29 Jun 2009 Creating Stock is Easier than Selling Stock
We 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?