What if this new strategy is going to be successful?
If iStockphoto (or Getty Images) would be able to totally take over the market from their competitors, it will end up with doubling their revenue. It would not happen over night but it might happen over the course of the next two or three years. Be aware that this is only an assumption how it could work, not my belief how it will work.
In this scenario let us assume, iStockphoto would be able to about double their revenue within the next three years. This is about the best that could happen for anyone involved with iStockphoto, including all exclusive contributors. If you are an exclusive contributor it means the overall revenue generated by the whole imagery available at iStock/Thinkstock would double. Let us also assume that the percentage of royalties being paid out will stay unchanged. Or would you believe the percentage will grow? I do not think this as a realistic option, so let me drop this right away. So we can estimate that the amount of royalties being paid out in this best case scenario will be doubling in the same timeframe.
But it does not mean our royalties will be doubling. Because the strategy lined out also involves a massive growth in collection size, with a heavy part coming from sources that hold a large amount of images – first of all the wholly owned content, partner agencies with hundreds of thousands of images, large contributors and stock production companies. All of those are so much easier to deal with than thousands of the classic, small iStock contributors who are mostly thinking in artistical and quality terms rather than putting revenue, earnings, money first.
Also, dropping basically all technical requirements for submissions will allow a lot more non-exclusive content into the library that is already available at other low-end agencies like 123RF and Depositphotos. As the sample on the first page shows, there are contributors holding thousands of files who would not have qualified for uploading at iStockphoto in the past.
The massive growth of the collection size will dillute everybody’s earnings further. This has been a global trend for a long time and it can only be overcome when the total revenue is growing faster than the library. At the current stage, iStockphoto has about 14 million files – far below Shutterstock claiming to have 25 million files and similar agencies. But the massive ingestion has just been started as iStock added about 2 million files added in the first half of this year alone, a huge part of that happening in the last two months. Last year, iStock had about 2.5 million files added over a 12 months period, so the growth clearly is speeding up.
At the current speed (2 million files added in six months), iStock’s library would grow from now 14 to about 26 million files within three years. This means almost doubling the content along with doubling the revenue. As a conclusion, the revenue per file would stay the same in this scenario. Now be aware, this is the best case scenario for people deriving all or most of their income from iStockphoto.
What could happen beyond that point?
Let us imagine for a second that the strategy will work out, iStockphoto will double their revenue and totally smash the competition. It will dominate the market and be able to dictate prices. But it will also be able to dictate conditions for suppliers. And Getty Images has a long history reaching back almost two decades of reducing supplier commissions. So what else could you expect to happen if the strategy works.
In the end, you might believe everybody will end up earning 20 per cent of the revenue generated with your images because that appears to be the global line for Getty. Well, think again: This is just today but no one guarantees that this will be the bottom. Writers and musicians are used to rates of 8 or 10 per cent of the revenues generated through their work. Obviously these are consumer markets with far higher efforts in the distribution but also the mass market can make up for the smaller percentages. But do you think anyone would care about these little details when using this as a rational to further reduce payments to photographers? You see the effects of the changes happening with programs like Getty Connect already where the photographer receives an undisclosed ridiculous amount of money for his images to be viewed instead of licensed. Actually the amounts are often too small to even reach one cent which ends up with Getty Images keeping the whole amount.
Well, this is just an assumption and might or might not happen. At some point, also Getty Images will have to consider that it takes dedicated people to create the best content, and it will have to provide enough income to those people one way or the other. Then again, much of the content may be provided from countries with lower costs of living, so the sweet spot of low royalties and providing a living for some people might be lower than people in industrial countries can accept but still good enough for many others. It is just a market rule and a result of globalization and the technologies provided by the internet. Again, we can’t blame business people to make business decisions.
Is it time to give up shooting for (micro)stock?
No. I don’t believe the market is dead nor will be in the near future. I have doubts that things will play out as described above, because there are too many factors involved in this. I believe the market for imagery (maybe motion even more than still imagery) is still in a phase of restructuring that has not ended. We might still see a significant growth in the market itself, the availability of mobile devices, interactive screens on the streets, rich multi media content to be seen everywhere is still growing. So there will still be need for images and people will still be willing to pay for that.
There is also still need for new content as many images are getting outdated very quickly. People sitting behind computers will look “old” very quickly as we are moving to new forms of media consumption. Fashion and hair styles have always changed and will look outdated after a while. New themes, issues, concepts will rise to broad visibility while others will disappear from our minds.
I believe working hard and smart, we can still make good money and this is not going to change. Getty Images and iStockphoto adapting to a new strategy, partly required by the market, partly forced by themselves, is not going to change that. It might only require changes to our own plans. I believe quality content will still be superior to the low-end content that enters the collection right now – the hobbyist images will get their occasional download and might make some people happy like it did make me happy six years ago. But even millions of those will not be serious competition to anyone with the ability to provide quality content. However, also on the quality side of the market, we are seeing more businesses rather than artists entering the market.
Single full-time contributors seem to be able to produce about 2,000 quality images per year. We might see that this will not be sufficient to make a full-time income in the future. Those contributors might be forced to either look to become more efficient – maybe by outsourcing more of their work flows to focus more on shooting – or to go back treating stock as part-time business besides contract work or office jobs. Or we could also see more contributors join forces like it happened with GlobalStock. I think this is not the worst that could happen.
Is it time to go non-exclusive if you want to stay a photographer working on your own?
There is also the ongoing controversy between being an “exclusive contributor” at iStock versus being “independent”, “non-exclusive”, however you might want to call it. You know which road I have taken, you can also follow how well (or not) it works for me. I am not going to say that this is the road everyone should take – as a matter of fact, if you are today making more than $1 for each image in your portfolio per month (e.g. if you have a portfolio of 2,000 images and make more than $2,000 in royalties paid each month) it is highly recommendable at this stage to stay exclusive with iStock/Getty for the time being.
It is very unlikely that you would be able to make a similar amount of money within the microstock field (or stock imagery in general) if you went non-exclusive at this stage. iStockphoto in my opinion is still by far the number 1 market place for images and very likely to stay there at least this year and the next. Even if the very, very ambitious development plans for Shutterstock are going to be reality, they would not catch up with iStock’s revenue in the next 18 months. And as mentioned above, the changes made at iStock recently are aimed to make the gap even bigger again. There is a certain probability that it actually might work, so you will not see higher returns at other agencies in the near future.
However, as I have mentioned often enough, it might be a good time to prepare for alternatives, be it rights managed photography, contract business, becoming partly non-exclusive for secondary media like video or illustrations. No one can rely on one company to supply sufficient and reliable income in the long term, and if my assumptions and conclusions are true, it will become even harder in the future to stay on top of it. If you did not get the messages sent out in the past: iStock is no longer the place for artists to be among themselves, it has become a (big) business. Long time ago. The recent changes are not as dramatic as they might be seen through artistic eyes. Time to put the artistic view aside and get to business for all of us.
Good luck with your efforts. 🙂