Who Loses by Focusing on Increasing Traffic

Posted on 3/20/2009 by Jim Pickerell | Printable Version | Comments (1)

Traditional photographers argue that it is impossible to make money by licensing their images at microstock prices. They say volumes will never make up the difference. Despite that argument, Getty Images is licensing more and more images at Premium Access prices, which are not all that far away from what microstock sellers charge. Getty’s volumes are not making up the difference for traditional photographers, but that is because Getty is selling these images to volume customers who used to pay traditional prices—not reaching the new customer base that microstock addresses.

In his blog, TechDirt, Mike Masnik argues that the only people who lose when the focus is aimed toward the top of the market, rather than volume at the low end, are “the huge mega-successes.” Masnik claims that the traffic growth strategy “inflates the ability to have a lot more moderate successes that add up to a lot more overall.” With the existing system, there are the haves at one end, and the have nots—or the hoping to be haves—all the way at the other. “However, rather than simply jumping all the way from the super successful to the poor, starving and hopeful, you get a much nicer distribution from top to bottom of super successful, to moderately successful to less successful—but with a much greater overall value under the curve,” he says.

The concern comes from the “rock stars” who lose their status, but their argument completely ignores what happens to the rest of the curve. “Many who were at the other end—the poor, starving artists—are moved into a position to be able to actually create a lot more product, rather than having to go out and find ‘a real job’ that pays them a regular salary. The only ‘losers’ here are a few people at the very, very top. Everyone else benefits—and the net benefit is tremendous. It does involve a shift in business models for those who relied on the hits, but it’s a huge opportunity to expand a business, while making it a lot less variable and a lot less dependent on catching one or two big hits to make the numbers work,” Masnik continues.

Even for those at the low end, who are supposed to benefit this theory, it seems hard to accept. iStockcharts may offer enough data to make a judgment about the truth or falsehood of the argument.

iStockphoto contributor earnings
Contributor rank
Average downloads per day for 90 days* Total downloads* Annual royalties (US$)
90 days 360 days Non-exclusive (at $1.30 each) Exclusive (at $2.60 each)
1 698 62,804 251,215 326,579.76 653,159.52
25 142 12,735 50,940 66,222.00 132,444.00
50 109 9,778 39,110 50,843.52 101,687.04
75 87 7,799 31,198 40,556.88 81,113.76
100 76 6,801 27,205 35,366.76   70,733.52
150 48 4,311 17,244 22,417.20 44,834.40
200 46 4,134 16,535 21,495.24   42,990.48
250 39 3,506 14,026 18,233.28   36,466.56
300 34 3,034 12,136 15,776.28 31,552.56
350 31 2,764 11,056 14,372.28 28,744.56
400 28 2,497 9,986 12,982.32 25,964.64
450 25 2,276 9,104 11,835.72 23,671.44
500 23 2,066 8,266 10,745.28 21,490.56
550 21 1,902 7,607 9,888.84 19,777.68
600 20 1,766 7,063 9,182.16 18,364.32
900 13 1,185 4,741 6,163.56 12,327.12
1,200 9 853 3,413 4,436.64   8,873.28
1,500 7 656 2,624 3,411.72 6,823.44
1,800 6 520 2,081 2,705.04 5,410.08
*Rounded to the nearest full digit. Sources: iStockcharts (contributor rank and 90-day daily download average) and Selling Stock calculations (remaining estimates). Notes : 1. The table presents estimates of the total downloads and resulting royalties for 19 iStockphoto contributors, randomly selected among those ranked by iStockcharts in the top 1,800 contributors. 2. Non-exclusive iStockphoto contributors currently earn $1.30 per download; exclusives earn $2.60 (appx.).

The table at right estimates annual earnings of a sample of iStockphoto contributors. Since most non-exclusive iStock contributors have the same images on many other microstock sites, and most say their combined earnings from other sites are greater than iStock earnings, the top 50 iStock contributors can expect to earn over $100,000 this year from microstock photography (see the last column).

In addition, the data presented in the table does not account for either holidays or growth of revenue. The holiday season fell during the last 90 days, so it is reasonable to believe that comparable periods for the rest of the year might have higher numbers of downloads. Similarly, iStock had 70% growth in 2007 and 40% growth in 2008, while the royalty estimates presented here are based solely on the past 90 days and do not account for growth.

It is interesting that the top 50 iStock shooters can all expect to earn more than $100,000, particularly since a number of the people in this group have only been contributing images for three or four years. In contrast, recent Selling Stock estimates place Getty’s 50th photographer between $125,000 and $150,000 in annual earnings. Those between the 50th and 100th positions are earning between $70,000 and $100,000 and the next 400 can expect to earn between $20,000 and $70,000.

If we were able to order the top-500 list from Getty, it is likely that their earnings would be very close to what these iStock photographers are earning. If either the average return per image or microstock traffic increases just a little, it is very possible that most microstock photographers will be earning more than Getty photographers who are in a similar relative position within their group.


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

  • Tim Mcguire Posted Mar 20, 2009
    Hi Jim,

    It would be interesting to know what the profit margins are for micro shooters and traditional shooters with equal revenues. Part of that equation would be, how many pictures does it take to achieve a certain level of revenue on average and how long does it last.

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