Get the Right Picture for the Right Price

I recently had the privilege serving as moderator on a panel for ASPP New England. Fellow panelist Pat Hunt of Hunstock.com crafted the following summary of top takeaways from the event. With Pat's permission I've re-published below. Thanks Pat!

On October 8th, 2009 ASPP New England (American Society of Picture Professionals) held an informative panel discussion called, Getting the Right Picture for the Right Price. A lively discussion by a group of experts in the industry helped to shed some light on the ever changing and confusing issues in stock licensing and pricing. The panel consisted of (pictured above l-r):

Mark Ippolito - Moderator and Founder of Shabustation.com
Pat Hunt - Co-Founder and Managing Director of Huntstock.com
John Griffin - CEO of Cutcaster.com
Christopher Kenneally - Director, Author, Creative Relations at The Copyright Clearance Center and Ozmo.com
Jean Howard - Account Executive, Editorial Sales at Auroraphotos.com
Rob Sylvan - Site Director for iStockphoto.com

Mark Ippolito opened by declaring that the digital media industry today is more than just stock images. We are in a mixed media industry, requiring constant upgrading of skills and the flexibility to change with the new technologies and business models. Many of the basics of pricing for still stock imagery are still the same:

• Right Managed (RM) – Based on image size and placement, press run, circulation, languages and media for a specified time. Exclusivity is available.
• Royalty Free (RF) – Image are priced by file size and are downloaded directly from websites. There is no opportunity for exclusivity. Prices often range from around $50 for low resolution to over $500 for the highest resolution.
• Subscription pricing – Offers access to a collection of images, paid for weekly or monthly, and available for daily download, usually up to 25 images. These are all RF images.
• Microstock – Founded by iStockphoto in 2000, this business model offers low priced user generated material along with images from professional photographers and artists. Customers purchase “credits” and use them to license images ranging from $1 to over $18, depending on quality, file size and bulk credit purchases.
• Rights Ready – Getty’s hybrid of Rights Managed and Royalty Free. One price purchases a whole package of rights often including ads, direct mail, website usage and more.
• Preferred Vendor Pricing – Negotiated bulk pricing agreements by stock agencies with large clients. Appropriate for textbook companies or anyone using a large number of images over a period of time.
• User Generated Photo Service – This system allows a buyer to pick the image and terms of usage and then set the licensing fee with a bid to the seller. This business model is being promoted by Cutcaster.com.

Comments from the Panel:

Pat – My company, Huntstock, is a lifestyle production company, specializing in some niche categories that are difficult to find and produce – Positive Lifestyle of People with Disabilities, Industry/Technology, Hispanic Lifestyle, and Boston Icons. We struggle with pricing models and with trying to discern which are the best distribution networks. The micro and macro models create a balancing act as to which business model to focus on, and how many images to put into each segment. We feel like we are doing full time change management.

Over the past decade, the pricing has gone down significantly, and there is no way to get rich quick in this business anymore. It feels like the recession accelerated the use of micro pricing. There is a great deal of effort in the industry for creators to delineate styles that go into micro and macro, and I’m not sure you can define them that easily. It is necessary to experiment in all of these distribution models to see where our money is going to come from. In micro you have to do a huge volume in order to make enough money to be worthwhile. Just like any business, it’s just another business model with its own format and its own distribution system; you have to do all your own keywording, uploading, color correction and it’s time intensive. The people making serious money have made a commitment.

John – As a former Wall Street broker turned stock licenser, I took my experience with working in the electronic marketplace like the NASDAQ, and translated that into traditional stock licensing, where sellers can set their own price. We have a pricing algorithm, that helps them find the correct market price. Buyers can purchase any image at the price shown or can bid on content to name their own price. This gives the market some flexibility and made it more dynamic and Cutcaster has been live now since the beginning of 2008 and has been doing well. We write a lot of blog articles and our goal has been to make our information open for the buyer and the seller.

Chris – Director of The Copyright Clearance Center, which is a non profit company founded in 1978 to “make is easy to use and share published content.” We have been trying to build on the licensing expertise that we have developed. Osmo.com is a web based service for licensing independent or user generated content. Ozmo offers no fee to a content creator putting their work into our database; we are trying to extend the mission of the CCC into the user generated content field. We feel that the principals of copyright and ownership matter, and that people should be paid for their work. That is under challenge today, given the way the internet works. Prices are set by content creator. We reach out to the trade organizations as partners and we are working with the PLUS coalition to introduce an advanced pricing module that uses the “Plus Pacs” standards. That will be rolling out later this year. We are also actively seeking out partners with a unique point of view. For example, they are working with a Lowell based company called www.socialdocumentary.net which is using the power of the photography to promote global awareness.

Jean – Aurora Images has changed every year and continues to do so. The core is still RM imagery, but it is now based on the IPN network, where individual photographers can have their sites joined by shared technology and shared pricing models. We began an outdoor collection of extreme sports, along with video and stills. We also expanded into more creative advertising work by an alliance with Getty Images, as asset for our artists that can’t get into Getty. We have at least 12 image partners in Europe. Also we have started an RF branch called Aurora Open and a multi media division called Aurora Novis. Our model is based on providing as much personal service as possible.

Rob – iStockphoto was founded in 2000, and had been a successful user generated stock provider, with photos, video, audio, vector illustrations and flash. Photography is the largest segment. In 2006 the company was sold to Getty Images, which has been a good partnership, offering the advantage of Getty’s controlled vocabulary to spread into different markets. The company is still based in Calgary, Canada.

In 2003 you could license an image for 25 cents. However, prices are inching up and this year we launched Vetta, a premier collection of photos and vector files, adding video in the future. The price is higher for (pixel dimension pricing) 17mp file, which translates to 70 credits or $70. It varies with purchasing credit bundles. The market response had been good, and iStockphoto offers a lot of feedback quickly by sharing on blogs. We need more interaction between creators and buyers.

Some audience conclusions for the evening:

Some images are commodities and some are rare or hard to create. The commodity market is driving prices down, so distinction is based on quality The high production images may become the mainstay of macro, and the commodity images will be the same in the micro market.

In the micro market there is a fear that there exists a blandness from people that don’t have an ability to take pictures. However, iStockphoto’s images have gotten better in quality over the years, and not all buyers need top quality. There is broad opportunity for all types of contributors. Also, competition between websites creates a need for ever better content.

CPM or “cost per thousand impressions” may be one of the new licensing systems in the future. The advertisers split the money with the content creator based on the CPM that they charge to those licensing the images. On a website one sees a banner ad which uses this system that draws people to the site. The drawback in these new pricing systems is being able to make charges appropriate for the accounting departments of companies, who don’t want to change their systems.

It is easy to see that the constant technology and business model changes in the media industry make licensing and pricing a confusing issue for the content creator as well as the licensor. However, opportunities abound to access new and better content with ease. Today’s marketplace makes images available for every price point. Going into the future, there should be extensive growth as mixed media develops.

(Pat Hunt is a writer and workshop leader for the stock photo industry, and Managing Director of Huntstock.com in Boston, a lifestyle image production company. pat@huntstock.com.)