Creating Stock is Easier than Selling Stock
Posted by Lee TorrensWe often hear photographers complain that the only people making any money in the stock photography business are the agencies. Or variations of the theme. Personally, I don’t understand the complaint. To me it makes total sense that agencies are more profitable than photographers.
Look at the three parts of the stock photography business.
1. Creating Stock Photos
Digital photography and Internet distribution have made creating stock photos easier and cheaper than ever. These technologies have broken down the barriers, opening the market to photographers of all levels from all around the world. iStockphoto reports over 60,000 contributing photographers and Shutterstock’s website currently reports over 170,000 photographers.
This army of photographers creates a lot of photos. The bigger microstock agencies take submission of around 400,000 each month, approving 200,000 – 300,000 for addition to the portfolio.
Lots of photographers are creating lots of stock photos. The quantity of supply is a reflection of the difficulty level relative to the other parts of the business.
2. The Technology to Sell Photos Online
This part is getting easier and cheaper thanks to software advances and new cloud technology. Various providers now enable photographers to quickly and easily start selling photos online via their own website for less than $100 per month. Agencies need to build a system themselves, which is also getting easier, but still a significant investment.
The technology aspect of the stock photography business is not a significant barrier for individual photographers, but very much so for stock photo agencies.
3. Attracting and Retaining Photo Buyers
This is the most difficult part. For both individual photographers selling photos directly and a new agency building a buyer base, it’s difficult to attract and retain buyers. They must make buyers aware of the service, develop enough trust for them to transact, and leave them pleased with the value and service. Most stock photo buyers know that they have lots of options for fulfilling their photo needs in today’s market, so they have high and rising expectations.
For a photographer to sell photos at a high volume and/or price via their own website is not easy. There are many great services which help, but it’s difficult for a photographer to compete with agencies unless they specialize in an uncommon subject or are an in-demand brand. That’s not to say that it’s impossible. Some photographers do it very successfully. However, it takes a lot of time or a lot of business skills, both of which mean time away from the camera.
It’s not easy for agencies to achieve a high sales volume either. The evidence is the high failure rate of agencies at all levels of the market. The few that succeed do so by fulfilling the two most difficult of the three parts. They build the technology and deliver photo buyers. We photographers do the relatively easy part – supplying the stock photos – and so we take the smallest portion of the reward.
We All Choose
As stock photographers, we all choose whether to have agencies represent our photos or not. With so many options for selling photos, nobody is forced to use an agency.
Successful agencies have, by the definition of ’success’, built up a large buyer base. If it were easy to do, then there would be more agencies and more photographers would sell photos directly via their own websites. As it is, it’s very difficult to do, requires a lot of investment, and carries a large element of risk.
When we choose to send our images to an agency, we’re effectively renting access to the buyer base that they’ve built. We enjoy the luxury of not having done the hard work to build the buyer base, not having invested our own time and money, and not having undertaken the risk to build it.
Reward follows value. There are 60,000 or 170,000 photographers creating stock photos, but only a handful of successful agencies. Creating a successful agency requires many times more energy than creating successful stock photos, so agencies get more reward.
An Alternate Perspective
If you’re frustrated with your agency and think they’re not delivering value, try an alternate perspective: You’re a photographer and the part you do well is creating stock photos. But that isn’t enough. You need the technology part and the access to buyers part in order to get money into your pocket. You have choices about who you hire to do this. There are services which only help you with the technology for $100 a month. Some of them will help you attract buyers too, maybe for a little extra. Or, you can send your photos to an agency who manage all the technology for you and give you access to their massive buyer base. They won’t even charge you an upfront fee. You just have to pay them 30 – 80% of your sales. It’s your choice.
From this perspective you can see why a successful agency charges you 80% for access to their buyer base and an unproven agency only charges 30%.
What do You Think?
Do you think photographers have valid complaints about agencies? Does this perspective clarify why successful agencies have so much market power?
Posted June 29th, 2009 by Lee Torrens
Hello Lee,
Another great article, this time with a great photo
Thanks for choosing my image, i hope that will drive more buyers to my gallery.
Hi Helder, yes, a great image. Perfect for illustrating the concept behind this article. Thankyou.
I don’t think it will drive more buyers to your gallery given I write for photographers, not buyers. But you got the license fee
Oh … maybe you can start writing some articles for buyers
… i promise i still come here to read’it 
I am quite new to stock photography but i have nothing to complain about agencies, like you just said there are agencies that need to improve but that take a lot of effort and it is difficult, after that those will pay less to photographers but that is going to be worth in the way that now they don’t sell even a buck..!
I will in July make a big effort to create more “stocky” photos in order to have more earnings and more consistence.. your posts keep me motivated and i see the light in the end of the tunnel..!
thanks and very nice post like always..!
Great way of putting across a simple message, Lee. I agree with you and am grateful for every cent i get from microstock as i certainly couldnt afford to set up my own agency and advertise it well enough.
Its one thing having a decent website (which i think mine isnt too bad) but marketing it has gotta be tough!
Steven.
As usual, very interesting analysis
Well I can’t imagine under any circumstance giving up 80% of my $ to anyone! I sell through a site that takes between 10-20% of my price (where I am able to set my own price) depending on whether an affiliate link was used to find me. I am very happy with my sales at this site and do not agree that because there is a lower commission to them that the site is unproven as they’ve been around for a while.
But I do have a question regarding finding new and additional buyers. Up to now, I’ve left it to the agency to find and bring buyers to me, but I’d like to become a little more proactive and go out and market myself. Do you have suggestions for stock photograhers when it comes to finding buyers? For instance, if I shoot a certain topic, say Desert Southwest plant and there is a magazien that covers that type of niche, who at the magazine (as in what is the title for this sort of position) should I be contacting with my info?
I look forward to hearing ideas!
Thank you!
Hi Tracy, yes, that’s the benefit of having choice. If you’re not interested in paying 80%, you can choose another site with a lower commission or do it yourself as you’re suggesting.
I’m not well informed about selling stock photos directly to magazines, but I’d imagine the title of the appropriate person would change from magazine to magazine. You may find it easier to just ask for the person responsible for obtaining images on behalf of the magazine.
I don’t have any general advice for photographers looking for buyers either. I use agencies exclusively. In my view they do a great job of finding these buyers and selling them my images, so I’m happy to pay them 80% so I can concentrate on making more stock photos (in theory – in reality I’m spending the time doing other things like blogging!).
-Lee
Tracy,
Could you share a little more about how you do that / which site etc?
As far as promoting your work then try flickr (but you have to take part in groups and comment, don’t just upload photos) and then there is blogging, or even just making useful comments in forums is good.
Getting published in magazines, from what I learnt on a travel writing course it’s the words they are looking for and if you can supply the photos then that’s a bonus you will earn a little more for. Magazine editors are looking for content they can use right away – they are busy people. Your right in saying there is a ‘format’ for submissions, contact the magazine first and ask for their “writer’s guidelines” and while on the phone try to find who to address submissions to and if they are looking for something specific at the moment – otherwise you are sending and ‘unsolicited submission’. You can only send an article to one magazine at once then follow up to see if they accept it, if not you submit to the next. covering letter should say you want to be paid at the ’standard rate’ otherwise you are sending an article in for free!
Great post Lee. I like the notion of ‘renting buyers’ – very helpful way to look at the situation.
The article opens a topic that I’m sure many have considered.
I don’t have a problem with an agency such as iStockPhoto taking 80%; I get better returns from iStockPhoto and Shutterstock than all others microstock agencies combined.
There’s a parallel to the fine art market, where 50% is the most common split ratio with galleries. A lot of my wife’s artwork is in the multi-thousand dollar range, and you might say it’s robbery until you factor in the costs of booth fees, insurance, etc. (not to mention time away from the studio) to do public art shows. Promotion can be another full time job, too.
Yes, photo agencies make a profit, which, if they weren’t interested in, your photos might not have much of a market to sell in, either.
That said, I’d love to hear from anyone who’s opened their own direct gallery, to see if the $100/month (plus time) hurdle is worth attempting.
Great article. I think using an agency is like using good gear and software such as Lightroom which cut down on post production time. I can’t imagine taking on the task of website creation and maintenance along with marketing and all that. I’d rather be out doing what I love; taking pictures.
This is one model that has been copied time after time, the agencies now have to take bigger cuts by reducing the artist share, we have one file if we want to submit it to 10 different sites, it has to be uploaded 10 times, inspected 10 times, stored 10 times then we have to go and ajust the data and submit it 10 times.
The websites need to get together and have a system where the metadata is standard, the artist uploads once with a template to their own cloud webspace which they pay for, the websites bots then crawl and retreive the metadata, the stock sites then request the images they need by keyword search from the different artists without them having to upload again.
But uploading to the stock sites is free?, that is part a false statement, if you never have a sale then it is free, but the artists that are getting sales are paying for the inspection of all the rejected and uploaded assets that will never sell, as the number of sites grow and take a slice of the pie, the artist will suffer.
But then some are happy with the revenue, but they could be a lot happier
David (just my perspective)
Hi David, contributing is free, but you pay to license an image. It’s valid that the agency might be able to pay photographers more if they didn’t have to inspect all submitted images, but you could say that of any of the many costs in running a microstock agency.
Lee, thanks for taking the time to reply.
But is it not simple economics, the higher the rejection rates the higher the costs of each accepted asset, the lower the net revenue for running the business and payment of commission.
All the time artists are uploading in droves the stocksites are focused on making the buyers experience better, established websites could look at the faults in the existing model and make it fairer for the artists.
http://tinyurl.com/l67bpg
David
So you’re suggesting microstock agencies charge contributors for rejected submissions to make themselves more profitable and then pass on the extra profit via increased commissions? You could make a very long list of cost-cutting changes agencies could make, but why would they pass on the profits to us? It doesn’t increase the value of the photos we provide. Upload limits achieve a similar objective without the complication of having to charge contributors.
Also, this is just my view, but I think you weaken your argument any time you use the word “fair”. It’s a capitalist market so the forces of supply and demand are what determine reward. If you want to earn more money, do more of what is in high demand and low supply. Stock photos are in high supply and successful agencies are in low supply. Reward follows value. ‘Fair’ always reminds me a children’s playground. I don’t agree with your view of the market at all, but I think you would strengthen your argument by using ideas other than ‘fair’.
I hope that helps.
-Lee
Lee,
Thanks again for you reply and your advice I will try to take another perspective, as you say there are many operational cost that could be saved, look at SmugMug they saved one million in a year moving their operations to the Amazon cloud, and I doubt if any savings by stocksites would be passed on to the artists, because instead of cutting operational cost many artists are just happy to take a reduced 20% of a licence sales value for one of their assets, remember when that 20% used to be 26% it was not to long ago.
I will also consider the use of the word ‘Fair’ and spend some time thinking of a more dynamic alternative, while another 100000 – 200000 images are rejected at just one site, many that will be paid for by the licence sales of other artists assets.
David
(These are just my thoughts I am sharing)
Hey David, I’m all for sharing thoughts too, and being open to considering the views of others is a powerful ability. And just to be clear, regarding ‘fair’, it’s the concept rather than just the word itself.
-Lee
I like the word fair, the word and the concept. And you’re welcome to call me a kid in a playground as it’s always nice to feel young. I can’t see why capitalism and fairness can’t coexist. My local shop employs boys and girls who work 14 hours a day. The owner of course is wealthy, however why would he want to reduce his wealth to employ more staff in order to be fair. He knows if his staff leave there are countless others to take their places. Supply and demand. Ok, I’ve given a much more severe example and what we are talking about is not on that scale. But, if there are countless numbers of photographers, then it is only good will from agencies which will lead to fair commissions. Good will and capitalism often don’t go hand in hand. Lets not forget all the images online where photographers never reach payout or don’t request payout as they gave up and never check their accounts and all the subscription packages which never get used to their entirety. The agencies don’t miss out on the revenue for these scenarios. However, I can only look at it from my perspective as I don’t know the ins and outs of an agency and exactly what they face. At the moment however I veer towards David’s statement when talking about submitters, “But then some are happy with the revenue, but they could be a lot happier”. Yes we do choose to submit knowing what the commissions are, but I don’t see that the choices we have are that extensive.
Glass half empty or half full?
I agree to a point that it’s easier to make images than have the whole brand-mega-store-with-buyers-in-cue that the fortunate few (stock sites) have to lure photogs in to do business. But if you look at the price of a serious setup with camera and lenses, and then the most important strobes and flashes we are talking sums that would get you a real nice web-shop/site/branding campaign with money to spend. That, however, is not the hard part, it’s the work that is different. One is creative, the other is administrative – generalizing here but you get the drift. One question that i do find interesting and wonder why I haven’t heard uttered anywhere is this: with 60.000 to 170.000 photographers where most earn between ten to a few hundred bucks a month – and all images needs to be dust free/noise free/and generally photoshoped. Where does the money to buy software come from?
Most photographers probably buy their lenses and cameras, but how about the software? Truth be told – $ 10-100/month shelling out $ 1000 on software? I doubt that. Then we have a industry that requires the contributors to “do what ever it takes” to be in the game. I believe that the majority of the micro stock contributing crowd earn to low to buy the software they need to meet the standards that the stock sites have. Catch-22? And one last thing, getting food/location/models/props/helpers&assistants/ (a requirement to take images that sell) might not be super much work, but it sure ain’t free
Thanks for a good site and a forum to speak our minds
If attracting and retaining buyers were an administrative task then don’t you think there’s be more people doing it successfully? I know creating photos that sell well is an expensive business and requires a lot of creativity, but my point here is that it’s more expensive and requires more creativity to build a large buyer base.
Photoshop or the alternatives are indeed expensive. Many microstockers already possess a copy before they start (I fell into this category), and many start off using the free alternatives (GIMP is very popular and sufficient for microstock). It would be naive to think many didn’t illegally acquire the software, but that’s another issue. Also, the large number of microstock contributors with idle or abandoned accounts skew the figures a lot. I’d expect that the majority of active contributors earn a lot more than $10-$100 per month.
And I agree that it’s not free to do all that’s required to create photos that sell. My point is that it’s less work than attracting and retaining buyers.
You’re welcome for the open forum. Thanks for acknowledging.
Just having finished The World is Flat, never thought i’d be in awe of the Wal-mart methodology – but it’s catching up with digital content.
Anyone, literally anyone, can make a website, fill in some content, find someone to pay for marketing (or just tweet endlessly all day until that medium uses up all credibility or the next reverse-sneezing medium comes along), and try and sell. With the same ease and business potential that anyone could open a department store 30 years ago and create cost-effective marketing campaign by dropping leaflets all over town (after all, how could anyone comparison shop without the internets? Easy pickings..).
The only acceleration factor now is supply-line efficency and scaling. The only differentiation factor now is whether your staff has decades of experience in the business of selling images and/or the passion to provide creative imagery, or the agency is approached just as a programming or marketing problem.
Just like in the referenced book, business cannot be entirely outsourced, and even the best people in the new global outsourcing paradigm admit they cannot create or make gut choices as well as the traditional US business innovators.
I remember seeing a cross-selling program in a webhosting service 4 years ago or so, from Fotolia. Set up a webhosting space, see a banner ad in your control panel ‘get photos for your site here’. It was the sign of a shrewd and active marketing dept. Nowadays it’s a different ballgame. The stock image market is becoming flat just like the rest of globalized business – but we aren’t dealing with Dell computers, just visual concepts. It’s good news in every sense: it’s getting easier to get the basic logistics out of the way, while the un-outsourceable skill of creative thinking is increasing in demand conversely.
Thought-provoking ideas Keith. Thanks for sharing.
I’d be interested to know how many of the new photo buyers make their buying decisions based on the creativity of the imagery, which you suggest is derived from the experience and passion of the people behind the agency. Certainly it would be valid for traditional buyers, but I’m curious about how many of the often labeled ‘bloggers, students and small businesses’ have that close to the top of their priorities.
Another thought on that: most agencies use highly artistic images to promote themselves despite the fact that they’re not what sells in stock. Doesn’t that imply that programming and marketing are bigger factors in the success of an agency than you suggest? In my view, the success of an agency is just as much a creative effort as creating stock photos.
Though I agree that some photo agency founders seem to think it’s all about the programming.
Off to buy the book…
Heh yes it’s well worth reading.. just following my own link to the amazon page though revealed some critical reviews of it which are pretty reasonable too. It’s by no means a bible or some kind of magic revelation, just another nice business book to add to the library.. collecting dust.. wish I had a Kindle argh.. (maybe next xmas).
I wouldn’t want to say the creativity of the imagery is based on what the brokers do or feel. I just think it’s an end-sum game like with producing beach sandals or cereal or whatever other commodities can be sold: there will always (and if not now, next year), someone who can produce the same product (image) for cheaper. To create a truly outstanding image (product) requires innovation like came with the iPod. I have a drawer full of MP3 players that I have sweated through over the early 2000’s, only one works out today.
At some point the critical mass of ‘generic’ stock photography (if we haven’t already reached it?) will be arrived at, you will have hyper-efficient teams of highly motivated workers sharing the company DSLR in some traditionally underdog country, to produce up-to-the-minute shots of every possible current trend or image concept. Pop media, papparazi, that’s all based on outrageously fresh ideas or characters, which are hard to come up with in a factory format and typically require millions of dollars in development to produce the ‘worth’ of the image (Brangelina are good looking but didn’t just drop out of the sky), stock is more subdued in that it’s usually a couple rungs lower on the freshness scale and in a lot of cases very easily technically reproducable.
I know for a fact that the lucrative vector graphics side of things is not only the realm of cool Brooklyn design kids anymore but also people living in near-slum conditions in whatever country the internet has reached – from direct communications i’ve learned that at this point, the basic showstopper for photography seems to be the upfront cost of a DSLR, vs the already in-progress upset of pirated or shared graphics software, used part-time at an internet cafe.
It is only a matter of time before the ball drops to midnight with photography production, editing, and distribution too, and the folks still wondering what happened to their clockwork RM/RF cheques from the 90’s are going to be in for an even bigger surprise.
It’s not very depressing in my mind, in fact I don’t think much has changed at the core – the people with original content will still come out on top. It’s just hard to keep aware of this when your normal routine is in freefall.
p.s. an interesting parallel I thought of when reading the description from the mentioned book about how Wal-mart has pretty crappy health care policies for it’s employees, vs it’s competitor Costco (which basically insures all employees, at much loss to the company bottom line). The value and job of the agency will be increasingly heading towards making moral decisions – like (disclaimer – Paul Melcher is Zymmetrical staff) http://blog.melchersystem.com/2009/05/06/its-your-problem-right-now/ – at some point someone of higher thinking needs to step up and say ‘hey, why should a blog-sized picture be licensed at a dirt-cheap price relative to a larger pixel size?’. So Ebay can license an image for their homepage for $0.50 but for a print-sized image it’s a couple hundred or RM.. makes no sense, except from a volume-selling perspective completely separated from higher reasoning.
Reviewing your last comment I realized I didn’t answer the basic 2 question’s directly:
1. Price, price, price – intermixed with the keyword ‘free’, this is what that segment of buyers want. What they need is entirely different – minus the bloggers segment (which is by definition not a class where most people wish to grow from), if they want to be anything else other than ’students’ or ’small businesses’, then theyneed to prioritize unique and valuable imagery as key advancement material.
2. I personally don’t know how to ever reconcile the idea of drawing people in with highly artistic shots when the reality of volume-selling themes is known. I have never been a marketing type and at this point probably never will be. This is why I choose to work with those who are best experienced at these types of juggling acts. I would be up all night if I had to make those decisions.
Hello all,
I must say that I enjoy reading all of the comments posted on this site. Everyone seems to be incredibly versed in the realm of microstock. I myself have just recently decided to get into the “lucrative” vector graphics microstock. Though everyone is mostly involved with photography, I still find it very inspirational in my endeavors. Keep it up everyone!
Lee,
Loved this comment… “(in theory – in reality I’m spending the time doing other things like blogging!)”.
Isn’t that the truth! I’m doing that AND planning my upcoming Disney World vacation, so I’m far too busy to be shooting all the stock ideas I have in my head!
Thanks for the comment and great blog!
$10 per month means 1 payout a year or maybe even none. If you add equipment, software and hours of work it is really expensive hobby not a business. On the other hand most of the top agencies are profitable businesses. They have grown so big and profitable mostly because of this system which is wrongly called micro from micro-payment but it does really use it. Real micro-payment would be credited to contributor account at the moment of transaction. Right now payout limits creates situation that 80% of contributors are never paid.
I think the contributors are getting what they deserve. If a person isn’t willing to take it serious then the payment is never reached. It isn’t really that difficult to reach it at the leading sites (at least occasionally) . Thus I don’t think there is something wrong with that.
Lee,
Great article. In my case, with mostly Rights Managed images, trying to sell my own images would even be more complicated! I make hundreds of sales each month…I would never be able to handle the negotiations let alone billing, collections and so forth! Instead, I am trying to drive supplementary traffic to the sites that handle my work. Even with that more modest goal the amount of work to upload, enter the metadata, blog and market my site is staggering…and all that time that is spent could be spent creating more images. Oh well….
John