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Is Stock Footage as Lucrative as Stills?
Posted By Jim Pickerell On June 22, 2007 @ 5:19 am In Video and Multimedia | 2 Comments
After Pat Hunt’s story on Tom Grill and his daughter Jamie , one reader said, “If Grill is a ‘marketing genius ahead of the pack,’ why was there nothing in the article about footage?” This photographer believes that with the current over-supply of stills, and looking to potential future needs, there is greater opportunity in footage and wondered why Grill and his daughter aren’t moving in that direction. I put that question Tom; here’s his answer:
Funny you should ask. Jamie and I are right now preparing to do footage. In fact, Jamie’s boyfriend, Reuben Atlas, is a documentary filmmaker and is teaming up with Jamie to begin shooting stock footage this summer. I will be doing it independently later this year.
I actually shot film in my very early career. Consequently, I don’t expect the transition to be too difficult, except that now everything is digital so I have to relearn some techniques.
We already have specific shoots in the planning stages. The trick is what to shoot at this stage. The field is wide open, but that should not be construed as a license to go shoot anything. We will be concentrating on RM, which requires more high-end equipment, but is more lucrative that RF. We have some ideas that I think will be successful during this infancy stage of footage.
It has only been recently — and by that I mean this past year — that stock footage has moved to a position of being as lucrative as still images. That is the main reason I have remained on the sidelines observing the growth of film. I always enjoy jumping in at the beginning of a new movement in stock. That’s when the real money is made and when a shooter can stake a claim. But timing is everything. You don’t want to jump in before the market is lucrative. On the other hand, you don’t want to enter the field so late that all the main image subject slots are filled up.
While I do think that footage offers a new potential for young photographers, I don’t feel it is necessary to shoot both footage and stills, especially for a beginner. Sometimes this can be distracting and result in neither one being done as well as it should be. Footage does, however, open a completely new field that has the potential to disperse some of the excessive energy that is now pouring into stock photography and resulting in a heated up competitive marketplace. Having a footage outlet will, hopefully, offer another avenue to absorb the heavy traffic of new photographers entering the scene.
While I agree with much of what Tom had to say, I questioned the statement, “It has only been recently — and by that I mean this past year — that stock footage has moved to a position of being as lucrative as still images.”
I decided to talk to a shooter who has been producing video for Image Bank (now Getty Images) for more than 15 years. This shooter prefers to remain anonymous, but he has a somewhat different take on the profitability of the footage business. He also sees more current demand for RF footage rather than RM, but RF footage is selling for half the price, or less, of RM. Thus, you’ve got to sell at least twice as much of it to generate the same revenue.
He shoots both stills and video, although not necessarily on the same shoot, and tends to concentrate his efforts on the type of work that produces the best return. For the moment, that is footage — but so far he doesn’t see evidence that footage sales are really taking off.
When he started shooting footage in the ’90s there was a slow build, but by the end of the decade footage shoots were producing two to three times what he was earning from still shoots. In ’98 or ’99 when computers and the Internet were going crazy, he did one video shoot of people at home using high-tech devices that cost about $10,000. Within two years he made over $100,000 from that shoot. However, remember, this was at the peak of the Internet boom.
Getty acquired TIB and its film division in 1999, and at that time it was reported that TIB’s 1998 footage sales were $24,835,272. It is believed that Getty’s total footage sales skyrocketed over the next couple years and had risen to approximately $40 million in annual revenue in 2001 before 9/11.
After 9/11 and the Internet bust, there was a significant drop. Most of the corporate use of stock footage, which had been about 30 percent of the total, disappeared as a result of cutbacks on business travel and meetings. Ad sales also declined. Meanwhile, the cost of producing footage continued to increase.
According to my source, the days when you could get a 10 to 1 return on investment have disappeared. Now a 5 to 1 return would be good, and that might take 3 to 4 years instead of 2. Overall, this photographer’s revenue is still down from where it was at the peak. And not only has his overall revenue declined, but his profitability has declined even more due to rising costs.
Meanwhile, after it hit bottom Getty’s revenue started growing again. In 2003 Getty’s revenue from footage was $29.68 million; in 2004, $33.3 million; in 2005, $38.11 million and in 2006, $43.19 million.
My source feels that competition hasn’t been a big factor in his overall decline in revenue. He says some new people have entered the market, but others have dropped out. The cost of production has gone up, but the usage hasn’t changed all that much and the average price the customer pays for RM footage has stayed about the same.
A couple years ago, as the cost of production days were creeping from $10,000 a day to $20,000 to $30,000 a day, he decided to put more energy back into producing stills, hoping that the combination of his existing footage collection plus stills would bring his revenue back to where it used to be. That didn’t happen, and now he has gone back to focusing on footage because it is still the most profitable thing he does.
In the ACSIL survey published in April , it was estimated that total worldwide revenue from stock footage in 2006 was $282 million. The survey also estimated that 90 percent of the footage (representing about $28 million in revenue) was originally shot for some purpose other than stock, such as a TV or a major film production. In these cases the footage was re-purposed as stock to earn some extra income. That income did not have to totally cover the cost of production plus profit as is the case with footage shot specifically for stock. The advantages those that are producing the 90 percent have is that someone else, or some other project, has covered all the costs of production.
Getting into film is a risky business compared to stills. The price of entry for film is very high compared to stills. Now, Getty requires that everything be delivered in HD. In the good old days you shot film, processed it, and did a one light transfer to Beta SP. Getty would then edit and re-transfer to HD. Now in their rush to cut overhead, they are requiring the filmmaker to supply everything as a finished HD element — before editing. Instead of being able to transfer stuff at $300 an hour, it is now $600 to $800 per hour. Of course, the royalty percentage is not adjusted in any way to account for the additional burden on the filmmaker.
So it seems that while the return per shoot may be better on footage than it is on stills, the cost of productions, the capital at risk, the steep curve in learning how to shoot footage effectively, and the lack of assurance as to where the market is really headed are all reasons for moving very carefully. On the other hand, the option of sticking with stills doesn’t seem to offer a lot of future potential for photographers either.
[tags]Jim Pickerell, stock footage, Getty Images, Tom Grill[/tags]
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URL to article: http://rising.blackstar.com/is-stock-footage-as-lucrative-as-stills.html
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 Tom Grill and his daughter Jamie: http://rising.blackstar.com/comstock-founder-tom-grill-continues-to-adapt-to-change-2.html
 ACSIL survey published in April: http://rising.blackstar.com/new-study-offers-valuable-insights-into-stock-footage-industry-2.html
 : http://www.stockproducer.com/selling-resources/where-to-sell.html
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