Stock Images Traditional Versus Micropayment

By Author: Paul Marchiori
Total Articles: 10
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Certain friends who attended CEPIC conference in Florence earlier this month tell me the issue of micro-stock put a cloud over the whole affair. Of course, those comments did not come from my friends among micro-stock company personnel, whose outlooks remain decidedly sunny. I wonder, though, whether the old guard can fairly blame micro-stock for the commercial stock photo industry's troubled outlook. Naturally, the micro-stock model can only have a detrimental effect on the traditional business, over-all. But what if micro-stock never happened? Would the industry truly be much better off? I doubt it.


Beneath the surface currents of technological advances, new business models and licensing methods and the widely reported discontent of most stock photographers, the basic laws of supply and demand determine conditions in the stock photography business. With regard to supply, one industry leader referred to the building of huge wholly-owned collections by Getty, Jupiter and Corbis as an "image production arms race." For several years, the number of new RF production companies liked Imageplus http://www.imageplus.com ...
... launched each year has grown unabated. Even apart from micro-stock, supply seemed to outgrow demand by a wide margin over the last ten years. How many Royalty free images were on the market in 1997 and how many are on the market today? We can't determine the answer with any precision, but I'd bet the number has increased many times over during that time, even if we remove the obsolete and dated imagery from the pool.

The stock photo industry would, eventually, have to wrestle with its over-supply problem whether or not micro-stock had come along. The arrival of micro-stock on the scene has only served to hasten the inevitable reduction in average pricing for the industry, over-all.

On the demand side of the equation, we can say that overall use of images has grown as well, thanks especially to the Internet. The composition of that demand has changed, however, such that the dollar volume has remained flat. Demand from the typical stock photo client of ten years ago hasn't grwon significantly since then. If the number of units (number of images used) has grown, it is only because cheaper, technology-enabled sources of imagery have appeared, giving access to a new set of clients who would never have dreamed of using images at the old-guard prices. The additional units, then, because these new clients acquire them at such low prices, have not increased the revenue generated. In fact, as argued in our editorial titled "Scary Math" a few months ago, the availability of micro-stock to traditional as well as new clients results in a net reduction of revenue to the industry. (Ten clients each demanding a $200 image represent more dollar volume than a thousand clients each demanding a $1 image.) For how many years, now, has conventional wisdom dictated that the world-wide stock photo market totals $2.0 to $2.5 billion per year?


Managers at Getty and Jupiter, the two leading publicly traded companies in the industry, have begun to talk about their companies' strategic moves into activities other than commercial stock photography. Getty recently entered the music licensing business. CEO Jonathan Klein also talks about stock video and editorial, celebrity and sports imagery as drivers for growth at the company. Jupiter's CEO, Alan Meckler, has decided to dust off the previously neglected Jupitermedia division and get back into the trade show and conference business. A third, but much smaller publicly traded company, A21/Superstock, now generates 50% of its revenue from an entirely different business; selling framed wall-art to consumers and corporations. Earlier this week, Corbis, who has touted its rights licensing service and celebrity image business as central to its strategy to achieve profitability, became the last of the big three to throw its hat into the micro-stock ring. This collective de-emphasis of what had, until recently, represented the core business of these companies tells us a lot about how dimly the industry leaders view the future of the commercial stock photo business.

What does all this mean for photographers? Naturally, these market conditions will result in lessening numbers of photographers shooting stock. I question, however, the notion that this will become a real problem for clients who need good stock imagery and have the budgets to pay for it. High quality imagery won't disappear. Many production companies continue to create excellent material that clients will continue to value in line with the higher Royalty Free pricing. There will always be great shooters ready to meet that demand. Nonetheless, where regular old RF was once the default option for clients on a budget, micro-stock has taken that place, which is bound to have negative consequences for the level of demand of the higher-quality, higher-priced imagery.

I know a few photographers who combine the creative talent and the business talent, as well as the high personal energy needed to succeed strictly as stock photographers. At this point, however, I wouldn't recommend to any photographer starting out that they attempt to make stock their primary source of income. The industry suffers from an over supply that I don't see dissipating in the foreseeable future. And while per unit demand and usage of images has increased, the composition of that demand has shifted ever more from the higher to the lower price points.
Paul writes articles about the Stock Photography industry. He is also an employer at a stock photography distribution agency named Imageplus | http://www.imageplus.com .