Has Demand for Microstock Photography Peaked?

In May 2009, I began following the sales of 198 of iStockphoto’s top contributors. According to iStockcharts data, these 198 ranked in the top 250 image sellers among the microstock site’s more than 100,000 total contributors.

The term “contributor” is more accurate than “photographer,” because a significant number of iStock’s top sellers are illustrators and graphic designers selling illustration, not photography. In any case, over the past 14 months, some of the 198 have risen to higher positions in the top 250; others have declined as more aggressive producers have moved up.

Some Hot, Others Not

The lowest person on my list, Skashkin, had more than 47,000 total downloads and between 5,033 and 6,033 total downloads from May 1, 2009, to June 30, 2010; he now ranks 347th. Yuri Arcurs, the No. 1 producer, had between 357,574 and 367,574 total downloads in the last 14 months.

Some contributors really climbed the rankings. For example, Monkey Business Images went from 254 to 37, despite its relatively late arrival to iStock in March 2008.  Today, Monkey Business-produced images have been downloaded over 180,000 times, with a total of more than 128,000 downloads in the past 12 months.

The 29,475 contributors whose information was listed on iStockcharts as of July 1, 2010, had more than 23,570,469 downloads in the last 14 months. This group represents 6,279,767 images — 89 percent of iStock’s overall total of 7,063,000.

The remaining 11 percent of the images on the site are spread over more than 70,000 contributors that iStockcharts does not identify. Though this group makes up some 70 percent of the iStock contributor pool, portfolio size (an average of 11 total images) and download statistics suggest that most of them are largely inactive. In contrast, the portfolio sizes and downloads of the top 198 contributors likely provide an accurate picture of iStock sales trends.

Flat Results

Some of the numbers available for iStock are very precise, while others are ranges. Until May 2009, iStock visitors were able, at any moment, to determine the exact number of images licensed in each contributor’s career.

That June, iStock changed its reporting to supply only the nearest lower rounded number of downloads, with the actual number varying by as much as 10,000. For example, a number listed as “greater than 100,000” could mean anything between 100,001 and 110,000. If the contributor’s total downloads are fewer than 100,000, the range is 1,000 downloads.

Estimates presented here were calculated by determining the minimum and maximum number of downloads each contributor could have had for the entire period. We subtracted the May 1, 2009, number from the July 1, 2010, number. Then we divided by 14 to determine the average monthly low for the 14-month period through June 30, 2010.

We did a separate calculation for the average high based on the highest possible number that could have been licensed during the period. Then we totaled the results for 198 contributors and compared them with the actual May totals. We are aware of a few contributors who have just recently passed the low number, but some could also be very near the top of the range and about to move to the next level.

This method revealed that, compared to May 2009:

  • 55 of the 198 contributors have, on average, licensed more images per month;
  • 69 have, on average, licensed fewer images per month; and
  • 74 were midway in their range —more than the average low, but less than the average high.

Rising Prices

The 198 iStock contributors currently have a combined total of 567,324 images, or about 5.2 percent of the total collection. In the past six months, members of this group have enlarged their collections by an average of more than 10 percent, adding 52,449 images.

Overall, the number of images downloaded for these 198 contributors was 450,593 in May 2009. For the 14 months the average low per month was 417,686 and the average high per month was 491,174. The median is 454,430.

Since this represents 29 percent of total images downloaded, it suggests that sales — in terms of number of units — have been flat for iStockphoto over the last 14 months. Since iStock is unquestionably the largest microstock image seller in the industry, it is reasonable to assume that its numbers represent a best-case industry trend.

It is important to note that, despite flat unit sales, iStock’s revenues have still risen because of price increases. Also notable is the fact that adding more images does not appear to increase unit sales, but may be necessary in order to maintain sales volume.

Hard to Break Through

If I had tracked all the sales of the top 350 (out of 100,000), I estimate that over 50 percent of all the images licensed by iStock during the period belonged to these individuals, who represent less than 0.4 percent of all contributors. While it is certainly possible for a few to earn significant revenue licensing images as microstock, this points out how extremely difficult it can be to achieve that goal.

The reason why 5.2 percent of the images in the iStock collection generate 29 percent of total downloads is the same as it is across other microstock sites: since customers are able to sort results by downloads, previously sold images have a huge advantage. Yuri Arcurs estimates that 80 to 90 percent of customers sort results by downloads.

Consequently, new images are at an extreme disadvantage, irrespective of quality, because they tend to appear at the bottom of the search return order and are never seen.

Some will want to know how much these downloads represent in dollars. Based on information from some photographers, I believe the average gross sale for an image in the standard collection (not Vetta or video) is $6.50 to $7.50. A significant number of these top photographers are exclusive with iStock and thus earn 40 percent of this gross.

Non-exclusives earn 20 percent, but they can and do submit the same images to many other microstock sites. It is important to note that Yuri Arcurs, Andres Rodriguez and Monkey Business Images are among a group of shooters who say they earn much more by being non-exclusive than they could earn with iStock alone.

Lessons Learned

Here are the takeaways based on my research:

  • Sales over the past year have been flat.
  • Images produced by a very small percentage of contributors represent the majority of sales.
  • Despite the widespread belief in the growing use of images online and predictions that such growth will never end, we may have reached a level where all those individuals who are willing to pay money to purchase images at microstock prices are already doing so. They need a fixed number of images per year. They already go to the lowest priced source and are unlikely to buy more simply because more are available.
  • Once a business model has reached maturity — which microstock has — it will no longer grow simply by producing more. The only way to grow is to sell more units or raise prices.
  • It is important not to judge success by revenue increases alone, but to also look at the underlying unit sales growth. Price increases may boost revenues in the short term but drive away customers in the long term. Some will find cheaper or free sources, particularly if Google and Flickr are able to deliver better search results.

6 Responses to “Has Demand for Microstock Photography Peaked?”

  1. Brilliant! As an assessment of the current state of the microstock business/industry, this is invaluable and an invaluable aid in charting a business course for us independent photographers. Thanks a million, Jim, for the analytics and thanks to BSR for posting this!

  2. Jim - I have a poll on my website regarding the future of microstock - note that the current vote is 50/50. I enjoy your columns and your work.

  3. Appreciate your research and insight into this subject, Jim. The most interesting tidbit of information --to me-- was that customers are able to sort search results by "number of downloads" and that 80-90 percent of the time they choose this option...which (if I've understood correctly) means practically everybody is buying the same few images over and over -- despite the plethora of available imagery in the marketplace (?). Why would people prefer to buy/use the same image that everyone else is using...? That makes no sense to me.

    Although I guess I'm assuming most people are using the images for branding/marketing/business purposes, where having a 'unique' image would seem highly preferable. But perhaps that isn't what most people are using microstock imagery for. Is there any available data about the iStockphoto customer (as opposed to contributor)??

  4. Interesting analysis but not necessarily correct. It neglects the fact that big price increases at iStockphoto may have shifted some buyers to cheaper options (including possibly shifting them from top exclusives to second-tier suppliers who would not make it in the top 350). Fotolia seems to be on the rise, Shutterstock is doing well (despite Thinkstock) and Dreamstime is fluctuating, seemingly according to the odd shifts in its search algorithm. Meanwhile, iStock earnings seem to stagnate.

    The pattern is so complicated now that I feel quite unable to disentangle it.

  5. Interesting post from Jim [as always], especially given the astonishing and ill-tempered brawl going on at iStock. More on that at my blog:

  6. In a recent interview, the top selling microstock photographer says his return per image is falling rapidly each year and indicates it will soon become unprofitable. You can read the interview here:
    http://blog.johnlund.com/ And there is more discussion on why this interview will have a tremendous impact on the industry here: http://markstoutphotography.wordpress.com/2011/01/24/tide-turns-on-microstock/

    Bottom line is the microstock business model is unworkable. More and more photographers are bailing on the microstock business model and this is a good thing. The work needs to be licensed at fair prices.

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