Microstock Propaganda: All Users Are Created Equal

Posted on 8/29/2008 by Jim Pickerell | Printable Version | Comments (5)

When professionals object to microstock, they are not asking microstock contributors to stop selling images. Most professionals do not have a problem with images being made available for small uses at extremely low prices. Most are also not afraid of competition on a level playing field. All professionals really want is for amateurs to stop allowing themselves to be exploited by wealthy buyers.

It's hard for professionals to understand why TIME, for example, should be able to place a picture on its cover for $10 or $20, when the company can afford to—and arguably should—pay much more. The same applies to images used in ads, brochures and billboards produced by major corporations. If a small local business is printing 1,000 flyers, it is reasonable to sell them an image for a low price, but what if the business is producing 500,000 brochures? Consider the costs of design and printing for such a project; these are in tens to hundreds of thousands of dollars. It seems reasonable that the image that helps sell the product or service should be worth more than $10.

The problem with microstock is not that images are being sold to small users, who really cannot afford to pay more. It is good that these people have access to quality images. The problem is that a small percentage of total microstock users are exploiting the system and taking advantage of many students and amateurs, who produce some great images and receive very little compensation for their efforts.

The microstock pricing system treats all customers the same, regardless of the value they receive from using the image. All uses are priced at a level that anyone can afford, and those who can pay more get a gift, courtesy of the photographer. A fairer system to the sellers would be to base the price on image use, while still maintaining very low prices for small usages made by those who truly cannot afford to pay more.

Microstock and traditional photographers can co-exist. With a use-based pricing strateg—such as Modified Rights Ready—microstock photographers could earn a lot more from the images they produce, while continuing to provide images to all the small users they are presently servicing at prices every user can afford. The same strategy would also satisfy most traditional photographers and give them a chance to compete on a level playing field.

Let's consider some numbers. In 2007, iStockphoto licensed 17.55 million images. Probably somewhere in the neighborhood of 95% of those uses are for the small projects that microstock people describe as their primary market. Prices for these should remain the same. However, perhaps 5% of iStock's sales were to commercial customers who were working on larger projects with much bigger budgets. (When Getty purchased iStockphoto, 8% of Getty customers were also iStock customers, and that percentage has certainly grown since.)

iStock's average price per image licensed in 2007 was $4.10. Suppose iStock charged commercial customers something approaching the traditional market rate for various uses—erhaps just a little less, to give the customers an incentive to use iStock. Let's use the figures from Alamy, a traditional seller with some of the lowest prices in the industry, as a pricing benchmark: in 2007, Alamy's average price for a commercial use was $370. If iStock had charged 95% of their customers the average $4.10 price and the 5% of commercial users paid market rate for those uses, iStock would have grossed approximately $385 million instead of $72 million.

What would that have meant for Lee Torrens, whose views we discussed yesterday? To recap: he is making about $600 a month, or $7,200 annually, from 700 photos. If his sales matched the averages—and he may be able to do better—he would have made about $38,520 last year. That's not just a new camera, it's a new sports car. I suppose that instead of having that money in his pocket, he would rather give it to TIME, Verizon, Apple, Microsoft and other corporate users, because they have been so good to him!

Torrens also argues that microstock is great for photography students, who can earn while they learn. I would suggest that microstock is teaching students rather bad business skills. They may become excellent still photographers, but with rare exceptions, they will never be able to make a living producing still stock. They will find it impossible to sell images for more, or even as much, as it costs to produce them.

I also wonder what Torrens' wife charges small businesses for design work. Are her prices the same as she charged in the past? Does the customer get a price break because she buys microstock for her designs? Does she discount her prices as much as stock photographers are being asked to discount theirs? Is she now able to work for small business that could not afford her services before, because they can now get the photos they need much cheaper?

Copyright © 2008 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.  


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