Microstock Full Circle
Posted by Lee TorrensWhen the microstock model first started gathering momentum, some professional stock photographers started complaining that it was eroding the value of photos. Now a vocal minority of microstock contributors have started complaining about low prices.
Specifically, the forum thread cites subscription agencies as the offenders for paying low per-sale royalties to the photographer and selling full size photos at the same price as small sizes. A petition has started within the thread to opt-out of StockXpert subscriptions and downsize photos uploaded to Shutterstock. This is intended to direct buyers to supply channels that are more lucrative for contributors.
Oh, the Irony
I can imagine some traditional stock photographers must be rolling on the floor in laughter while others cry and yet others shout “I told you so” at their computer monitors. The same photographers who created and contributed to the microstock market in defiance of claims of devaluing photography are now using words like “fair” and “union”.
Microstock as a market is only possible with crowdsourced content. Unions, petitions and movements can have no impact in an environment where the market’s suppliers are so varied and disconnected. Current microstock contributors:
- Come from all parts of the world
- Carry all variations of beliefs and values
- Range from hobbyist to established professionals
- Spend from nothing to tens of thousands of dollars on production
- Operate within the full spectrum of socio economic environments
This is the power that took the price of some photos from $300 to $1, and it’s the same power that makes a workable business model out of subscriptions that pay photographers 25 cents per sale.
Thanks to microstock, the stock photography market is finally subject to the laws of supply and demand. From this point forward it is the market that will determine the price.
What Business Are You In?
If you’re in the business of selling photos, you’ll be equally happy with an agency that sells 50 photos for $100 as one which sells 300 photos for $100.
However, if you’re in the business of improving the industry for the benefit of your fellow photographer, that’s very noble of you. You’ll likely drop the second agency as they’re not paying you as much per sale – they’re not paying ‘fair’ prices. But will this help your cause? Not likely. One of the other 29,999 microstock contributors will get your sales.
Almost all microstock contributors are in the business of selling their photos and they’re not too concerned with the price. That’s how microstock prices became what they are and why organized boycotts will have no impact. Shutterstock is among the top earners for most microstockers, so boycotting them or reducing file sizes is not in their interests if they’re in the business of selling photos.
Full Circle
Some of those who pioneered the rock-bottom price model in defiance of protests from established professionals are now repeating those protests about their own market. Stable prices were sacrificed for easy entry into the market and they’re never coming back.
While the protesters are largely well intentioned, their efforts are futile without a clear understanding of the forces at work in a crowdsourced / web2.0 based market. Higher royalties will be achieved when enough suppliers to represent the bulk of quality photos more their portfolios to more lucrative agencies. This is unlikely to occur while agencies with subscriptions are still among the highest earners.
Posted January 9th, 2008 by Lee Torrens
I haven’t been invovled in microstock for long- but at it’s core the business model is ‘sell a bigger quantity at a lower price’.
And, maybe it’s just me- but shutterstock fills that exactly: it’s the best selling microstock site I post to- about 40% of total earnings, exceeding even iStock.
In the future I plan to significantly increase my posts to shutterstock- though I’m more than happy if there’s less competition…
John,
Shutterstock are my top earner too, but with so many contributors the diminished competition will have no noticeable impact for you and I. Some contributors in the thread acknowledge that their combined weight is still a drop in the ocean.
You’re spot on about quantity versus high price. That’s the game microstock and that’s why I don’t bother calculating earnings per sale. I’m interested in the agencies who can give me high earnings at the end of the month, and Shutterstock are doing that better than anybody.
-Lee
How many you earn at the end of the month?
This many.
Great article mate.
I agree. Although it seems like an endless debate, in the end the market will decide how prices go. For every contributor who quits due to reasons of pride or such, 10 others will jump in to fill his place.
Shutterstock is for me too the highest paying site, despite giving me the lowest price per image.
Here’s one thing that I keep wondering about: how long will microstock sites last? And what will change in the future in the microstock business? It would be great if you could share your thoughts on this.
Photonomikon,
It’s only endless as people adjust to a new way of doing business. The rules have changed, and people get frustrated when they can’t use the old world tools of unions and petitions.
I don’t like future-gazing because something always comes from nowhere to completely change the landscape. However, microstock agencies are not going anywhere. Some may collect great portfolios and increase their prices (which is already happening), but other agencies will always stick around to operate in the $1 market – and it’s well proven that it’s a big portion of the market.
In short, we’ll always have microstock, but I expect some of the existing microstock agencies will grow into the midstock price range.
-Lee
Yes, it is a rather pointless debate.
Be careful if you send to the subscription agenceis model such as shutterstock, 123rf, dreastime it bad for the long term, consider this:
1. subscription sales are much more destructive for the business as a whole, than microstock in general. Subscriptions enable customers to build large image archives that reduces the need to download photos in the future and thus our (photographers) profit potential.
2. average subscribers only use about 15 – 30% of the full potential of their membership. This means that most pictures in a subscription sell at a 5-6USD price-point in average, giving us (photographers) about 25 cents in commission. A bottom-line commission of about 5 percent. Even if I was totally wrong and every subscriber actually downloaded the double of what I have heard, the commission would still only be 10%.
3. Same price at all size, even 16mp the price same as 1.3mp?
Downsize your image before send to the subscription model agencies.
Erwin,
While I can understand the point of view of some of your sympathizers, your comment shows you haven’t read this post. The link I removed from your comment is already in the first paragraph of this post.
If you take the time to read, understand and interact, you’ll have a far greater impact on your cause. Repeatedly posting the same comments in various places just makes you look like a spammer, particularly when I have to edit out your affiliate link.
I can see that you’re trying to do something you believe is good for the industry, but there are other methods that are not so counter-productive.
Relevant comments are always welcome, regardless of your point of view. Spam is not welcome.
-Lee
Sorry lee…For my double posted, I don’t see my post after hit add comment button, need to learn how to use this web.
Here another reason why photographers hate subscription model:
4. Deep Discounts
First, in the business world, deep discounts are normally given to the best customers. Giving a deep discount (up to 35% off or more from the normal price) is understandable. But subscriptions go much, much deeper than that.
The approximate cost and royalty for a maximum size image is as follows at the top sites:
IS: $20 ($4)
DT: $8 ($4)
SXP: $10 ($5)
FT: $5 ($1.50)
So an artist will receive between $1.50 and $5 for a maximum size image from the largest sites.
If a customer buys lots of images, then a discount should be given. Giving discounts to large customers is good business. But most sites already have discounts for purchasing large token packages. For example, on IS if you buy 1500 credits, then you will receive a 34% discount. On DT, if you buy over 150 credits, then you will receive a 25% discount. On SXP, if you buy 500 credits, then you will receive a 20% discount.
But subscriptions go above and beyond these deep discounts. Almost to the point of giving away our images.
For example, on DT, a submitter receives 0.30 for a subscription. That is a 93% discount from the normal royalty (of $8 for a maximum size image with over 100 sales). On SXP, a submitter receives 0.30 for a subscription. That is a 97% discount from the normal royalty (of $10 for an XXL image).
5. Macro Buyers
Second, the buyers that are purchasing subscription packages are normally the large agencies that need lots and lots of images. These are the agencies that used to purchase macrostock images for $100s (if not $1,000s) of dollars apiece. These are the customers that could actually afford to purchase images individually (if needed). According to the financial news, this is a multi-billion dollar industry. They have deep pockets. But yet, they now want to offer them even deeper discounts (over 95% off) on images that are already cheap. It makes no sense
We are free to choose which is better for us…
Thanks for your comments, Erwin. Excellent-
Lee, Excellent article. Microstockers created the commodity image market and now they are reaping the benefits. The total market for images has exploded. As the cost of images falls opportunities for buyers to use images expand and the total value of the market increases driving down the price per unit again and so on. You can’t – and shouldn’t want to – stop the process just because you don’t like the price point.
The internet makes this a nearly perfect market with many buyers and many sellers with incredible ease of entry, can’t see how you are going to control prices, so why try? fred
erwin > once again, although subscription sites seem like a ripoff for contributors, my biggest earnings come from SS. Of course, I have the biggest portfolio there but other sites simply don’t come close. I even get tons of downloads from crappy photos that I uploaded at the beginning, several years ago, that no site would accept these days.
Personally, as an amateur photographer, I am so glad I jumped on the microstock bandwagon. The only things I regret are:
1) that I didn’t jump earlier… I only heard about microstock sites in late 2004 – early 2005
2) that I didn’t put on more work in creating gorgeous images; as a result most of my early photos (which consist of most of my portfolio on certain sites) are poor in quality
These days I’m trying to actually “shoot for stock” and sites like yours, Lee, are awesome for people who want to improve their microstock skills. More importantly, reading a lot of information on various websites made me change my perception of the whole microstock business for the better.
I participated in that discussion, and my name appears on the opt-out list. Just wanted to add a couple of things here:
In retrospect, I think Yuri was extremely successful in freaking a lot of us out at how low a comission we make from subscriptions. Sure we all probably knew it was low, but just never really thought too much about it. Afterall, SS is a good earner for most people.
Do I still think subscriptions are damaging to the business? Certainly. Microstock is all about low prices and high download quantities, but that doesn’t mean we should be giving our stuff away, which is nearly what we are doing when SS takes 90% or more of each image sold. The slice of the pie that constibutors get in a subscription model is too small, even if that slice does turn out to mean decent bucks.
That said, I’m not cancelling my SS, 123RF, SXP, DT accounts. I may not be thrilled with the subscription model, but for now it is what I’ve got, and I’ll take it.
Do I regret jumping on the bandwagon in the SXP opt-out thread? Yes. SXP is going a good thing by giving us the option to choose how our images are sold, and they also offer one of the highest royalty percentages in the business. And over the last few months, my sales there have skyrocketed. They are doing everything right, and did not deserve the brunt of that collective community frustration.
All that frustration and energy should be directed at the bigger problem, the subscription model in general and how we might open a dialogue with subscription sites to address the problem. I’m realistic enough to see that SS might never change their ways, and I can live with whatever they offer going forward in terms of comissions. I just think things could be better. We can do better than 5% or 10%.
I wonder how many people on that list are now gray-listed? It will be interesting to see if posts start surfacing about their rejection rates mysteriously going up.
Hi Pavel,
I don’t think so. The agencies don’t have a history of taking things personally.
-Lee
One other thought, largely unrelated to this discussion. You mention “crowdsourcing” a few times here and throughout your site.
Is microstock really “crowdsourcing”? I’m working on an article about this and will forward a link when it’s done.
This is one of my pet peeves. In short, I question whether microstock can be lumped into the crowdsourcing category alongside projects that really abuse the contributors and often don’t pay most of the crowd. I think of design contests (SitePoint), mass data collection/processing/mining, group spec work, etc., that pay little or nothing to most people involved, and then we have microstock where people make decent money. There are professional microstockers, but I’ve never heard of a professional in most well-known forms of crowdsourcing.
Hey Helix7,
The critical aspect of crowdsourcing that is present in the microstock market is the dispensable suppliers. Agencies report having over 30,000 active contributors, and it grows daily. Even if you manage to unite 10,000 in an industrial action, what damage could you do?
Microstock fits the definition of crowdsourcing on wikipedia, which cites the Amazon.com example where the ‘crowd’ were paid. Still, I’ll be interested to read your article, so please forward a link when it’s ready.
-Lee
Thing is, because buyers don’t use their full quota is the very reason why SS works. If every subscriber were to download their full quota every month, SS would lose money big time and their model simply wouldn’t work.
Of course. The industry average daily downloads on subscription plans is 9 images, which is why agencies set the pricing plans at 25. Their profit is in that gap.
But they make an upfront offer to contributors. They each choose to accept or decline.
-Lee
Why suggest efforts are futile when Yuri and AndresR are on board? Do they carry no weight?
I cannot speak for everyone else. My concerns regarding the subscription model are the following:
1) Yuri gave a rather dismal estimate of our take home commission percentage. Whether or not it is true, I think contributors would like some answers.
2) Microstock prices have risen appreciably over the last few years to reflect the growing proficiency of contributors. The recent iStock price increase is particularly notable. In comparison, subscription prices have inched upward (20c to 25c at base level). I don’t think it is unfair for contributors to question why commissions have been so slow to increase at these subscription sites.
3) As Yuri and many others have noted (and as I have seen in my own portfolio), earnings really don’t grow over time for a lot of us at SS. Portfolio size keeps increasing, but the search so heavily favors new images that older images contribute very little. And at SS, “old” is like 2 months online. This much I can offer evidence of via spreadsheet. Many of us wonder – are our contributions a quick money grab for us, or an investment in our future earnings? The former seems more true.
It wouldn’t take much for me personally to embrace the subscription model. A noticeable commission increase would be a big start – something in the range of 35c to 40c at base rate. Also, a tweak to the search engine allowing older images to sell more and grow overall portfolio earnings.
Hi Dan,
While Yuri and Andres are both excellent microstockers and very high profile, their combined portfolios represent less than 1% of the stock at Shutterstock. Much less. In this situation, they carry no weight. Also, Andres will not be downsizing at Shutterstock.
1. Most microstockers don’t care about their take home commission rate. They’re interested in agencies that send money at the end of the month.
2. “Fair” is irrelevant in a capitalist market. They offer you a deal and you choose whether to accept it or not.
3. I agree with your assertion of the earnings growth at Shutterstock, but this is offset by a massive initial burst that no other agency can match. Ultimately, the best images achieve ongoing sales at Shutterstock. And yes, most contributors are after the ‘quick money grab’. Your ‘investment in our future’ idea is a ‘deferred money grab’, is it not? With so many contributors, any ‘future investment’ you make by boycotting or downsizing increases the ‘quick money grab’ for everyone else. That’s where the futility lies.
I fully understand your point. It’s the same argument that macrostock photographers were making years ago: “let’s all boycott these low prices so prices come back up”. When microstock was born it brought low photographer commissions. Neither are going away.
It’s understandable that people don’t like it because something they’ve had is being taken away from them. Regardless of how you label it, ‘bad’, ‘wrong’ or ‘unfair’, it is what it is and we will each choose how to respond. What I’m saying in this article is that you have only two options in your response and only one of them involves you getting any money for your photos.
Thanks for your comments. I hope my explanations make sense
-Lee
Lee, Some interesting statistics I have been able to glean from one MS site – not one of the majors but has been around few years.
Out of some 630,000 images and 3400 contributors.
Average account has 186 images.
Mean number of images is 39 in an account.
Accounts with 1,000 or more account for: 41.6% of images and 3.94% of contributors.
Accounts with 100 or less account for: 9.2% of images and 66.56% of contributors.
Top five contributors in percent of total images: 2.1%, 1.12%, 1%, .88%, .73%
This site is probably a good example of a small startup but not so good for the big 5.
fred
This discussion is turning into that endless debate but I’m enjoying it. I think both sides have a point. However, it depends who is on each side. A pro photographer will probably have the highest resistance and aversion to subscription sales while an amateur photographer like myself won’t mind them at all.
For me personally it’s just as Lee said: the check at the end of the month counts. I don’t really care what the commission for each download is, as long as the bottom line is a fat amount.
As an example, consider this. My top 3 earners are SS, DT and Bigstock, in this order, followed closely by Fotolia. Istock seems promising but I’ve only joined them a month or so ago. A couple of weeks ago I’ve had my highest sale so far, an extended license of some sort on Bigstock. $9+ for that image. A very good morale booster but nothing more than that. SS still remains by far the best performer. If I could have $9 sales every day from Bigstock, that would be great and it would definitely beat SS but that will never happen. I’m not expecting this to repeat for a long time.
Now here’s a pattern that I’ve noticed with SS. In 99% of cases, my freshly approved images are downloaded during the first 1-2 and sometimes 3 days. After that, “normal business” resumes. And by that I mean any random photo in my portfolio gets downloaded equally, from the oldest to the newest. It’s a pattern that never fails, so I assume the search engine is designed to give a “boost” to new images for a couple of days. Correct me if I’m wrong.
I’m amazed that so many contributors cite Shutterstock — a subscription-only model — as their biggest earner.
I contribute a few photographs to a handful of the microstock sites but in real life I’m a designer working with a small design consultancy of ten people. During the last year we’ve spent at least $10,000 on credits at iStock and a few hundred dollars on credits at Dreamstime. We’ve never bought a subscription package and I can’t imagine us ever doing so. This is because one day we might download three images and the next day we might download fifty-three. A subscription-only package wouldn’t work for us.
I can see one advantage with the subscription model; it puts a ceiling on a company’s daily spend. But what happens when that company needs more than twenty-five images a day? I guess if their subscription is with Dreamstime or StockXpert they buy a few credits to cover the extra downloads, and if it’s with Shutterstock they have to buy those credits from another site.
I tried to join Shutterstock a few months ago but got rejected. I haven’t tried again since.
This doesn’t mean I’m against the subscription model (afterall, I have images on sites like Dreamstime and Shutterstock which offer both packages) and it certainly doesn’t mean I won’t try again at Shutterstock in the future. For the moment, though, I’m going to concentrate on those sites I’ve already joined that are generating credits-based sales.
Actually it’s a bit hard even for me to imagine how SS manages to survive on the subscription model. Like you said, this model simply doesn’t work for many people. Think only about the large number of people who need a couple of images to put on their blog. Or the small-time designer that needs a few pictures for a site.
From what I hear, some people use subscriptions for building large image banks that they might use at some point in the future. Others, needing a certain theme, will download 10 similar images and afterwards decide on 1 picture for the final project, while the rest get discarded.
“Thanks to microstock, the stock photography market is finally subject to the laws of supply and demand. From this point forward it is the market that will determine the price”
The stock market was always subject to the laws of supply and demand.
As for the market determining the price, actually, it is the perceived value of the photograph that determines the price. Photo buyers will continue to pay a premium for highly valued imagery.
As for your take on microstock and what it has done to photography in terms of ‘coming full circle’, did it every cross your mind that if every single microstock agency charged higher prices, then buyers wouldn’t have a choice but to pay more, which would mean more money to photographers.
No matter what you say, microstock was never good for the photography industry as it clearly devalued the production costs required to create stock imagery. You can blather on all you like, but this is fact.
As for photographers ‘not being too concerned with the price’, if this was the case, then photographers would GIVE there photos away for FREE. I mean really – do you believe that line you wrote?
If you are going to talk about microstock, then cut the b.s. and call a spade a spade and tell it as it really is.
Thanks for your response Thomas. It’s always helpful to have a calm debate about these issues.
The stock photography market wasn’t subject to supply and demand because supply was restricted. Agencies only took the best photographers, which limited supply and kept the price artificially high. Now that the market is open to anyone, price has come down.
Yes, buyers will continue to pay a premium for highly valued imagery. Buyers are part of the market, so while you’re correct in your assertion, we’re both saying the same thing.
Yes, if every microstock agency charged higher prices buyers wouldn’t have any choice, but in a free market it’s up to each seller to determine the price that provides the best return – high sales or high prices. Currently, microstock agencies are getting supply from photographers because images sell well at low prices. If photographers could earn more selling through traditional agencies, don’t you think they would?
Microstock has been ‘good’ for me and other photographers and hobbyists, while certainly ‘not good’ for others. As for whether it’s been ‘good for the photography business’ or not, that’s entirely subjective.
Microstock contributors are not concerned about the selling price as much as the quantity of earnings that come from the agency at the end of the month. This is very different from ‘free’. Yes, when it’s in context, I stand by what I wrote.
You raised a good point about production costs. Microstock has less ability to sustain expensive shoots, and photographers undertaking such ventures are wise to sell such shots in high yield markets. However, people who can produce similar results at lower costs now have an accessible market. It’s the same reason so many of our products are Made in China. They can produce more efficiently, eroding the sustainability of inefficient production. This is what microstock has done to the market, and few buyers, agencies or ‘efficient’ photographers would argue it’s not a ‘good’ thing.
Thanks again for your comments.
-Lee
I’m sorry Lee, but your last paragraph is just laughable. Oh yeah, sure things made in China are ‘cheaper’, but that all depends on how you define ‘cheaper’ and to whom? Does that cost take into account the quality of the air which is affected by factory output? Does it take into account rural people who are displaced as towns, then cities (and their factories) continue to sprout up around the country? Does it take into account the cost of transporting those cheaply made products around the globe and the associated carbon footprint? Does it take into account the industries and jobs that have been lost in countries that can no longer compete with such cheap labour, as used in China?
Just because things are made cheaply in China doesn’t mean it is a good thing for consumers necessarily.
As for the implication that microstock allows for more efficient production and that is has eroded the sustainability of inefficient production (in the stock industry I assume you are referring), you have got to be kidding me!
There are many agencies, buyers and efficient photographers that would argue otherwise. I am surprised you would write something that is so untrue.
I think the microstock model is interesting, but eventually it will return to the days of higher fees. The masses really do have the power here. The Macrostock agencies (Getty, Corbis and the like) paid 40+ percent of sales–and they did most of the post submission work (key wording, categorizing, client relations and image research). Now most of that is put on the shoulders of the microstock contributor. The funny thing is that now the microstock sites are keeping 80-90% of the profit from your work, your equipment investment, your time, and your expertise. I think you should fight for a higher percentage–and the internet makes a great organizational tool in this respect. As it is, many professionals are already thinking about or even starting to compete in the microstock arena which in essence means amateurs may have to raise their shooting game in a hurry or evaporate–most professionals have 20 plus years of experience on amateurs). This will eventually drive pricing back up, but amateurs can also be a part of this by demanding more compensation for their hard work–and it is work as many of you are discovering. If I were to average the amount of time I put into each image which includes things like equipment research, purchasing, supplies acquisition, software, computers, hard drive space, hard drive backups, planning, image making, image downloading, image editing, retouching dust spots, uploading, equipment maintenance, equipment upgrades, props, cards, etc–you get the idea, my hourly fee to stay profitable could not be supported under the current microstock model–no profitable photographer can. At the moment, amateurs are being taken advantage of in microstock. A simple calculation on one piece of equipment can show this. Every shutter click costs you something. Take the cost of one camera body and divide it by 50,000 for an amateur digital body (shutters have actuation lives, generally based on the end user–pro bodies average 100,000 to 250,000 actuations) That is your cost per shutter click. This is but one piece of equipment and doesn’t take into account any of the other soft costs I discussed above of making photographs. These are just things to think about as you continue this discussion. I have done some writing about this in my Photography Futures blog, but my thoughts on the subject are constantly evolving.
Hi Aaron,
Great comment, and I agree with most of your points.
Microstock does appear to be raising prices, but with all the Creative Commons options available and the tight competition between microstock agencies, I don’t see it going much higher. Some agencies will, and are already positioning themselves to be ‘premium microstock’, but I expect most will stay where they are to remain price competitive. With the current dynamics, I see downward price pressure, but no real upward pressure.
I don’t agree that the masses have the power. As I see it, ALL the power is with the top four microstock agencies. They pay low commissions – as you pointed out – and the commissions are getting lower, not higher. With no barriers to entry for photographers, there’ll always be someone willing to sell for less, especially those based in countries where production costs are so much lower. The masses actually have no power because they’re disorganized, and effective organization would require every single contributor participate. Given the reward for non-participation is access to the entire buyer market, there’s zero chance of a successful outcome to organized action.
This explains why microstock agencies can take 80%-90% and make photographers do all the research, post processing and keywording.
I agree that microstock contributors, both hobbyists and professionals, have to raise their quality levels quickly in order to survive. There are lots of traditional stock photographers participating in microstock now, with all their experience and equipment. However, it’s not entirely one-sided. Most traditional stock photographers struggle with the technical requirements of microstock agencies, which are much higher than at traditional agencies. Even the companies many of them use to do their post-production and keywording have virtually no understanding of the requirements and dynamics of the microstock market. But yes, in general, microstock is no longer the same opportunity for less-than-professional images that is has been in the past.
I also agree that the income from microstock cannot support you with how you currently create stock photos. You have setup yourself and your business for a completely different market, and the future for this setup looks grim indeed. Microstock is global, so with your setup and being in the states you cannot compete with those in countries where production costs are much lower. Microstock will be very difficult for you through no fault of your own. However, for many other photographers around the world, it’s a very attractive opportunity.
My thoughts are constantly evolving too. I’m learning a lot through interactions such as this. Thanks again for your comments.
-Lee