Microstock and the Long Tail
Posted by Lee TorrensThe long tail theory applies to microstock in many different ways. Let’s take a look at a few and see what we can learn to help us sell more photos.
What is the Long Tail?
In popular media, such as movies, music and books, a small number of products achieve a high volume of sales. They’re ‘hits’ and ‘best-sellers’. A slightly larger number of products achieve reasonable sales, but not nearly as much as the hits. The remaining products produce very little in terms of sales, but there’s a lot of them, thus creating the “long tail”.
The long tail was noticed when Internet based businesses started carrying a much larger range of products than physical stores could manage. The theory was that the tail was so long that the infrequent sales of a very large number of products added up to more than the combined sales of the small number of high-selling hits. This is a massive advantage for online stores over physical stores. The advantage for customers was that they could more easily access a greater range of products.
For more on the business concept, see the Wikipedia entry and the Long Tail Blog.
Demand by Subject
The sales performance of different subject in the microstock market follows the long tail curve. ‘Business teams’ and other uber-popular subjects make up the hits and sell in large quantities. In the middle are a larger number of more specialized subjects which sell less frequently. Finally, a huge number of rare niches form the long tail.
Supply by Subject
Most top-earning contributors focus on the most popular subjects to maximize sales potential. Many new microstockers follow the same logic, but without having a competitive level of quality first they struggle to achieve any meaningful quantity of sales. To compete in the most popular subjects, photos need to be substantially better and/or unique.
The niche subjects that make up the long tail have less demand and so attract less competition. However, sales are much less frequent, making it more difficult for photographers to cover costs of production. Photos of subjects with limited demand – long tail photos – need to be produced at minimum cost because the return potential is so low.
Whenever I travel I shoot some photos with the intention of adding them to my stock portfolio. On a not-so-recent trip to Tasmania with my family, we visited a site with a rare rock formation known as “tessellated pavement”. I took quite a few shots for stock, but, having never heard of tessellated pavement before, I suspected the shots would be among the lowest demand subject in my portfolio. They were indeed long tail photos. I submitted eight photos which have only produced 26 sales in almost two years online.
The lucrative gaps in the market where competition is low and demand high are difficult to find. However, picNiche does exactly that, helping you find the under-supplied gaps in the market by analyzing keyword supply and demand.
Contributor Earnings
Where available, all statistics support the idea that the long tail theory applies to contributor earnings in microstock. Here’s some data points:
- At the peak of the long tail chart is Yuri Arcurs who previously announced his earnings in microstock had passed the milestone of US$1 million per year. He’s ranked #1 on the Fotolia rankings and #2 on iStockcharts.de. His crown as the top selling microstock photographer hasn’t been publicly challenged.
- Further down the chart are my own modest microstock earnings which are currently slightly under $10,000 per year. This is a long way down from Yuri’s earnings level, but it appears it could still be higher than 99% of other contributors. My current overall Fotolia ranking is 756 and my current ranking on iStockcharts.de is 1149. Given iStockphoto advertises having over 60,000 contributors and Shutterstock advertise over 200,000, my ranks suggest that the vast majority, perhaps 99%, earn less than $10,000 per year. This makes a very long tail.
Individual Contributor Portfolios
Most microstock contributors report that a large portion of their earnings are produced by a small portion of their portfolio, often citing the Pareto principle, the 80/20 rule.
Here’s my top 20 photos by all-time earnings from all agencies (except Fotolia and 123rf who don’t provide earnings by photo) in descending order.
Recognize the shape? My portfolio clearly follows the long tail pattern. It may not be the same for all portfolios, but I suspect it will be very similar for the majority.
LookStat makes collecting this data easier by displaying combined per-photo earnings data from iStockphoto and Dreamstime in descending order.
Other Long Tails in Microstock
I suspect that if microstock agencies charted the sales performance of their portfolio of images they’d observe a long tail pattern. We can get a partial view by sorting search results by the quantity of downloads. For most searches at most agencies (where the data is available) you’ll observe that the quantity of downloads starts very high but drops off very quickly relative to the total quantity of search results. Inevitably, there’s a lot of photos with a single download (plus many more with zero).
If anyone had enough data, they could likely observe a long tail of microstock agency performance too. A small number of agencies seem to account for a disproportionate quantity of sales, followed by a long list of agencies who do relatively little in sales volume.
Long Tail Sales Help Agencies, Not Contributors
The reason online stores can cater to the long tail is simply because of the low cost of offering an additional product for sale – a low marginal cost. It’s often just a few extra database entries as opposed to all that’s involved for a physical store to get another product onto their shelves. Without that low marginal cost, it’s not profitable.
The marginal cost for microstock agencies is also very low. Review, file storage and bandwidth costs are likely much less than a dollar per photo. A single sale will likely make an individual photo profitable for the agency.
However, most contributors would struggle to get the marginal cost per photo, including production, meta-data creation, distribution and overheads, under a single dollar. Additionally, contributors receive a smaller portion of the sale price, making it much tougher to cover costs with niche photos.
So while the long tail makes microstock a great business model for buyers and agencies, it’s not so for contributors. If there’s limited competition for the niche, they might do better to place their photos in the traditional stock photo market where they’ll receive a higher return per sale. My Tessellated Pavement photos may have earned me more with a higher price at Alamy given there’s limited competition for that topic in the microstock market. However, Alamy is actually well supplied with photos of this particular rock formation, so I probably haven’t missed out on too much potential revenue.
Traditional Stock Photography and the Long Tail
Most traditional stock photo agencies haven’t, cannot and probably don’t want to cater to the long tail. The exception is Alamy who have a massive and rapidly growing portfolio of crowdsourced photos that very much caters to the long tail. By automating both the contributor and customer interaction, they’re free from the limitations of other traditional agencies.
What Can We Learn from the Long Tail in Microstock?
- If you want to create photos in the most popular subjects, expect that you’ll be competing on quality
- If you want to create photos in long tail niches, keep your costs (and expectations) modest
- Photos with a small market (low demand) might earn more in non-microstock markets
- Don’t believe anything you read about microstock being an “easy” way to make a “lot” of money as a contributor. Very few make a lot of money and the vast majority make very little.
Posted November 25th, 2009 by Lee Torrens
Great post, Lee. You nailed the crux of the issue. The more popular the subject, the greater the competition and the greater the rewards. You can play the tail, but you need to know what you’re getting into.
I like that phrase, “you can play the tail”.
Exactly Lee, great reading. Some time ago were publicly accessible stats at Dreamstime not limited to 100 results – in those times I had slightly over 100 pics online and even with such small portfolio I was in top 20% in my country. My personal stats and observed stats at microstock show that only few percents make it to the top, my guess based on stats would be less then 5% over 1000 pics and less then 15% over 200 pics – thats huge drop! Agencies earn huge money on longtail as there are thousands of contributors who submit couple dozens of pics and never come back, but they do produce profit year by year and counted together tenth of thousands tiny contributors easily overcome few top selling contributors.
Btw. top selling contributors usually tend to shoot series – then there you often see 1-2 killer pics and 20 similar other which dont sell at all, even some ppl with portfolios over 10k pics have average 1 sale/picture on DT and only few make it over 3 dwls/picture. This shows that niche quality pics do have high dwl/picture rank, but on the other hand long tail requires rather high volume then small portfolio of high quality. So here we come to conclusion that you cannot shoot junk for micro, but you must keep producing high volume to sustain long tail effect of sales. And here I see the problem of micro – simply you must keep costs as low as possible, recycle pics, shoot series – but all these factors lead to higher rejection rate. What a dilemma
Agreed, you cannot shoot junk for micro or any other market where you expect people to pay for your photos. There’s so much supply that buyers are spoiled for choice and will almost always choose the quality photos above the junk. I say “almost always” because many new photo buyers don’t have the background to know what the industry determines as ‘quality’ and just choose what they like. Additionally, quality isn’t always the issue when the content is specific – more on that later.
But one of the points of the article was that long tail sales don’t help the contributor unless the cost of production are super low – that is, you’re taking the photos anyway like I did with the Tessellated Pavement shots. Even then, it took me an hour to keyword and submit those photos, and they’ve only produced around $12 in revenue so far. The revenue may continue, but $12 per hour is not great, especially considering overheads.
So, I wouldn’t suggest anyone deliberately “produce high volume to sustain long tail effect of sales” unless there’s a great variety in their subject (which is not the case in the series you refer to) AND their costs are extremely low. You have to compete in the high demand subjects with super-high quality and/or original shots, or find the under-supplied niches with picNiche if you want to earn more than the average.
Great analysis Lee, thanks.
I made an “exercise” to verify if the 80/20 long tail law is working for my portfolio.
I can say, yes, of course. The 20% of my 25-a-Days Shutterstock downloads gives me more than 70% of the total; the 20% of my Dreamstime portfolio gives me more than 90% of the total earnings! I think that the Level Boost mechanism of Dreamstime magnifies the effect.
You can see related data and graph on a Google sheet here http://bit.ly/micro-80-20 where the numbers are referred to 100 = total earning in that site.
Best,
roberto
And that’s exactly the reason why I stopped selling Microstock: if you don’t go for it 100% and over an extended period of time, there is next to no return on investment for you, only the agencies profit. I find “normal” photography both more enjoyable while working on it and more lucrative (financially and emotionally).
So really this sentence should be written in huge letters on top of every “HowTo Microstock”-page:
“Don’t believe anything you read about microstock being an “easy” way to make a “lot” of money as a contributor. Very few make a lot of money and the vast majority make very little.”
Focx, my experience contradicts that statement. I haven’t uploaded anything since the end of last year and my earnings have been higher this year than last year, including breaking my all time total earnings record in May.
I’m not saying everyone will have the same experience, but I don’t think it’s overly unusual to have consistent earnings over an extended period of inactivity.
-Lee
Sure, but you have to see how much time you invested in the beginning, including taking pictures, uploading etc. So without this substantial investment of several hundred pictures, not much will happen I guess. And as you said below: there is no scarcity, and with the growing number of photographers, cheaper cameras and the economic crisis, there may be no scarcity for the next 5-10 years.
I expect this is a permanent change. There won’t be scarcity in 5, 10 or 50 years from now.
Focx: I agree, for most of contributors its return close to nothing. Im doing microstock time to time about 2 years now with aprox 300 pics in portfolio. Total RPI is about $2 = it doesnt even cover costs, I need at least $6 to cover it. Not talking time spent on keywording etc. – of course Im still more or less beginner, however despite double size of portfolio in 2009 compared to 2008 – I did earn about the same. Because competition grow faster then me.
I see big dilema in microstock – they require high quality and niche pics, however they offer so insanely low commisions it really doesnt make sense to upload anything except volume of easy pics. I think growing the price about 3-5x could help, it will push many of longtail images from loosers into profitable group. Photographers would have much more space for creativity as they would have higher budget limit per picture. For clients its still damn cheap, they will not go away. It would still be the cheapest way to get pics, when we see ho they like pricy guaranteed pictures, onDemands etc. I dont see $10 per picture as the major problem, but I see $0,25 per dwl commision as disaster. Especially combined with current uploads speed and market saturation. The longtail is exactly the thing which is killing contributors profit.
Btw. Lee I see dropping or consistent sales despite uploading, you did start long ago when you had the chance to build good rank in search engines and your portfolio is still not really so small, thats why. See Jacks results – how long you think it will take to get same earnings as you have? Never?
I agree that my early start is an advantage, and that the size of my portfolio helps, but I think the variety in my portfolio is a much bigger factor. That being said, you have good variety in your portfolio too, but around half the size and no people shots. There’s obviously a lot of factors, so it’s all guessing anyway.
Jack’s earnings will overtake mine when he starts submitting more variety and higher production value shots. At the moment he’s just uploading studio model shots that he had on hand, so his earnings are relative to the value he’s providing.
Regarding your thoughts on low commissions justifying only easy shots, how does that work with the top contributors who all upload relatively high production value shots of models? They obviously make a profit doing that or they wouldn’t continue.
Also, raising the price has been debated a lot, and I always say that there’s not enough scarcity (too much supply) to ever be able to raise the prices so drastically. iStock have been successful with raising the prices for a variety of reasons, but they lose many customers to cheaper agencies (have you seen how many customers complain on Twitter about iStock being “too expensive”??).
Interesting discussion. Thanks.
-Lee
Hi Lee,
Great Site – very informative.
Because you are not exclusive, do you worry about some one finding your image on iStock and then searching for it on Shutterstock where it would be cheaper for them and less royalties for you?
Thanks
Carl
Hi Carl, thanks.
No, I don’t worry about that at all. They can’t actually get it much cheaper at Shutterstock because they need to spend a lot of money for a subscription or buy ‘on demand’ which pays a royalty higher than my iStock average anyway. It’s true that I get a lower commission if they have a Shutterstock subscription, but in that case there’s no benefit to them to search on iStock rather than on Shutterstock.
I’m sure there are some buyers who ‘comparison shop’, but I don’t expect it’s very many. And from what I can see, there’s no great threat to my royalty.
-Lee
Ok Cool Thanks Lee – I will also be putting my small portfolio on shutterstock now then!
Carl
Yep, I basically agree. This business is tightly bound together by many factors and we cannot discuss them in depth here, it would be far off topic anyway. If you would like to discuss it abit more drop me email please.
Hey Lee, I did some intersting homework. You are well known person, at least your microstockdiaries.com is well known – so you get lot of refferrals. Ive counted your refferrals on DT and as I see also their portfolio size, I did some stats:
in total 482 refferrals
266 (55%) have NO picture online
114 (23,6%) have up to 10 pics
47 (9,7%) have between 10-50
18 (3,7%) have 50-100
11 (2,3%) have 100-200
18 (3,7%) have 200-500
4 (0,8%) have 500-1000
4 (0,8%) have over 1000 with maximum at 1695
So 78,6% (!!!) have 10 or less pictures online and only 11,3% have over 100. To get some real consistent sales you need at least 100 pics, better above 200. To have some significant earnings and not just little pocket money you should have over 500 – this is only 1,6% of your refferrals! This shows that 80/20 rule apply also to contributors distribution (I mean this as 80% loosers and 20% active) and its more likely 90/10 rule.
I think nearly 500 ppl is enough to show some real stats on it, it would be even more dramatic drop if you recount groups of 0-5 pictures and then 5-20 and 20-50. Ive realized this too late and was too lazy to recount it. Anyway we see that aprox 80% of your refferrals never did it over 50 pics.
That was my point about the long tail of contributor earnings. You could do the analysis via portfolio size too, and I expect you’d also find it’s a long tail pattern. I thought earnings was a more relevant data point than portfolio size, though essentially measuring the same thing.
I think this issue is the main reason why Alamy is in the market at all – they are the best example of a long-tail site at the moment and show that you can sell images at a premium through this model.
The sales I tend to get there are images I’d get a handful of downloads on microstock.
Hey Holgs, you have more experience selling via Alamy than I do, so I’m glad it backs up my theory.
-Lee
I still don’t have a big enough portfolio there for it to be statistically that significant, but its enough to see a trend. I really need to concentrate and get the backlog of images up on Alamy. I had another download there this week which made up for the Thanksgiving-related lull on IStock!
Good article. Those one or two download files can add up to a lot of downloads if you have enough of them. But, it takes a lot of patience to build up a catalog of small niche files. Most new contributors just want to throw their files into the pile of the over saturated niches. You can make a lot of money that way, but it is tough to get noticed. Like you said, there is no easy way.
This really illustrates why micro shoots need to be well planned. The trick is doing shoots that can effectively subsidize niche image production. I can guarantee you this is why many top micro shooters are doing more and more studio style “round robin” type work. You don’t have to do this in a studio though, I’m actually doing a shoot in a few days in an interior designers home that I’ve secured for a full day. I’ll be making use of several rooms, and will also be producing some studio style shots in the larger rooms of this home. The bottom line is that in order to really make serious money off micro, you have to be willing to invest in it. This shoot I’m doing is not exactly some kind of one off “TF” shoot with half appropriate models and haphazardly chosen location – I selected exactly what I wanted – models, makeup, and location – because I’m paying for it all. In my experience with micro, you only get out what you put in, and sometimes you get a rude awakening here and there.
An interesting thing to mention is what I am starting to call the “high demand tail” – images of highly popular subjects that just get a few downloads. I’ve noticed that these types of shots all to often do worse than many deliberate niche photos. Chew on that one for a while!
This was an interesting article. A benefit I’ve found in “playing the tail” is that being a niche artist means your images will not be as susceptible to theft or copycats, since they don’t show up in the top sellers. You are effectively flying under the radar.
The long tail or 80/20 phenomenon is some kind of a natural law. It’s a direct result of the statistcal distribution patterns that govern selection processes. Buyers can select the best out of a sh*tload of pictures, and clearly not all are of the same quality. So some pictures will be selected over and over again while others collect virtual dust.
But this holds true also for the artist’s side. Nobody is always in the best possible shape, so some pictures will neccessarily be weaker than others.
You might be able to soften the curve by choosing the right niche, but I am convinced that you can never really “beat” the long tail.
Great content Lee, as always.
I have suggested in my Squidoo lens on Microstock that you can (possibly) make good money from this endeavour. I stand by that, and the fact that many do, implies it is beyond debate. Obviously it’s not guaranteed!
For example I point out that one photographer is reported to have earned over $10,000 for a photo of his parents! (As repoted on ABC News) (proof supplied-try link above)
Yes a small number make the lions share, and most make only modest amounts. But this is the same with almost all human endeavour. The long tail principal applies to most business activity, as you point out. And the 80/20 principal is well understood. 20% of sales personel make 80% of the sales income in many companies, for instance. This is similar in most industries. That’s not a reason for not trying a business activity, or to dismiss it.
Nevertheless, it’s surely true that photographers that have significant talent, creativity and commitment may potentially make some decent income for their efforts, especially if they learn all they can and follow sites like yours.
However, it’s obviously not a gold mine, and I mainly encourage people to do it for fun or as a profitable pastime, or part-time income idea, and only consider it as a serious business if results suggest it’s worthwhile.
Also: All business is subject to supply and demand, we must live with it, or do something else. You have suggested your sales are fairly consistant, despite the huge growth in contributions, and this may be because the number of buyers is growing fast aswell, as more and more people/businesses go online, or discover Microstock.
Cheers, John.
Nice article, Lee. Thanks.
Was thinking whilst reading that the ‘long-tail’ niche subjects belong at a different price point, simply because they are bought by people that have a specific need them. Then you confirmed that obviously, at the end of the article. However, i can’t see the earnings generated from these things as anything more than supplemental.
Nice plug for Tassie (mania), though. I think I split my chin open on the tesselated pavement, as a kid, on a family holiday on the south of the island.
Go to http://istockcharts.multimedia.de/ and sort by year and then go back one year and have a look what people sold in the year they have been online. It is hardly more than 1500 sales @ $1 a sale thats about 120 bucks a month. So if you want to crack the $500 bar you would have to be online about two years! And upload steady. Making a living out of stock seems to be pretty hard these days…
Lee,
Well put. My experience in the traditional market place helped me to come to the same conclusions several years ago, in particular with specialized photos. Without applying the “Long Tail” analysis it was clear to me that specialized photos sell to a small audience and therefore could not be supported by such small per sale revenue. Furthermore, buyers with specialized needs are willing to pay more. In general, rare subject matter images will sell fewer times. A case in point… Photograph a rare butterfly, and then photograph a monarch. There will be more competition for monarch photos, but in the end the monarch photo will out perform the rare butterfly photo. To earn as much, (or more) the rare butterfly photo should be sold for a higher price, i.e. in the traditional marketplace. Microstock gives away these rare images, and they do not / will not reach their potential. There is a “dumbing down” effect that happens when people only shoot what is common and expected. Supporting the “fringe” images requires more than a few dollars in revenue. Check out the collections of the “stars” and you will find “shoot for the middle” totally obvious, (well executed, but predictable) collections. The long tail images help out the agency by making the collection seem very diverse, but as you have concluded the benefit is biased to the agencies, not the contributors.
Don Farrall
The point with Alamy is that its tail is so enormous that 99% of images will never sell at all. The higher payout per sale means that when something eventually does sell it brings in on average something like 50 to 200 times what you would get from a normal micro sale. My Alamy portfolio has about the same earnings per file potential as my Fotolia one, which makes it equal fourth in my personal sales table.
I think the idea that you are better off putting niche photos on Alamy is false because the chance of ever selling a particular photo at all is much, much lower than on a micro. I sold about 20,000 stock photos overall last year, but only about two a month on Alamy, making the chance of a photo selling on a micro about 1,000 time greater than it is on Alamy. Of course, if your niche photo does sell on Alamy you will get a cheque of tens or even hundreds of dollars for it, making that day seem worthwhile; however, it will probably never sell again, and it is being propped up by 100 other niche photos that will also never sell, so you have to divide the payout between all of them to get a true picture.
Three years ago (in the days when DT published all the data) I did an analysis of how many members had sold how many photos. The site had almost exactly 10,000 members of whom 14 had sold more than 10,000 photos; 100 (that’s 1%) had sold more than 2,500; 1,100 (10%) had sold more than 200 and achieved payout level and 8,885 had sold fewer than needed for a pauout. So 90% had got nothing, only 1% had made more than $1,250 and fewer than 0.2% had made more than $5,000.
When I described this pattern on an iStock forum where earnings prospects were being discussed (saying it was from somewhere else – no name given – but iS probably had a similar distribution) my post was deleted with such alacrity that I could only presume that the shape of iStock’s graph was not just similar, but identical. In fact, the sample is so large that it is almost inevitable that it applies across the entire industry.
The long tail is, of course, extremely valuable to companies, because it represents earnings that they don’t have to pay any commission on for a very, very long time – and in many cases the commission may never be claimed at all. Who is getting the commission from all those submitters who have died without passing on their account details to their heirs? Their portfolios effectively become the private property of the sites that have them (apart from Shutterstock and one or two other honorable exceptions, that send off cheques at payout level without you having to put in a request).
Thanks for your analysis Paul. I think the idea with putting niche photos on Alamy is that if they’re niche enough, the buyers will find them and buy them regardless of where they are. In this case they’re equally likely to sell on Alamy as they are in microstock, making the higher payout a smarter option. But yes, for photos that aren’t “niche” but otherwise low demand, I agree with your point.
I agree with your other points too, though I would add that agencies incur costs to review/inspect and host images, many of which never sell. This offsets the royalties they keep from the contributors who never reach payout. While I think it would be cool if they did an annual payout for people who didn’t reach the threshold, the contributors enter the agreements fully informed about the situation and aware of the risks (at least that’s what they agree to having read when they register).
-Lee