Stockpiling trouble: How the stock industry ate itself?
The rise of stock imagery has led to falling rates for professional photography, owing to market saturation, unwise marketing strategies, the internet and amateurs, says Betsy Reid, formerly founding executive director of the Stock Artists Alliance.
Author: Betsy Reid
27 Jun 2011 Tags: Stock agenciesBusiness
Betsy Reid was founding executive director of the Stock Artists Alliance, and led the organisation's advocacy and education efforts from 2002-2009. Today she works at the Georgia Center fro Nonprofits as senior manager of strategic communications.
From the mid-1990s on, the stock picture industry experienced a decade of expansion and revenue growth. Fuelled by professional photography, increasing client demand and significant corporate investment, stock was a buzzing cottage industry whose time had come. Evolving from the undervalued, second-rate libraries of the 1970s and 80s, picture libraries built strong rights-managed collections by actively recruiting professionals and working closely to support and market their imagery.
For the relatively small cadre of photographers fortunate enough to find their way in, it was a heady time. Demand far outstripped supply and, with buyers limited to shopping by printed catalogue, a select group of a few thousand images in each book commanded extraordinary profitability. Photographers could make an excellent year’s pay, and were therefore highly motivated to invest in creating more. The quality and quantity of imagery repositioned stock as an alternative to commissioned photography, in turn further feeding its expansion. The partnership between agent and artist ensured that production aligned with demand, and the recession stoked the need for efficient, economic sources of photography, which eliminated production costs and ensured buyers knew what they were getting from the outset.
For photographers, the rights-managed model helped ensure that the value of a licence reflected the value of the usage, and emphasised the marketability of their imagery versus the marketability of themselves. Average fees ranged from the low hundreds for editorial rights up to thousands of dollars for some commercial licences, and the opportunity for multiple licences. The only downside was the impact on commissioned photography.
Market failure
By the early 2000s, collections had moved online and, while revenues remained robust, growth slowed as the industry matured and competition increased. Stock distributors launched a host of reactionary tactics in response, including reducing royalty rates, expanding sub-distribution agreements, offering micro-level pricing to top customers and producing wholly owned collections. The net effect was the redistribution of industry revenues, with less going to the photographers and more to a widening web of distributors and aggregators.
The Stock Artists Alliance’s ongoing Investigative Shopping Project revealed these hidden, often layered, sub-distribution arrangements. Photographers who had been puzzled by surprisingly low licence fees now had an explanation; many had been unaware that the revenues they received were often a meagre single-digit share of the licence fee, rather than their contracted royalty rate. When asked directly about these practices and the lack of transparency, the company line was always the same: these deals are essentially none of your business.
SAA’s study also suggested a troubling degree of accounting errors, as most of our investigative buys failed to be reported to artists until we contacted the company after a year or more of waiting. In 2007, a controller-turned-whistleblower gave SAA internal accounting documents, alleging that one major library owed several million dollars to contributors in back royalties. The company was dismissive of the accusations but SAA contacted hundreds of artists and substantiated the claims, leading to much of the monies owed being paid.
Back in the studios, the professional photographers anxiously watched the steady decline of their royalty revenues, commonly experiencing a 30-50 percent drop over the past few years, to as much as a 90 percent drop today. Once valued contributors, they found themselves increasingly marginalised. With their trust in the distributor relationships reduced, and a loss of confidence that investments in image making would be recouped, professional photographers started to drop out. Sadly, this was the root cause behind our decision to close SAA this year. As the stakeholders have dwindled, it was no longer economically viable to run a trade group dedicated to protecting their interests. SAA will officially shut down at the end of 2011.
Royalty free
Straight Talk on Stock Licensing Models, a 2005 SAA white paper, addressed the shortcomings of the royalty-free model, stating, “The disconnect between price and use in royalty-free licensing becomes an increasing concern as the media mix shifts away from print and more into electronic media. By discounting electronic media uses, RF has trapped the industry into a pricing equation that undervalues licences for the growth sector of the market.”
Royalty-free licensing was simple, easy, automatic and economical for the stock industry, though, so it jumped in and focused its energy and resources there. Contributors were strong-armed into producing royalty-free imagery, and experienced a corresponding reduction in the acceptance rate of rights-managed submissions. A direct and lasting consequence was the decline in the development of fresh rights-managed imagery, and a glut of royalty-free content. Anecdotally, those who contributed to royalty-free collections mostly did not realise the distributor promises of “higher volume compensating for lower fees”. In fact, they found that royalty-free images had a shorter shelf life and far more rapid decline in rate of return. In effect, the focus on RF compensated distributors for declining revenues by taking a higher share.
From bloggers to boardrooms, most are sourcing royalty-free or microstock images. A small segment of more discerning clients remains and continues to invest in licensing rights-managed imagery: the value left in the stock business for photographers endures in these images, and these image users.
The internet
Once stock collections and submissions migrated online, the number of instantly accessible images climbed into the multi-millions – this month, one of the top libraries announced hitting the 23 million-image mark. But while it is now easy to quickly access tens of thousands of images on any subject, searching for one great image can be exasperating and fruitless. Digitisation of the stock industry has expanded access to imagery, but it also made image search a keyword-driven process rapidly overwhelmed by sheer volume.
Stock distributors also failed to establish a proper foundation for digital licences. They often simply tacked electronic use onto printed licences as an afterthought and as more transactions moved online, this undervaluation continued. It was a tragic misstep, resulting a huge loss of potential licence revenues and perpetuating the low value associated with digital image usage today.
The stock distributor community’s failure to agree a cohesive set of standards and best practices for digital image processing, particularly metadata, had just as damaging an effect. The 2006 Metadata Manifesto was SAA’s effort to focus the industry on a serious and escalating problem, because “without an industry-wide commitment to embed and preserve metadata, digital image files are effectively stripped of value and protection.”
SAA’s subsequent partnership with the US Library of Congress resulted in an extensive photo metadata education and outreach effort to photographers, distributors, and image users that lives on at www.photometadata.org. SAA also actively participated in efforts by intiating a universal licensing system to simplify and facilitate the communication and management of image rights, with dedicated industry bodies and working groups, ranging from the IPTC to the herculean efforts of the PLUS Coalition. These critical initiatives continue to progress but the stock industry has failed to coalesce with the focus needed to establish and propagate the urgently needed standards.
Infringements
While the number of image users has grown exponentially with the internet, most are not professionally sourcing imagery. Among them is a shocking rate of infringing users, whose actions range from inadvertent misuse to intentional theft. According to Picscout, a leading tracking service, nine out of every 10 stock images they found online were unauthorised uses. SAA described the challenge in a 2007 white paper, Infringements of Stock Images and Lost Revenues, “With just a click and a drag, users can move a digital file from any website onto their desktop – without payment or licence. Although images sourced this way are typically low resolution, they are often good enough. High resolution is traded for an unbeatably low price – free.
“In addition to outright piracy, digital media has also increased the potential for legitimately licensed images to be used outside the scope of the original licence. Once downloaded, image files can be easily repurposed and redistributed to other users. File names are commonly changed and identifying metadata is stripped or altered, making these images vulnerable to misuse.”
In 2005, SAA engaged with Picscout in a joint study tracking a sample of rights-managed imagery represented by the top two distributors, neither of whom were using this technology at the time. Our findings suggested staggering industry losses. Since then the industry has stepped up royalty compliance efforts, generating significant revenues and increasing awareness of the consequences of infringement. Getty Images recently announced that it had acquired Picscout (for $20m).
SAA’s Infringements report observed that RF poses an even greater problem. Misuse of RF is further fuelled by a widespread misperception that a royalty-“free” licence implies unlimited use by an unlimited number of users, and the industry has been lax in enforcing even the most basic restrictions on RF licensing. Without more vigilant compliance efforts, this widespread misperception is reinforced and further fuels image theft. While greater forces are at work perpetuating a “culture of free”, the lack of respect for intellectual property has contributed both to the loss of potential licensing revenue and the devaluation of professional photography.
Amateurs
In early 2006, contributing editor at Wired, Jeff Howe, interviewed me for an article on a rising phenomenon about “how the power of the many can be leveraged to accomplish feats that were once the responsibility of a specialised few.” He coined the phrase “crowdsourcing” and cited microstock photography as a prime example.
The concept of a file-sharing service with micro-pricing was developed by an entrepreneur who recognised that digital photography and online file-sharing and selling platforms had broken down the walls between users and creators. With it came the harsh recognition for picture libraries and professional photographers that they were no longer indispensable for creating and licensing images. As Howe foretold, “pain and disruption are inevitable” and it was perhaps most painful of all in the professional photography market.
The accessibility of digital cameras, coupled with the development of internet file-sharing platforms, led to hobbyists and aspiring photographers worldwide getting involved in image licensing. The pool of potential creators is ever expanding, along with a rapidly growing body of images searchable through file-sharing and microstock sites. For the microstock community, there was a rush of power at the democratisation of the stock industry. The amateur was unencumbered by the expectations and obstacles faced by professionals – working with minimal gear, mostly on a part-time basis with no history or expectations of return for their investment, any use of their images at any fee was a win. A key to motivating contributors was an engaged and enthusiastic microstock community, which celebrated the success of the model, and the rise of its micro superstars.
The “coming-of-age” moment for microstock photographers arrived when the market leader announced a dramatic reduction in contributor revenue sharing, with the ironic flourish of citing “the success of the model” as the reason for the changes. Thousands of contributors felt betrayed, flooding the contributor forum with expletives and threats. It was a wake-up call that the party was over, and that they are just as vulnerable to the desire of the distributors to increase profits at their expense.
Blame game
Despite proof to the contrary, some full-time professionals still believe they are entitled to be primary image providers. It is time to stop the blame game and re-focus on the challenge – how to earn a living by making pictures. Photographers can no longer afford to hang out a shingle with the moniker “good photography at a reasonable price”. The differentiators for success are as follows: highly distinctive imagery reflecting a clear and compelling aesthetic vision, marketing savvy, sharp business skills, adaptability and persistence. Today’s professional photographer must deliver nothing less. BJP
Comments
Fantastic piece on the damage stock libraries are causing in undercuting each other and degrading the value of commercial imaging.
I wrote a small blog peice along the same lines too with a possible solution?:
http://www.callumw.com/blog/photographic-mission-statement/
One thing I would say is missing from the article is expanding 'crowdsourcing' which is commonly used by the BBC and other major corporations such as RedBull.
I see that it does have a huge value in reporting news and information to the public, but the creator should also receive some financial reward and not lose all their licensing rights by submitting to any place which in turn makes a commercial (or other) profit in return.
C.
Great and thorough article. I particularly like that last paragraph...and photographers need to prepare themselves for continuing change...and I believe the best way to do that is to continue to hone their web presence.
Thanks!
John
You did an excellent job of giving a good timeline and historical moments when changes were happening in the industry. Most of all I think your last paragraph telling us where we are is dead on.
You did an excellent job of giving a good timeline and historical moments when changes were happening in the industry. Most of all I think your last paragraph telling us where we are is dead on.
If large stock distributors ran retail outlets they would be bankrupt!
Betsy's article is right on.
An added comment. I had the opportunity to examine some 70 of my licenses from a "distributor". 15% were in use in violation of the license. Either "on line", when not paid for and clearly marked as such. In use years past the agreed to term, or other issues.
Imagine a retail store with a 15% shoplifting problem?
How does my distributor react? I must now obtain a court order to view my licenses.
All this and my search of pirated images is consistent with SAA's survey. That for each licensed image, one could expect 10 pirated with no record of a license.
A great article indeed, which manages to tell the story in detail without ever mentioning the name of the elephant in the room that has led the headlong decline every step of the way.
re: the last paragraph. In 1999 while presenting a "unique" mid-century British collection to the American market; the uninspired corporate moniker provided was
"Wonder photography at affordable prices".
They were wonderful but very few agreed with the latter part of the statement, as alternatives were plentiful.
This is the best article I have read on the rise and fall of the stock photography industry. It is sad that it has come to this and many talented photographers are no longer able to earn a living by their craft.
"As long as we keep agreeing to worse terms, the terms will keep getting worse".
"The differentiators for success are as follows: highly distinctive imagery reflecting a clear and compelling aesthetic vision, marketing savvy, sharp business skills, adaptability and persistence. Today’s professional photographer must deliver nothing less."
Even then, most image makers in this oversupplied marketplace will still lose, possibly after investing a decade or more of time and six figures of capital. In all areas of image making, not just stock, return on investment is very poor and opportunity costs are high.
Ms. Reid left out the name of that company: Getty Images.
When Getty Images & Corbis went on a shopping spree and bought up 95% of the competition it left a huge vacuum in the marketplace. As digital capture developed that hole was filed with microstock distributors, which helped bury the entire industry, (not just stock) through oversupply and devaluation of imagery.
There are countless other unscrupulous practices Getty Images used from 1999 - 2011 not mentioned here which have also hurt image makers and the industry as a whole. Photographers themselves have helped shoot each other in the foot too. SAA was born out of a particularly nasty contract Getty Images issued in 2000. 600 or so Getty Images photographers all pooled together ($250K+ ) hiring an IP attorney to fight the contract. These photographers represented an estimated 70% of Getty's image collection at the time. Eventually the group caved in to Getty's contract - instead of walking away. It has been uphill ever since.
Of particular note is the actions of one of the founding members of the SAA. This person had a sizable collection of images available Royalty Free (RF) through Getty Images, as well as images in RM. Apparently his (RF) return was in the six figures. He continued offering his RF collection for sale before Getty's heinous contract, during negotiations, and through the inception and operation of SAA. While SAA took a public stance against the RF model of image licensing, this founder continued to use the RF model for his own short term gain. The income from RF at that time was often much better than microstock today.
There is a saying: "As long as we keep agreeing to worse terms, the terms will keep getting worse".
The next-to-last sentence in Betsy's superb article has become my mantra. Wisdom in a nutshell for today's practicing photographer. I repeat it to myself regularly as I refine my portfolio for online display.
A little more on the elephant... while Getty was putting out bad contracts, a guy named Bruce Livingstone decided he wanted to break into the stock photo industry and saw he was unable to compete on a level playing field. So he started a free image sharing site and when the library was large enough started charging the microstock fees and iStock photo was born. I feel quite sure Livingstone knew full well that the business model was cannibalistic and would consume itself... and like a cancer, consume its host in short order. And he sold it to Getty for a cool $50 million. Quite a chunk of change to be paid to someone whose claim to fame is the destruction of an entire industry. While getty had it in its power to improve the situation, they chose instead to worsen it by moving licensing fees at Getty toward the bargain basement at iStock and iStock is the one that upset the microstockers by cutting an insanely low royalty percentage even lower.
Today's stock photo industry has made it clear they do not value the photographers who supply the product they market... and the better photographers, including some of the microstock heavy hitters, are moving away from all stock photo agencies and beginning to directly license their work.
I believe even the amateur photographers are looking at the cards on the table and saying "this is nuts." as I am starting to see ads popping up on the net where the microstock agencies are advertising to get more photographers to contribute. That an industry that had to once turn away most of the photographers who wanted in now has to advertise for photographers tells me that more photographers are seeing it for the bad deal that it is and saying "no".
But until the stock photo agencies realize they have a responsibility to protect the value of the product they license and the earning power of the photographers who create it, we are all better off moving to direct licensing of our work.
just employ a hacker, or invite people to pay to submit work that might get them picked in a competition, or for an agency. With small print that says they agree to ANYTHING: even the Beeb does it.
In the good old days you had your negs and trannies at home and took a folio of prints
You did not send jpegs using the internet: jpegs did not exist, and neither did the internet.
the Web is well-named, and best avoided if you want your work to be under your control, and not the Web's...
the even bigger elephant in the room
both the article and the comments to date fail to recognize the actual root cause - capitalism. when profit is all that matters, and it's the system you subscribe to, you cannot possibly decry the getty's or the livingstone's. indeed they made fantastic "business decisions" and should thus be heralded as champions. welcome to the race to the bottom.
Google Inc believes that any image they can access online is theirs to use in image search engines. Honorable Jimm Larry Hendren ruled that moral copyrites do not exist for online photography in
Neeley v NameMedia Inc et al, (5:09-cv-05151) Docket 267
Google Inc believes that any image they can access online is theirs to use in image search engines. Honorable Jimm Larry Hendren ruled that moral copyrites do not exist for online photography in
Neeley v NameMedia Inc et al, (5:09-cv-05151) Docket 267
One of the best articles I've read on the business of photography. In the end she states the eternal verities of all professional artists:
…highly distinctive imagery reflecting a clear and compelling aesthetic vision, marketing savvy, sharp business skills, adaptability and persistence.
So what has changed?
Great article on the obvious terrible havoc wreaked on the livelihoods of professional photographers by the evolution and devolution of the stock photo industry. This is a story that so many of us long-time professionals are more than familiar with.
However, there is another story, little told, that falls along the same lines, but has been extremely neglected in the photo press. As if the stock photo assault was not enough to impoverish us, in the last 10 years or so, a new development has come to haunt product shooters, who heretofore had not been as much affected by stock as some other photo specialists. Single frame 3-D rendering, somehow always and erroneoulsy referred to as CGI (computer generated imagery, actually a much larger category, after all), is eating up the market share of product photographers at a prodigious rate. Starting in the mid 1990's, it became apparent to those who were "clued-in" that the design and manufacturing process that was becoming de rigueur in most industries strongly suggested a new way for corporations and their agencies to market their products. They had to create 3-D model files of their products at both the design and manufacturing stages in product development, so they already posessed, at no further cost, the raw material from which to render any sort of view with any sort of lighting or background they wished, of any of their new products. At first the render engines of their applications were fairly poor at true "photo quality" rendering, but they slowly improved and other third party renderers, both real-time and especially those which required some longer time to render, accelerated the process. In the last several years, the look of top end renders is so good that even some expert photographers would be hard pressed to tell the difference between them and a true photo. Now, manufacturers, especially in the auto industry, routinely use 3-D renders in place of photos in their catalogues and advertisements. This process will only accelerate and spread to industry after industry until even product images made with photo cameras will be a minority option for users.
The question of whether or not clients are better served by this trend, and if they really save much or any money at all by doing this, has not been very well examined as yet and may eventually moderate, or even push backwards against this trend. But for now, the die seems to be cast, and we photographers again seem to be the losers.
The moral to the story is that our industry, like all others, is not immune to the same pressures of cost-cutting, novelty and the march of technical progress that has affected every other one, except for, possibly, lawyers and the government, where they have excepted themselves by fiat.
There's no room for privilege and unearned respect in any market. Whilst contravening licensing cannot be tolerated, the move to a more open image distribution sharing platform ultimately brings more choice at a lower cost. This happens in every free market eventually. Why should imagery be any different. These things generally come ful circle at some point. When the quality of images falls sufficiently, it will once again be time for the talented professional to step in at the top and produce commissioned work to order for the discerning client.
For anyone with training and proven ability thinking of getting into the stock photo market, It just doesn't seem to make sense at the moment. But can it ever improve? It is easy to put prices down, but quite another to try to raise them again. I suspect that in my lifetime the golden age of stock photography is nothing more than a memory.
When photography historians in the next century write about the Rise & Fall of “Single Photography Produced on Celluloid ” they will remark that a democratized free market system deflated both photographers and their stock photography commodity. Wal-Mart photos are now common, and microstock fits the bill. The glory days for individual stock photographers will return when advanced Internet technology will smoothly make the match between the photography category of specialized stock photographers and the abundant theme buyers in the future market place. -RE
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