What’s Up with Microstock?

[by Ellen Boughn]

I became aware of microstock images (derived from ‘micropayment) in the fall of 2006 while being SVP of a rights managed company.  Was this iteration of the stock photography business a threat, an opportunity or both for photographers?

©Yuri Arcurs/Dreamstime.com

I found out by joining one of the top microstock companies, Dreamtime. Since then the microstock industry has grown into a massive licensing machine enabling serious amateurs and many professionals to add a new revenue stream to their incomes.

Yuri Arcurs entered microstock at the beginning and now makes as much as the top Getty photographers.

The problem many photographers have with microstock is the low licensing fees. With millions of images available from hundreds of thousands of contributors, it can be difficult to see decent revenue even with professional level work. The cost per image in time and effort is greater than for traditional stock as the technical requirements are higher than  for rights managed work.

©Valuavitaly/Dreamstime

Others state and often violently that microstock is ruining the industry.  But one can’t blame microstock without also damning the camera companies that created inexpensive digital cameras, the Internet or the huge numbers of buyers that are using stock photography for personal blogs, small business websites or employees of companies whose budgets no longer permit the use of the higher priced images. The fact that those that used to pay high prices are now shopping for cheaper is a sign of times as much as anything else.

©Lucian Coman/Dreamstime.com

Can photographers make a living in solely in microstock? A few make hundreds of thousands but most can’t come close to that. Microstock can be another layer of the cake for professionals. Photographers today have to work harder and longer, earning from assignments, stock for traditional and microstock companies or workshops, print sales and any other uses of talent and equipment to create a healthy revenue stream.

Ellen Boughn is a long time stock business executive and author of The Microstock Money Shot—Turning Downloads into Dollars. She can be found at www.ellenboughn.com You can follow her tweets via ellenboughn

Placing Bets Away from the Middle: The Good, The Bad, The Traditional, and The Microstock

[by Shannon Fagan]

Bob Davies of PicNiche recently asked me, “There is a constant (and occasionally furious) debate about photography becoming commoditized by microstock producers and agencies. As a representative of photographers’ interests, do you think microstock or traditional stock offers the best opportunity for the stock photo industry as a whole to move forward, and will be a good or bad thing for photographers in general?

The quick answer is that we’ve received reports from several directions that indicate that during the end of 2008, on average, it did not matter which licensing model an image was placed into for stock, relative to it’s average earnings over time.  What did matter was the ability to participate efficiently, in volume, over a duration of a significant amount of time (2-3 years minimum).  It’s a fact that for the overall scope of the traditional sector of the business, there have been only declines in revenue, number of participants, and number of new images available.  It’s also a fact that for the microstock sector of the business, there have been only increases for the same measurable areas of growth.  For the future, as an investor of time and money to create new imagery, it would be advisable (like a diversified mutual fund) to attempt to place bets into all areas of image licensing: RM, RF, and Micro.  More specifically however, given natural limited time and resources, I would personally advise to focus stock shoots specifically on either one’s higher-end craft (RM) and/or lower-end volume (Micro).  I would consider pulling back on the middle area of image making (RF).  The reason for this is ironically not too dissimilar to the “pressure upon the middle-class” as seen in the US free market economy. It appears that to be in the “middle” is a difficult financial position to be in; as marketing strategist Jason Moriber with Wise Elephant explains. At this time in history for licensing content online, there appears to be more incentives for being either in the lower-end “long tail” of sales or the higher-end “luxury” end of sales. Image customers have been migrating their buying patterns to these two polar opposites.  There has been a consolidation of purchasing for reasons of price on one end and unique exclusivity on the other.  Partially this has to do with the availability of great content at low micro prices, an overabundance of mediocre content at traditional royalty-free prices, and the continued need for exclusive content where price is less of an issue.

Bob with PicNiche asks “will this be a good or bad thing for photographers?”  It will undoubtedly be a bad thing if the photographer needs to make a full-time living from photographic stock image licensing.  The reason for this is summed up in the human element of producing images.  It is extremely rare that the same photographer can individually shoot to both the high-end and low-end of the market for general consumer image needs.  This is a biological creative fact of our existence as artistic based businesses.  Stock photography is an innovative business that must manufacture images in volume to make enough money to reinvest in making more images.  Generally 99.9% of content creators do well in either one end or the other of this image creation; i.e. they are either great craftsmen or great manufacturers.  It’s difficult to be both.  While this can ideally change over time, doing it simultaneously is near impossible in the volume needed to succeed financially from stock sales alone.  It is thus advisable to focus on one end of the market and to make that decision based on one’s personal skill set and interests.

Shannon Fagan has stock imagery represented by over fifteen different global collections in all licensing models.  He is the former President of the Stock Artists Alliance.  He’s currently in the “middle” of a competitive entrepreneurial tech start-up course with The Founder Institute in New York.

Taking Stock of Stock Photography

[by Jenna Close]

I wasn’t involved in this industry during the glory days of stock photography, but from what I hear it was a time of plenty.  Plenty of money, plenty of freedom, plenty of fun.  It seems to me that royalty free images, market saturation and perhaps even the digital age have closed that chapter in history.  That said, I don’t think one should write off stock as a means of income.  With due diligence and a little research, stock is a great way to squeeze more money out of your images.  For me, the successful route has been finding a smaller, rights-managed boutique agency that specializes in a certain type of imagery (in my case, images relating to the environment).  That way, many of the images I shoot for clients can be re-used as stock.  While my stock sales wouldn’t pay the bills on their own, it’s a nice source of secondary income without much added work.

Jenna Close, along with partner Jon Held, run P2 Photography.  They specialize in imagery for the alternative energy market.  You can find Jenna at www.p2photography.net.

Stock ROI

[by Judy Herrmann]

Yeah, I know.  These days, it seems like the photo stock market and the other stock market have far more in common than their names.  The return on investment [ROI] in both markets has plummeted and just when you think it hit rock bottom, it manages to fall again.

Like any other low margin business, the key to protecting your ROI when licensing stock imagery is to really watch the “I”.

Obviously, controlling costs is key.  Investing in lavish production shoots with an eye to licensing the results profitably is extremely risky.  A better move would be to invest in research.

Images that sell over and over, netting five or even six figures over their lifespan still exist.  The checks my studio receives each month are smaller than they used to be but those high-selling images are still selling. The challenge is figuring out ahead of time, which images are most likely to sell well.

Researching which types of images are still commanding higher licensing fees, which genres are less saturated with imagery or which new trends have not yet been extensively covered isn’t easy but that’s the kind of knowledge that will increase your chances of producing imagery that earns you a profit.

The bottom line?  Supply is up, fees are down and the number of dollars going into the creator’s pocket has steadily declined.  Licensing stock imagery profitably is still possible but so is losing your shirt.  My recommendation sounds remarkably like Vanguard’s credo: keep your costs down and perform due diligence before you invest.

Oh, and don’t forget the small print: past performance is no guarantee of future returns.

Acclaimed advertising & editorial photographer Judy Herrmann conducts seminars and one-on-one consultations that help people grow their businesses and build more satisfying careers. Judy@HSstudio.com