Over the past couple of years, we have complained a lot about agencies cutting the percentages they pay out to photographers. Every time it happened. And we were right to do so. Or not?
Went back in time, ended up in the present
I have been doing some research on the stock photography market on a bigger, global scale. Not only microstock or the big places we all know. I ran across a study prepared by a German university, sponsored by CEPIC and PACA, the two major industry organizations. Several hundred of agencies across the globe delivered data to be analyzed, most of them most likely none of us would ever have heard of. There is still a large number of small companies working in this field, just like it was before 1995 when the internet grew large and Getty Images was founded.
While the report also gives some other interesting insights (which I will talk about in a separate article), it reminded me of how the “classic” model of the stock photo agency business looked like – and apparently still is in parts of the industry: While the business models of “classic” agencies is to collect images from photographers and distribute them to clients, a large part of the market is to exchange images between agencies. And there are quite a few agencies specialized in either the “collectors” (receiving images from photographers) or the “distributor” (selling images to buyers) role. Westend61, the German macrostock agency I am working with, clearly fits the “collector” description: I deal with their editing team, they do the keywording for my images but once online and distributed my images can be found on agencies like F1Online in Germany, Waldhäusl in Austria, ImageSelect in The Netherlands or AgeFotostock with offices in Spain, New York and Paris. And my images go to Corbis and Getty as well, of course.
Some of those agencies are “distributors”, making more revenue from images they source from other agencies. And some a “classics”, serving both ends of the market. In the past, before internet made the exchange of images so much easier, the work sharing between agencies was more common apparently and for obvious reasons: An agency in Germany could hardly reach clients in the UK, so they sent copies of their images to a partner. Most likely this worked both ways, so both partners could offer a better selection to clients.
But how about the revenue? In those deals, it is quite common that the selling agency keeps half of the revenue. And what is being sent back to the collecting agency, gets split with the photographer. So in many cases, the photographer received 50% of 50%, in effect 25% of the price the image was sold at. Only when the “home” agency sold an image, the photographer got more. Getty Images themselves used this as a basis to attract photographers: For some time, you would get a bonus for images sold in your “home territory” which could be all of Europe.
Did the share in royalties paid to photographers drop that far?
It might be speculative but considering that quite some agencies were strong in sourcing images but not strong in selling, I assume the percentage of higher revenue shares for the photographer was pretty low. So most likely on average, the photographer would get a net of maybe 30% of the price the customer paid for the use.
As you can see, complaining today about the “extremely low” percentages some agencies are offering might be going a bit too far. There was a short period in time (and there are still places) that offered a share of 50% because the agency might have thought that added efficiency through technology allowed them to work with less of the revenue but still serve both ends, buyers and photographers.
However, I believe marketing is a very expensive task: Finding, building and keeping a client base does not come for free. Either it is classic marketing with advertising or it needs investments in technology and smart heads to optimize the websites, come up with the best images for the clients needs and pushing your agency to the top of the search engines. I doubt all of this takes less cost and effort than printing ads in magazines (which even internet based agencies still have to do to succeed).
So anything in the range of 25-30% of license fees paid back to photographers can not be considered unfair in the end. At least not in historic context. And we shouldn’t forget, our percentages are usually based on the effective sales price for our images.
Obviously, there still is the one big case where photographers might be paid only 15 or (in my case) 17% of the revenue. Well, this is a special case – because others at the same places are receiving 35 or 40% in exchange, far above the numbers mentioned above. You can still complain about the low percentage we get but on average I believe the percentage of revenue paid back to photographers isn’t far below what other agencies are paying. It’s just that non-exclusives are subsidizing the “overly expensive” exclusive content. Fair or not is a matter of perspective. We shouldn’t judge our colleagues on either side of the fence. We all are able to make our own decisions based on how the situation his.
So, to summarize: Today’s share in royalties we receive is in most cases not below what was the common case for many years in the past. We can’t complain too much about it. As long as the agency does a good job in using its part of the revenue to promote and sell my images, I feel getting 25-30% of the license fees is not too unfair. Quite certainly I’d rather keep 30% of what a top selling agency makes with my images rather than a 50% share of an agency struggling to find clients.