24 Jun 2015 How Distribution Differs between Microstock and the Traditional Stock Photo Industry

In microstock, we all know that agencies sell images via partners. But this is done very differently in the traditional stock photo market.

Data Logistics

When it comes to distribution, in microstock it’s all done via API where the images are only sent when a purchase is made. Most microstock partners are either other stock photo companies or businesses that benefit from giving their customers access to images.

In the traditional market, agencies don’t have the luxury of having built system from scratch with modern technology. They’ve had to evolve and adapt over time while maintaining existing systems.  Many of these systems were built by external service providers, meaning the agencies weren’t in full control as microstock agencies are.  Most traditional agencies now have APIs too, but a large portion of distribution is still done by posting a hard drive of the entire collection to the partner.

For those of us who grew up with the ways of microstock, this is disturbingly easy.  Anybody who can demonstrate that they’re serious will quickly find themselves in possession of the entire collections of images from five or more well-known agencies, within a week or two, and without too much effort.

One key disadvantage of the manual hard drive distribution method is key metadata often gets lost in the process. Most commonly this is the contributor / photographer name.  In the traditional market it’s not un-common to see your own images on partner agencies attributed not to you as the photographer, but to the supplying agency. This is worse when images are used editorially and the caption reads: Copyright AgencyA / AgencyB.

File Formats

Microstock agencies distribute in JPG format.  Simple as that.

Traditional agencies are often still based on dated systems with fixed requirements, and there’s a painful lack of consistency between them.  Some require TIFF format, others require a certain colour space, and others require uncompressed JPGs.  The larger traditional agencies have built large, complex systems which convert files en masse from the various formats they receive from their partners to the format their own system requires.

Pricing

Microstock agencies sometimes dictate pricing to the partners.  This can be the same prices the supplying agency charges its own customers, in which case the partner’s profit margin comes from a deep discount on the rate card, or by a set rate, where the partner can charge what they like as long as they pay the supplying agency the fixed portion of that fee.

Traditional libraries are usually price agnostic, meaning that as long as they get their agreed fee, they don’t care at what price the partner sells the license to the end user.

It’s not common for microstock agencies to be price agnostic, and microstock contributors don’t like it.  Depositphotos found this out the hard way in 2014 when their partnership with german stock library Shotshop was discovered.  Shotshop was selling licenses at relatively high prices, sourcing the images through the Depositphotos API – no issues there.  However, Depositphotos was only charging Shotshop a regular subscription – the same subscription rates their own customers pay.  Buyers paid up to €99 for the license fee, Depositphotos charged ~35 cents via a $250/month subscription, and contributors received around 30 cents royalty.  This resulted in a significant revolt by contributors who opted out of the Depositphotos partnership program en masse.

Payment

In microstock there are a variety of payment alternatives. The most common method is for the partner to pre-pay a set amount of license fees, deducting from that amount each time a sub-license is sold to a customer. The other, more common, method is to simply have a credit card that’s charged daily, on days when images were sold.

In the traditional market this is still mostly done on account, where the partner sends a list of licenses sold with the payment to the supplier.  The payment can be bank transfer, but is still all-too-often a paper check. There are also 30, 60 and 90-day terms available for negotiation.

Partners

Most microstock distribution partners are usually apps, website builders, etc.

Traditional libraries distribute to hundreds of other traditional libraries, but with the exception of Getty, they don’t have many app partnerships.

There’s also a lot of cross distribution between microstock and traditional stock, but that’s another post.