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Let’s Create a Two-Tier Pricing System for Stock Photography

Posted By Jim Pickerell On April 15, 2010 @ 12:04 am In Stock Art and Photography | 14 Comments

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If stock photography as a profession is going to survive, we’re going to have to find a way to develop a two-tier pricing system. One tier would be for commercial use of images and the other for personal and small use.

Microstock sellers have proved in the last few years that there is a huge group of customers out there who use images for personal and very small business uses. They will pay something to use images, just not very much. The problem with microstock sites is not that they sell images to these customers; it is that they sell image files to large commercial users for the same low prices they charge those with small budgets.

Small Use vs. Commercial Use

I don’t think professional photographers can ignore these small and personal users. Given the way the market is currently working, a huge percentage of the customers who formerly purchased their images from professional sources are now turning to the amateurs and the low-priced sources for the images they need.

It seems to me that the key to maximizing revenue from both the personal and commercial customers is to clearly define who qualifies as a small user and price for each group separately. That said, let me make a stab at defining small users:

  • Personal blog
  • Student reports
  • Classroom presentations
  • PowerPoint presentations
  • Religious organizations
  • Non-profit organizations
  • Ezine
  • Personal wall art

If we can define such uses precisely and in simple enough terms, I believe we have a chance to develop a sustainable business model that will allow professionals to profit from their efforts.

No matter how well we define “small use,” there will always be some stealing and unauthorized use — maybe a lot of it. But if you get paid for some use, isn’t it better than nothing?

Consider all the people who are paying to use microstock images when, if they worked a little harder, they could probably steal them. The trick is to find the price point where it makes more sense to acquire the image legally than to steal.

Even if we had a very strong copyright law (I’m not holding my breath), it is never going to make economic sense to try to collect from the small user for unauthorized use. Therefore, let’s try to find a price point where it makes more sense for the customers to pay rather than steal, and for photographers to get as much as possible from these users.

The iPod did it with music. It is possible with photography.

On the other hand, it will still be worthwhile to go after a commercial user who uses an image without properly licensing it. PicScout’s [2] ImageTracker and ImageExchange system will make it very simple for customers to know if they need to license an image, no matter where they happen to find it.

On the commercial side of the business, at least, this will make it much more difficult for image users to claim they couldn’t find the owner or didn’t know they had to license rights.

Defining Small Use

Let me suggest possible definitions for the various small and personal uses.

Personal blog or Web site

Any blog or Web site created for personal use or to promote a small business with fewer than 10 employees. Larger corporations would fall under the “commercial” category and have to pay a higher price for such uses.

Student reports

Any student use for a report or personal use.

Classroom presentations

If the image is used in a classroom presentation that is prepared by a single instructor, it falls into this category. However, if the image is used as part of a presentation that is prepared by a large publishing company or school district, it should be licensed as at a commercial textbook/education price.

Religious organizations

One of the things to consider here is whether to limit the file size within this definition so the images are only satisfactory for Web, PowerPoint and very small brochure uses. Some religious organizations produce large posters and wall art for their classrooms and maybe it makes sense to charge more in such instances.

PowerPoint presentations

This can be a difficult one. Such presentations are used on and off the Web. They are used by large corporations and individuals giving a single presentation to a small group. It may be better to give the corporations a break on this one and say any PowerPoint presentation. It could also be limited to personal use and organizations with fewer then 10 employees. Then require larger organizations to pay a slightly higher fee for their use.

Non-profit organizations

The first instinct is to make images available for the lowest price to registered non-profit organizations. However, we should keep in mind that there are 1.4 million non-profits registered with the IRS. Only about 450,000 of them have enough revenue to require reporting to the IRS, but in 2005, these “reporting organizations” had $1.6 trillion in revenue and $3.4 trillion in assets. Should the big ones get images for the lowest price or should they be charged more?

Ezine

If such publications are earning revenue through either advertising or subscription, or if they are promoting a product that is sold, should they get images for the lowest price or should they be charged a corporate price?

A large portion of the uses described above can be satisfied by simply limiting the file size delivered. In effect, that is exactly what microstock is doing today.

The difference is that microstock pricing is letting commercial users have the images for the same low prices. Professional photographers would like to see these commercial users pay more, given the value they will receive from using the image.

Personal wall art

There is at least one personal use where a larger file is needed — wall art. The question is whether this kind of use should be encouraged and at what price a file sufficient to make a good quality print should be supplied. A huge number of people buy lithographic prints to decorate their homes and offices. They want one copy, not many. If it were easy for customers to choose from every high resolution image online rather than a limited, edited selection, a lot more images might be licensed. What is a reasonable price?

I’d like the input of Black Star Rising readers on these ideas — and your specific thoughts on what should and shouldn’t be included in the category of “small use.”

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14 Comments (Open | Close)

14 Comments To "Let’s Create a Two-Tier Pricing System for Stock Photography"

#1 Comment By Teach_J (Robert Courtemanche) On April 15, 2010 @ 12:55 am

I like your argument, but if I am a small microstock photographer, why would I ever agree to what you are proposing? If I can get a big company to use my microstock image and get paid for it, the I will do it. I'm not beholden to any photographers guild or agency. I don't make money from my photos to make a living. I also get a lot of prestige from having my photos on a big corporate web site. I just don't see this working out unless you can find some way to pressure the microstock sites themselves.

#2 Comment By Todd Klassy On April 15, 2010 @ 1:23 am

Unfortunately, I think the ship has already sailed. Too many photographers, amateurs and pros alike, have whored themselves. And the stock photography agencies have been willing participants in the Walmartification of the stock photography industry. They only way photographers can win now is by eliminating the middleman--those companies who have helped set the stage for this fall in the first place.

#3 Comment By Joshua Thomas Zytkiewicz On April 15, 2010 @ 1:44 am

I really don't think wall art should be included. If you're selling a digital file so that a customer can make a physical print, why not just sell the physical print?

#4 Comment By Will Mc On April 15, 2010 @ 11:53 am

I agree with you all the way to the Wall Art. Giving a guy/gal a file big enough to print means they can print it as many times as they want without you, me, ImageTracker or ImageExchange tracking them.
I've seen photos being sold like this.

#5 Comment By Pete On April 15, 2010 @ 12:06 pm

Supply of stock photography is far, far greater than demand. Digital technology has enabled a million new suppliers, and the internet has enabled markets for this new supply. Good quality digital pictures are a commodity.

You can't impose rules on the stock market any more than you can impose rules on the grain or coffee markets. Oil suppliers have exerted influence over their commodity price through cartels. But that only works when there are a limited number of suppliers. Not the case with stock.

#6 Comment By Daniel Kevorkian On April 16, 2010 @ 6:41 am

Here it gets philosophycal, the arguement, well explained as a law treatise, is lacking an element well displayed by the first comment to this thread:

Are human being respectful of each other's life? NO

Profession? NO

Work? NO

Given this facts it's hard to think that any self-regulated business environment as well as desirable is quite unrealistic, look at the liberal ideology of a self regulated market, where it has all of us brought.

Amateurs have come into the photo world covering a leading role now, to the point that many factories hire non professionals to take pictures for their catalogues, it's a fact.

Not farther in time than yesterday a colleague stopped me while I was unloading my car from the equipment used on a on location shooting, asking me for some work or a help to share the expenses of his (once) well launched studio, nowadays his clients are using internal resources to produce the images needed.

Quality, as stated in a previous article, is a hardly perceived matter, that sometimes clients are educated to see, but usually it's our deed to raise the bar of knowledge. But still, we have to deal with the fact that, with the "democratization" of photography, the market has shrunk and also to technically provide a better product, sometimes the investment in equipment, is not worth the outcome.

In this new millenium reality has changed drastically, to adapt and multitask, in my opinion is the only way to survive.

#7 Comment By Peter On April 16, 2010 @ 2:22 pm

We've written a response entitled, "Let’s NOT Create a Two-Tier Pricing System for Stock Photography" on our blog.

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#8 Comment By Chris On April 16, 2010 @ 6:13 pm

Jim, I think you are absolutely spot on and I have been thinking along the same lines for a while.

I have often been misunderstood on my stand against microstock, but my stand is NOT against the *price* of microstock, it is against the *open-ended license* at a tiny price.

If you have a system whereby personal use of small images is cheap, but for business use the price is higher, this puts microstock sites on the back foot. You are now cutting into their 'personal' sales (as they have no advantage on price on these) while you earn way better than them on the serious business uses.

#9 Comment By Teach_J (Robert Courtemanche) On April 16, 2010 @ 7:11 pm

I understand the argument about licenses. But unless you are talking about passing actual legally binding legislation to force a tied license system, I doubt you could get all the microstock sites to agree to this system. This is just like the argument to charge for newspaper content. If there are holdouts that refuse to do it, then there will always be a place to get cheap microstock photos and undercut "professional" photographers.

I understand the need to make a living. But just as newspaper and television reporters are finding out, the internet has leveled the playing field. Amateurs now have the same opportunities as professionals, and many are just as good. Some will charge much less, even give away their work because they have a reliable source of income elsewhere and do this for the sheer love of it. It may not be "fair," but it is no longer possible to enforce scarcity when it no longer exists.

Back in the day, pro photographers could charge a lot because the gear and training costs a lot and was hard to get. Digital has changed that. The gear costs less and amateurs now have access to distribution channels via microstock and sites like smugmug and flickr.

#10 Comment By Charlie On April 17, 2010 @ 2:07 pm

I bought a wrench and a screwdriver recently and when I opened the hood of my car I figured out how to turn a screw and tighten a bolt.

Does that make me an auto mechanic?

#11 Comment By Andrew On April 19, 2010 @ 6:51 am

Like several others here I agree up to the point of wall art, as a fine art landscape photographer my work is mostly personal wall art. I would rather prefer not to see photography as art devalued any more than it already has been.

I am wondering if the creative commons licensing already covers the other uses mentioned - I am certainly happy for my work to be used without charge by non profit making charities as long as my name remains associated with the images.

#12 Comment By Robert Twizell On April 21, 2010 @ 2:45 am

I think that there is value in the exclusivity of an image, so for some images their value is greater if they don't appear in a variety of places.

I disagree with a general allowance for non-profits to use images for a low price. In some cases non-profits are deserving, but remember that they have to pay other professionals for their services. They have to pay all sorts of creatives, tradesmen etc. why should photographers be an exception? Also take a look some time at what the employees of that non-profit are earning. In general they are not doing that job simply because they feel charitable about it, they expect to get paid.

The future for professionals is to sell images that don't look like cheap microstock images, and to market them directly at a premium price. I don't see any advantage in earning $500 a year from small sales when I should be concentrating on my $1000 and up a time stock sales.

I've just signed up with the PhotoDeck.com beta which is going to be a great way to sell stock imagery directly. I've tried a few other services, but I think this one will be a fantastic way of cutting out the middlemen providing you have a high quality and targeted set of images to sell.

Time and again in the last year I have had calls from designers and image buyers essentially asking me for rates for commissioned photography who are telling me 'we have scraped the bottom of microstock' or even 'we have scraped the bottom of Getty'. They are fed up with the uniformity of look, style, content and want something else. The vast buckets of boring and similar pictures on top line as well as microstock sites means there is a burgeoning market for good, different, professional photos. Let the small users go ahead and use the free images with creative commons licenses from Flickr while the pro's build a business which is differentiated in quality and content from the great soon to be unsearchable image buckets that are out there.

#13 Comment By Stuman On May 14, 2010 @ 11:47 am

I think there is still a place for the management of the highest quality images, especially those with an art angle. In my opinion microstock likes or has created a niche for a certain "generic" look. But the high end art look still is getting well paid. As long as Microstock wants the "generic" look, it means that the rest, the particularly artistic bent is still available. I think this is all pushing photography to a new level. Thats good. What it means then is that there is room to add value to whats left. I think that many photographers resort to microstock because its hard to get into the big guys like Corbis, Getty etc. So, they go for what they can get into. I think there is a market for editors/agents to help sort these different kinds of images out and make connections for photographers. This is where a two tier idea could work, but it would require a union of effort or some kind of co-operative or common understanding to make something like that happen. That requires an entrepreneur, not just an idea to make it happen.... any takers?

#14 Comment By Scott Webb | Nuwomb On March 27, 2011 @ 9:35 am

There are interesting models of using creative commons for use on blogs and personal wall art and such. It's a way of getting your work out there and getting it spread everywhere - faster.

On istock you can get websize images on the cheap and serious bloggers will go pay for that easily. Serious bloggers don't want to spend the time searching flickr or google images for something of quality. It's so much easier to pay the few bucks on istock than it is to search.

I think the time saving factor needs to be driven into everyones heads and they might not worry so much about the cost.

Things like this with stock photography though make you start to adjust and change. This is good. If something were to stay the same, then there would be no innovation or advancement.

Photographers have to innovate and think about how they can change to make use of the situation or benefit in new ways.


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