronomical market growth. But traditional sellers continue to focus on their old customers and do nothing whatsoever to identify or address the new buyer pool.


Copyright © 2009 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

  • Jonathan Ross Posted May 18, 2009
    Thanks for the info Jim,

    I would love to see actual sales figures in dollars rather than percentages. I am licensed in all three models and my RM out sells my Micro by a very large amount per image. I have far less RM than I do Micro images in the market ( 900 RM and !900 Micro ) and my monthly return from RM is huge compared to my Micro. Of coarse this has to be offset by the production cost for each sales model and how many selects are being accepted in RM comparison to the open door of Micro. I made those 1900 Micro images in a month and a half it has taken me over a year to get my RM collection up to where it is.

    Best,
    Jonathan Ross

  • Bill Bachmann Posted May 18, 2009
    The problem with advertising that SO MANY Microstock images are selling in NUMBERS is that non-experienced photographers jump onboard right away with Microstock. Then they find out QUICKLY that they can NOT make a living selling images for $1.00 (and getting 20 cents for a commission). So many many photographers flood the market with super cheap prices and then go and sell hamburgers somewhere with tiny commission checks coming in that could not even begin to support them.

    I have been in the business a long time and seen so many people come and go saying they are "photographers". If they really want a CAREER as a photographer, and want to be respected as one, they need to go and shoot what they love really well, put the images into Rights Managed stock and make a REAL LIVING. You can not travel the world to shoot, pay costs of production, and sell them for $1.00 and expect to be a full-time photographer! I would put my yearly income (after expenses) from stock up against anyone in the world that claims he/she makes a killing in Microstock! Even the top producers of Microstock -- and I know them -- just run a treadmill of models holding phones, computers, etc against a white background and then brag that they are one of the most downloaded Microstock people on cheap cheap websites i the world. But what is the income they take home after rushing thru their shoots like assembly lines to get LOTS of images and selling for them one dollar (to take hoe 20 cents)? Look at my website, my books, etc and I do NOT sell ANYTHING for one dollar, have many, many, many $20,000 plus exclusive sales, and a fair price for my work being used each day of my life. Most of the thousands of photographers selling Microstock do not even take home $20,000 in a year. And even the ones that do could make so much more --- and be much more respected to themselves and peers -- selling the RM method and seeing those big sales on their monthly sales reports! Do you want to shoot beautiful images and be paid wll for them, or do you want to shoot LOTS of production, hope to sell many of them cheap, and try to make it up in numbers of sales??

    The only problem I see in the business is the rates are falling sometimes because clients are getting spoiled by beginning photographers selling for one dollar and, in this bad economy, the bean-counters in the companies talk the creative people into buying CHEAP, NOT NECESSARILY GOOD! Most Microstock sellers (with the excepton of the big rushed production shooters) are just non-photographers who like to think they are "being published... Wow!" Ask yourself... do you want to be published many times in cheap, dollar sales to nowhere or do you want to see your ads in major publications each month and BE A PHOTOGRAPHER for a career??

    Check out my website www.billbachmann.com and you can se you CAN make a good living seeing the world and shooting lifestyle without selling your hard-earned images for a dollar and HOPING to make a living! There are good shooters staying with Rights-Managed and making a darn good living selling at a fair price. I wish more people in our business cared to do it well rather than cheap.

    Bill Bachmann
    Orlando, Florida

  • Fred Voetsch Posted May 18, 2009
    Bill Bachmann wrote:

    "I wish more people in our business cared to do it well rather than cheap"

    I don't see why as that would seriously increase your competition.

    One of the reasons stock photography got as expensive as it got was the difficulty and cost in preparing an image for use in publication. That is no longer true and what has been exposed is how little real skill is needed to produce a typical stock photo now that anyone can push a shutter button and have a ready-to-use image. Ready for the vast majority of uses, that is. That says a lot abou the level of skill needed to be a photographer; if you are well above that level you have little to worry about.

    IMO, photographers who complain about the vast number of photographers selling micro or RF should not be complaining about THAT but should be thankful that they were around during the golden age when the could make some real money without much competition.

    ...reminds me of the old man on his death bed who has lived a long life full of wine, women and song and instead of being grateful, curses God for bringing it to an end.

  • Bill Bachmann Posted May 18, 2009
    Believe it or not, Fred, I try to help others... not worry about my competition!

    I see so FEW photographers able to make a living because hey do sell out and go Microstock. So they do photography "part-time" and have a REAL job to live. If only they did realize that they could make a living at it if they had more confidence and would be paid much more for their good pictures than practically give them away.

    I don't know if you practice what you preach, but I do! I do not sell RF or Microstock. I give seminars & write books to try to get them to see that they can make a living at photography. Sure, it does mean more competition for me, but it would INCREASE the Perceived Value of photography to the buyers.

    And I disagree that it takes little knowledge to "push a shutter" to get a stock image. Maybe one that someone wants to pay $1 for, but not one that they want to pay a lot more or build an ad campaign around.

    Yes, I was around for the Golden Age when we made money. But it was not because here was little competition.... it was because there was no CHEAP competition that clients could "make due" with a shot because it is only one dollar!

    Look at your own photography, Fred, and see if it measures up. I am trying to get others to see that they don't have to sell cheap and do this in addition to two other jobs to make a living. What do you do? I am proud to say I am a photographer! Look it up, I am not afraid of competition at all and do write articles(one in Professional Photographer this month of May just out or look at my website www.billbachmann.com ) trying to help other photographers so hey don't get snowballed into selling so cheap thinking they HAVE TO!!! Jim Pickerill, who used to own and now writes for Selling Stock knows of my stock sales over the years.

    I hope you hear the message and not shot the messenger.

    Bill Bachmann
    Orlando, Florida

  • Fred Voetsch Posted May 20, 2009
    Bill Bachmann wrote:

    "Look at your own photography, Fred, and see if it measures up"

    I would say it doesn't, not to yours or to the best photographers I know. Nor does most of the photography out there, and that is really my point. To me photography is more of a fun, casual thing that allows me an excuse to take a trip to a place I've been too many times already.

    Does that mean I don't have a right to sell my photography? Am I only allowed to sell it at a certain price? If so, who sets that price?

    Micro is a reality brought about by technology (digital cameras and the Internet) and I am not personally responsible for it nor can I change it. BTW, I do not sell micro and I do not recommend to photographers entering the stock photography business that they sell micro to start if they are trained in photography and plan on making a living at it. In this we agree; a talented photographer with should be selling RM or should at least start out selling RM so as to give themselves the opportunity to sell fewer images for more money.

    So I applaud you for pushing photographers to sell RM but I do not have a thing against the micro world and see it as one of the creatives forces driving the business forward. I believe that established photographers like you need to look at micro as a pro baseball team looks at a farm team; you should reach out to them, not with anger, as many RM sellers often do, but with the intention of educating the best of them and bringing them along to a higher level.

    Seeing photography like yours is inspiring, Bill. Please don't reach out to the micro sellers with a fist but with a hand up. I see too many RM sellers do that and it drives them away. You can inspire them to better things and I think that only talented photographers like yourself can do so. Well, maybe money, but micro makes it awfully easy to get started and to get a bit of money rolling in and that is pretty enticing to most. The micro world feeds a hunger; there are lots of photographers out there; are you reaching them? iStock is.

    And don't forget that many have no desire to do much more than sell a few images now and then and micro allows them a marketplace. I will always defend their right to sell or giveaway their images as they choose. What I think our responsibility is is to make sure they knows the facts and the fact remains that RM is where the money still is and is likely to stay. I believe that will be true well into the future and that those who believe in RM stock photography should work a little harder at reaching the masses if they want to not be seen as elitists.

    Is that a challenge? Yes it is. Please join my Yahoo group, "Selling Stock Photography" at http://tech.groups.yahoo.com/group/selling_stock_photography/ to spread the word, their are over 2,000 mostly micro sellers there who need to hear from people like you now and then.

    Respectfully,

    Fred Voetsch
    Owner - Acclaim Images

  • Fred Voetsch Posted May 20, 2009
    Jonathan Ross Wrote:

    "I would love to see actual sales figures in dollars rather than percentages."

    I agree. Only using percentages provides misleading data. If I am not mistaken RM sales account for the majority of sales in dollars even with a small percentage of the sales in images.

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