02 Nov 2015 StockUnlimited – Business Model Innovation
StockUnlimited is a relatively young stock marketplace that pioneered the use of flat “a la Netflix” monthly subscriptions in stock photography.
They’re starting as an illustration-only site, but they plan to expand out to other media types as business develops.
Bringing the Netflix Model to Stock
StockUnlimited‘s most distinctive feature and the reason for their name is their subscription model. They brought the model popularized by Netflix and Spotify to the stock imagery business: they have one flat rate for unlimited downloads, and subscriptions can be cancelled at any time.
Their unlimited subscription was the also the favorite price for most of companies using this model: $9.99. 5 months after launch, on August 25th, they raised the monthly rate to $19.99 and introduced an annual subscription for $89.99, which works out at $7.49 per month. The changes in pricing were announced in advance, and all members who signed up before that date can maintain the original $9.99 deal for as long as they renew their subscriptions.
Subscriptions originally had only one license option, which is sort of a standard RF that includes elements from RM and Extended licenses. This license allows non-commercial usage for media publications and unlimited print run, among other features. Just a couple days ago, on October 27th, they included Extended License –at $50 per image–, mainly to offer resale option.
Toksvig’s background includes a role as business development manager at Getty Images. Sitt is a co-founder of 123RF. Another 123RF executive involved is VP Sales Leon Hudson, who holds the same position at StockUnlimited. These experienced professionals have played a critical role in lending credibility and seriousness to this new business.
For now, StockUnlimited’s catalog is limited to vector illustrations. This decision was a response to practical needs as much as to market observations. They found it to be an in-demand niche where most of the existing supply is dated, with comparatively lower production costs than other media, that also avoids the legal hassle of releases and rights management issues.
They launched in March this year with a modest collection of around 500,000 images. They claim to have added around 50,000 new files per month since.
While this catalog was a small one to start with, all images are created by commissioned artists and curated by a creative team, meaning all of the content in this marketplace is exclusive and fully owned by the agency. Since all of their images are fairly new, their library has a modern aesthetic, with trendy and up-to-date style.
Getting Contributors on Board
The company plans to add stock photos and footage in the fourth quarter of this year, and have expressed their intention to open their platform to contributors eventually. For now, they’re focusing on gaining traction in their market segment on the base of their wholly owned catalog before calling in for artists and expanding their range of content.
As a young company, they feel they must build a strong buyer base and a positive reputation to attract contributors to their marketplace. And so far they’re getting there: 7 months after launch, they have over 10,000 paid users.
Since attracting contributors isn’t their current concern, they haven’t yet disclosed royalty rates nor licensing terms for crowdsourced images. But they currently review all content based on high quality standards and will continue doing so.
Hoarders and Pirates
Most microstock agencies offering subscriptions include a clause in their terms of service that prohibits image hoarding and stocking-in-advance practices. In StockUnlimited’s case, this is especially relevant, given their all-you-can-eat structure, and they do specify the termination of licenses for all content downloaded that’s not in-use when a user’s subscription is cancelled.
The sustainability of an unlimited subscription model depends entirely on a company’s capacity to grow a massive base of buyers. This company uses this model to attract not only regular stock imagery consumers, but also image pirates, seeking to convert them into paying customers.
In the cases of Netflix and Spotify, the platforms’ rapid growth in popularity reduced piracy, and their pricing was a critical factor. With the combination of low prices and unlimited content, going legal became a more convenient option for thieves. But stock imagery is a different story: whereas movies and music are consumed repetitively by millions of users for entertainment, stock images are purchased for commercial purposes. So it’s yet to be seen whether this model can succeed in this industry.
Will They Make it?
A lot of people already think that unlimited subscriptions will eventually take over the microstock space. But others think the market won’t sustain this model. Of course, exactly the same was once said about movies and music—and even of microstock—, and they turned out to be very successful.
It’s surely interesting to see a co-founder and an executive from 123RF investing in this new approach to the stock business. Their involvement shows that they see potential in this model, but consider it unsuitable for the established agency they run.
Will StockUnlimited be responsible for the extension of this business proposition in microstock industry? It’ll depend on how they do in the market and whether they can introduce contributor content successfully.