Part 1 - Introduction. How to start selling stock photos (microstock)
Part 2 (this page) - Stock photography business
Part 3 - Taking your stock photography to the next level
Part 4 - Selling fine-art prints, self-published books
Part 5 - How to grow your photo business
Stock photography consists of existing photographs that can be licensed for specific uses. Book publishers,
specialty publishers, magazines, advertising agencies, filmmakers, web designers, graphic artists, interior decor firms,
corporate creative groups, and other entities utilize stock photography to fulfill the needs of their creative assignments.
By using stock photography instead of hiring a photographer to perform on location shooting, customers can save valuable
time and stay on budget.
Stock photography is sometimes called a photo archive, or just stock photos. Outside the U.S.A. they are generally referred to as picture libraries.
(Quoted from wikipedia http://en.wikipedia.org/wiki/Stock_photography)
Don't miss the keyword 'licensed' above. Selling stock is not selling photographs. Selling stock is selling the right to use certain photograph in a certain way - e.g. use it in a book not exceeding a certain number of copies; or use it in printed advertising, etc. This approach allows to sell the same picture multiple times to the same or different buyers for different use. There is a big difference between "royalty free" licensing and "rights managed" one. That will be explained later.
Stock photography companies are agencies selling to buyers the photos supplied by photographers and taking part of the price as commission.
Historically photo libraries consisted of slides, negatives and prints physically stored in an archive.
Modern stock photography agencies use digital media more and more often, and that naturally allows them to go
beyond photography by adding video and illustrations to their media collection.
The advantage of stock photography to photographers is that they can make money from the photographs made without an assignment, otherwise collecting dust in a corner. This is interesting both for amateurs who could start getting some compensation for their hobby expenses and for professionals who often have unused pictures at their disposal. Another advantage of stock pictures (same for photographers and illustrators) is that successful pictures will sell again and again over the years unlike an assignment work that is only paid once.
Rights Managed (RM) is often used to describe photographs for which the right to reproduce them are managed,
and thus the individual, organization, or business wishing to use the photograph must first obtain a license
for the use of that image specific to the type of use.
The licenses for RM images priced based upon the extent of the use, and the scope of benefit by the person or company using the image.
The concept of "rights managed" comes from copyright, a statute that allows authors and publishers of works to be the sole arbiter of the exploitation of that work, and to set fees associated with that work. The economic incentives afforded by copyright give artists one way to make a living through their creative works.
An example of how rights managed works benefit you and the image's publisher might be that you simply have a local business' newsletter which is printed monthly, and which prints 400 copies. A fee for this small use might be $100, because the benefit the business receives from the use is small, so the fee is comparable. This same image, used editorially in a national publication, reaching 15 million people might have a fee of between $500 and $1000, for the same image. The concept here is that when the benefit to the organization increases, so too does the fee paid to the publisher. Retrieved from "http://en.wikipedia.org/wiki/Rights_Managed"
Royalty-free describes pictures that may be used for profit, without paying royalties for every use. This does not mean that an image may be used without payment. Royalty-free media is usually acquired for a 'one time only' fee. Usually RF license implies certain limitations, and use beyond that limitions requires purchasing of an additional license.
There are three main types of stock agencies: traditional (that exist for tens years); microstock (that are internet-based
and exist for a few years) and midstock (that is something in between the previous two, and is in the very beginning).
Traditional stock agencies are only focused on work with professional photographers. The biggest and most well-known traditional agencies are not open for any new photographers (this has started to change recently, after microstock business model proved it's success). They have a limited number of professionals working with them and in general they aren't looking to extend that number. Smaller agencies do accept new photographers but not amateurs. Photographer that wants to work with such agency is expected to have a stock portfolio of several thousand pictures; and he/she is asked to present several hundred (sometimes several tens) pictures for entry evaluation. Depending on quality and suitability for that particular stock, photographer application might be accepted or rejected. When photographer is accepted to a traditional stock there is typically no inspection/review of the pictures supplied by that photographer; and there is exlusivity agreement (same images can't be sold via other agencies).
Traditional agencies are focused on wealthy clients and sell pictures for a high price, mainly under "Rights Managed" (RM)
license. The number of sales is relatively low but with the high price even few sales a month provide photographer
with a decent income. The picture that makes 15-20 sales in a few years is considered as extremely successful.
Contrary to traditional stock the microstock agencies open to everyone having a few decent pictures. Most microstock agencies have an entry exam, but the number of pictures you have to supply is low (between 3 and 10), and you have several attempts in case you fail.
Microstock operations are entirely internet-based. Microstock used 'crowdsourcing' supply model. Anybody can upload their pictures via internet; and every single picture is reviewed by an inspector for technical quality and for content. Inspector is a human being, not a computer program. Some agencies hire inspectors from among photographers submitting pictures that stock.
That supply model means that amateurs are as welcome to microstock as professionals if they are capable to produce decent pictures; even if they supply a low number of them. Of course having a limited number of pictures in photographer's portfolio will not generate high income; but it allows amateurs to enter into this business, to generate some supplementary income and to grow further.
Microstock is a typical "long tail" type of business. In any market, most of money come from minor group of customers. This is often refered as '80/20 rule': 80% of money come from 20% of buyers (this number is not precise, it is given just as indication). So while traditional stock agencies focus on 20% wealthy buyers, microstock focuses on the remaining 80%. Despite it is based on only 20% of money it is still large market; and it is mass market. With mass market, cost of production has to be lower; and the margin is also low. Microstock business model fits that market pretty well.
Microstock mainly focuses on "Royalty Free" (RF) type of license, and pictures are sold at a very low prices. They are sometimes refered as "$1 agencies", although $1 price is only applicable for a low-resolution images. The primary market for microstock is small designer companies, generic magazines, creative individuals etc - however this is changing as some bigger clients start to realize that microstock is capable of delivering same quality product as traditional agencies (but with less service).
Author's commission in microstock is very low, but decent income can be generated by multiple sales. While traditional stock picture called a success after several sales, successful microstock pictures sells hundreds and even thousands times. Microstock today is a multi-million business.
You will find more detailed comparison of traditional and micro stock below.
While stock photography is divided mainly between traditional and micro agencies, there is a new flavor of stock called "midstock". Pricewise midstock lays between traditional and micro, and it isn't independant trend - quite possibly it's a future of microstock. Midstock will be discussed in more details later, in the section about microstock evolution.
'Cost saving' is the main business term in the last 10 years. In any business, in any industry cost saving is considered as the key
to success. Cost saving means lower cost of research and development; and it means lower cost of production. In return it very
often means lower quality products - but for a lower price.
On the other hand, the way today's consumer business operates is to sell the items again and again. If your car works fine for 20 years why would you buy a new one every 3 year? Because of marketing efforts. It is not modern, it doesn't have the features the newer model has, it is not as environment friendly as the newer one, etc., etc., etc. Huge efforts made constantly to force consumer to buy the new things - again and again.
So, if consumer will buy a new TV set every 3-5 years, why would electronic companies make the TVs that work fine for 15 years? They could save costs and make a new 'improved' model every other year, that will only last a few years.
There is certain similarity with today's mass culture and visual arts. Digital photography is now a commodity. Personal computers and internet is also a commodity. Millions of people produce digital content such as photoalbums; blogs; online magazines and such; and they actively share the content with each other. While most of the content doesn't have a professional quality, it is sufficient to be interesting for others.
Quite logically this has an impact on professional publishing. Amateur-quality pictures in paper magazines are now easily accepted by the mass public. So why would magazines pay a high price for a professional picture if they can satisfy their consumers with a cheaper product?
Microstock perfectly fits in this trend. While the quality of pictures is often high, the low price and inconsistency in style corresponds the trend.
Still there are some consumers that don't want a cheap low-quality product. They are willing to pay a premium price but they want a premium product. Sometimes it's the same consumer selecting low-price products most of the time, but willing good quality in certain areas. For example, many people would agree to pay a decent price for pharmaceuticals provided it is of a good quality. Getting back to photographs, let's extend the example with magazines. While many readers will accept an amateur-quality picture as a generic illustration to an article, the same people will not accept a parfume advertising in the same magazine being amateur.
Some long-time-professionals complain that microstock harms their business. I don't think microstock is really guilty - microstock is just an answer in current business trends. And even if the trends are harmful for traditional professional phorotography, the need in premium product will still exist and the best professionals will always have a job. Others will need to learn tow to succeed with the new business model.
Microstock (or Micro Stock) photography is an offshoot of traditional
(macro) stock photography. What defines a company as a microstock
photography company is that they (1) source their images almost
exclusively via the Internet, (2) do so from a wider range of
photographers than the traditional stock agencies (including a
willingness to accept images from "amateurs" and hobbyists), and (3)
sell their images at a very low rate (anywhere from $.20 - $10) for a
royalty-free image. (Quoted from http://en.wikipedia.org/wiki/Microstock_photography)
Unlike microstock, the value of individual image sale in traditional agencies vary from several tens dollars to several hundred - however direct comparison isn't valid because of the different license types. This will be discussed in more details later.
Another difference between traditional and microstock is provided service. Microstock buyers have to search the images themselves on microstock sites using search engine. Buyers of traditional stocks usually talk to the agents who help them to find what they need.
Microstock is very inconsistent in style. Traditional stock often offer "collections" of pictures made in one style.
There is a difference in service for photographers. One limitation of microstock for professionals is crowdsourcing supply model, i.e. that photographers have to spend their own time uploading pictures, assigning correct keywords, categories, model releases. Typically, the traditional agencies used to take this load off the photographer. I have heard however that there is a trend now to start shifting the effort towards photographer, just like microstock is doing that. It is just in line with the cost saving discussed above.
While traditional stock photography market exists for several decades, the microstock business model is tightly linked with the internet and achieved significant volume within the last 4-5 years. While it is already a multi-million business, it is not truly mature yet. It continues growing, changing and evolving fast.
The fact that microstock agencies sell pictures for very low price have caused many hot discussions a couple years ago. Many photographers attacked microstock claiming it devalues their work and harms their business. However this is not completely true. Let's compare traditional stocks with microstock side by side, talking about the price; value of photographer's work; and impact on photo business.
Direct comparison of prices isn't valid: majority of traditional stock
sales is made under Rights Managed (RM) license giving certain
rights to the buyer and restricting the rights of other potential
buyers. Often usage rights are sold exclusively to one buyer (typically
for a limited period of time). Indeed that way of selling means that a
high price will be paid for the image (typically several hundred
dollars). Unlike traditional RM license the microstock companies sell
images under Royalty Free (RF) license. RF license allows the same image
to be sold to multiple buyers at the same time; and the same image may
be sold by several microstock companies at the same time. This means
that the income from one picture in one year sold via RM license could
be the same as the income from multiple sales of the picture under RF
license even the price of one RF sale is low.
While focusing on the RM license, the traditional agencies sell under RF license too. Typical price of such sale varies from several tens dollars to a few hundred. However the terms of the traditional RF license aren't the same as the standard microstock RF license so direct comparison is still not valid. The standard microstock RF license restricts the possible usage of the image (e.g. number of copies; usage in internet; usage on mugs and t-shirts may be restricted, etc.) while traditional RF license has fewer limitations. The microstock companies have introduced "extended RF license" that allows wider use of sold pictures. The extended license is similar to traditional RF license; and the price of extended microstock RF license is about several tens dollars i.e. comparable with traditional stocks.
I am not running any stock agency on myself, neither I am a market analyst. Thus I am not in a position to
make a comprehensive analysis. This said I do have a couple of comments.
Of course microstock does and will have an impact on photo business. It is a new business model and it works. When the traditional stock agencies started to grow two-three decades ago it did have impact on the assignment work. At the times of overall economy decline many companies shrinked their photo budgets and started looking for a cheaper alternative to assignment photography. However this didn't kill the assignment photography business. When fast-food restaurants appeared they did have an impact on restaurant business, but the expensive restaurants continue to succeed.
The primary market niche of the microstock is not the same as of the traditional stock. Remember the "long-tail" business type I have described above. The microstock is targeted primarily at low-end buyers - small design companies, corporate media etc. There is an overlap and some big buyers source from microstock too, especially it's now again the time of overall economy decline. However I am not sure that microstock will ever completely replace the traditional stock - and even if it will, by then it will become very different from today's microstock.
Microstock is a relatively new business model that has already proved to be successful. I don't believe that ignoring or boycotting microstock (as some people do) makes any sense. The value of microstock is recognized by some long-time professional photographers who come into play, and by traditional stock business. The microstock industry leader iStockphoto was purchased for $50 million in 2006 by Getty Images – the traditional stock photography leader. Another microstock company Stockxpert was purchased by Jupiter media (which in a turn was recently purchased by Getty). Corbis has established it's own microstock snapvillage that is being now migrated to Veer Marketplace.
Professional photographer and photo industry analyst Dan Heller has written an interesting article about microstock and his view on why microstock doesn't really hurt the industry: The myth that microstock agencies hurt stock photo pricing
Since the invention of the computer and desktop publishing, the role of visual messages in the communication process is expanding. It means a growing need in pictures on the market. Also, the designers using the stock images say that every next time they work on the same subject they are looking for new images – i.e. there is not only constantly growing need in pictures; but there is constant need in new pictures.
It means that whatever business model(s) will succeed, the business of photography will exist. Evolution is inevitable, but the business is not going to disappear.
Microstock agencies are very attractive for hobbyist and novice professional photographers because they keep their doors open
for everybody who's capable to produce good quality pictures. Doesn't matter how few or how many as long as they meet the requirements.
The leaders of traditional stock industry (such as Getty or Corbis) basically have their doors shut. They work with a limited number of photographers and they are not interested to increase the number of their contributors. They might occasionally accept an exceptionally hight caliber professional who has a stock of thousands pictures, but that happens rarely.
Typically, traditional agencies look for consistent style. Sometimes they buy entire collection on a certain subject and/or in certain style. Keeping number of contributing photographers low also helps to keep the contistency in photographic styles.
The smaller traditional stock agencies do accept new contributors, but they are still very selective. Typically, their "information for photographers" page states that "if you are interested to cooperate, submit 300-500 pictures from your portfolio for our consideration" and they assume that photographer's portfolio is measured in thousand pictures. Indeed these agencies are also interested to keep cosnistency in style.
That means that photography amateurs or beginning professionals don't have a chance to get to any of traditional stocks.
There are no rules without exceptions. Alamy is stock agency that uses microstock supply model but traditional stock sale model and pricing. You will find more details about Alamy in the next part of the article.
Contrary to traditional stock, microstock welcomes everybody. Some of microstock doesn't have any entry exam so you can start submitting from as little as one single picture. The others ask 3 to 5 pictures (10 for Shutterstock) for an entry exam, and after you proved you are capable to supply quality images you can add as little as one picture a time. That is obviously an open invitation for all kind of hobbyist photographers and for pro-s that don't have a large portfolio. The same time it doesn't really stop the well established professionals to supply their larger portfolio and to compete with the amateurs (that some professionals are actually doing these days).
I think it's worth to stress already at this point that technical requirements in microstock are extremely high. In my experience they're even higher than with traditional stock. Yes amateurs are welcome even with very few pictures, but they must be very good pictures (at least technically). Family-type snapshots made with a compact camera will not be accepted in microstock.
To give you more practical example, I was a photography amateur for more than 20 years. After working with microstocks for 1 year I learned more about the technical part of photography than I learned in the previous 20 years. Thanks to microstock the technical quality of my pictures has grown enormously, and I realize now how many mistakes I made before.
I am stressing the word "technical" quality because microstock will not teach you the aesthetical aspect of photography beyond a basic minimum. If you are interested to learn that further and to grow as an artist you need to look elsewhere. I will speak more about that in part 4 of this article.
Realizing that somebody needs your photographs and wants to pay for them is a very strong motivation for amateur photographers.
When typical amateurs receive some appreciation of their work from family/friends; or even from an online community of other amateurs, this has limited value. When an amateur sees that his/her work is purchased - even for $1 - they feel excited. For most people this is a serious proof of their proficiency as photographers.
Further sales help keeping the motivation and support photographer's desire to learn more and to grow as an artist. Although microstock business is very young there are already people who have grown to full-time professional photographers from starting as photo amateurs selling via microstock.
The subject of personal development and professional growth will be discussed the next part.
Last update: May, 2011