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February 03, 2006

What Stock Business Model is Right for You?

By Pat Hunt

Where to you fit into the stock photography scene? Do you travel, shoot assignment, work with models, or chase events as a photojournalist? In today’s photo environment you need to consider stock as a possible revenue source in your diverse business plan. Over the last decade it has swept the photo world and engulfed a major client base formerly guarded for the assignment pro. The trick is – where do you fit into the numerous business models?

Last fall, Pat Hunt, Vice President of Index Stock Imagery and Managing Editor of MacTribe, conducted one of Photo Plus’ most successful seminars on: “What Stock Business Model is Right for You.” The Moderator, plus the panel of stars, spent two hours covering the scope of their company’s business ventures to help guide you through the maze of opportunities. Whether you are a seasoned pro or just a ‘wanna be’, their overview is a valuable guide. The following dialog represents highlights from their presentations.

Christina Vaughan is the founder and CEO of Image Source:

“We are the world’s leading producer of high end Royalty Free (RF) imagery. We were founded in 1999 and we are a global company although we are headquartered in London, England, with offices in New York and Germany. We distribute our collection through about 200 outlets in over 70 countries. We are the only Royalty Free company distributed by Getty, Corbis, Jupiter, and Adobe, as well as over 196 other outlets. Any photographer today who wants to be commercially successful has to be trading in RF images. Six out of every ten stock purchases made today are made on RF images. Photographers today are getting a better return on investment from RF images. We at Image Source have already raised our prices twice this year. The quality is exceptional and the technology has made it possible to offer RF to a broad range of image uses. The 70 countries in which we distribute offer a lot of marketing for your images. Technology allows us to do that. A photographer must work closely in line with our agency, and every picture represented by Image Source is exclusive to Image Source.

Success is about getting shelf space and exposure, and about heavy marketing. The question for you as photographers is which RF company is right for you. That comes down to what is the relationship you have in mind and what are you looking to achieve; what sort of investment are you willing to make; and what is your level of creativity. If you are willing to make an investment in RF you can get a good return on your investment.

At Image Source we have zero attrition rate, as we have never lost a photographer. Also we have one of the best records in the industry for staff retention. It’s key to work with people whom you know are going to be around, and have the expertise. Does your agent have fundamental business practices; does it have integrity; are they honest; do they pay your royalty and do they pay them on time? What new markets are they looking for? In Europe, for instance, we are still experiencing huge amounts of growth in RF. The US is the single biggest market in the world for pictures, but all the growth is coming from Europe. Beyond Europe there is Russia, predicted to have the largest growth in advertising revenues in 2006. New markets are opening in China, India and Japan. Our success has been based on creativity, commercial success, people and communication. We are very very passionate about what we do.”

James Alexander is the Director of Adobe Images:

“I think the session should really be called - what business model is right for your customers? The process of being creative has never been more complicated. This has reduced the amount of time that creative professionals have to focus on image acquisition. The creative designers move faster and their budgets are tighter. Rights Managed (RM) is one of the greatest models in the world for photographers and for creative professionals. There is no other model, which allows a creative professional to know where an image has been, how it has been licensed in the world and if you can license an exclusive for that image. RF is also a valuable model for creative professionals with a different set of needs. It might be speed and being able to do a license at 3:00 AM with a credit card. Subscriptions are viewed as a threat to this audience, but the reality is that creative professionals need a model where they can license many images very quickly and they can be used in rapid succession.

Adobe offers the tools to create those designs, whether it’s video, or Flash, or websites or the printed page. Workflows are getting more complicated. So for Creative Suite 2 we decided that we were going to make image acquisition really easy. CS2 allows creative professionals to reach photographers directly through the photographer directory, which lives in the Bridge. We originally partnered with trade associations to populate that directory and we now have about 2500 photographers globally.

We have also looked at enabling access to Rights Managed collections, and we have a directory page of photographers who have RM collections. However the thing that is most exciting for Adobe is our RF offering built into the product. We add metadata about the image that follows the image, while dragging the application from Photoshop to Illustrator to GoLive, and we track those images for you to enhance your workflow. Now we have 450,000 images, and we have developed a strategy for photographers to get into the application directly by going to Image Source, Masterfile, IPN Relay or Getty and talk to them about getting your collections represented for RF.

As a creative professional, you can come to the browse page and be able to search through predefined concepts. We keep previous searches in folders, plus downloaded comps and purchase folders. We remember all the searches and cache the thumbnails. You can do an advanced search for a specific collection, B& W or illustration. We also track all the licensing information for you, and we keep a copy of it on Adobe servers so you never have to track down your agreement. You are one click from opening an image and downloading into PhotoShop. We do provide images for composition at no charge. You can actually reduce the Bridge to a floating pallet over your composition so you can just drag and drop right into your document. There’s a function called Preflighting, which allows the creative professional, before they send that file to press, to make sure all the fonts are in the file. You will get a warning about the low-resolution photos in your comp that says you have to purchase the image, and you can purchase it right in the program. You will come back to the Bridge and put it in the shopping cart, log in, buy and download. I think this will help grow the stock business. Our view is about helping the creative professional be successful and making their workflows much easier.”

Patrick Donehue is the Vice President of Photographer Relations of Corbis:

“We offer Rights Managed, Royalty Free, editorial, commercial, and some celebrity portraiture. The client’s view is the most important thing for us. The best way to approach what business model is right for you is to come to an understanding that the best model is the model that will make you the most money. It’s great doing art and personal photography, but we need to be making pictures that people will use. The business is about a two billion dollar business, and about 75% is in the commercial sector, meaning advertising, graphic design and corporate. Globally 72% of the business is in five countries. In descending order they are-The US, Japan, Germany, the UK and France. The 28% is interesting because there are emerging markets that are critically important and are growing very fast. The Asian countries and India are extraordinary and are growing at a very rapid pace.

At the International PACA meeting this fall, a gentleman from MIT, who runs the media lab, addressed us, and he said something that is extraordinary. There is an initiative to develop $100 laptops for the emerging third world. Countries like China and the developing countries are all over this. Last year I spent a lot of time talking to Creative Directors at ad agencies in Asia, like J Walter Thomson in Singapore, Kuala Lumpur, and Taipei. Even the guys that work in the same companies don’t all agree about what kind of pictures they like and what kind of distribution they like. This all boils down to understanding the client. You have an amazing edge if you have talked to a designer, or photo editor in the last few months. The best way to determine your stock model is to ask your clients. Understand the workflow and demands of a designer. Traditionally there have been issues with the emergence of RF. I have to tell you THAT IS OVER. There are no issues and if you are not playing in that category, you can kiss off 50% to 79% of the market.

What are the common attributes of very successful stock photographers? You cannot make pictures without spending money and photographers have to be early adopters to technology. This business is a phenomenal business to be in. It’s cool to make a lot of pictures, get them in the proper distribution, and get a check every month. That’s a huge deal, when you get sick or can’t work for a while - you still get paid. Remember market requirements change, and you have to be well positioned to deal with those changes and hear the voice of the client.”

Brad Kuhns is Co-founder of IPNstock.com:

“IPN stands for the Independent Photography Network. We started IPN in 1999 building websites for photographers. Some photographers have a need to go directly to their own clients. We started sharing pictures between sites, so photographers could represent each other. In 2003 we were acquired by VNU, the parent company of Photo District News, PhotoServe and PhotoPlus. We can set up web sites that are very capable, with search engines, and e-commerce lightboxes. We build websites and for those that already have site, we add our technology behind your design. This allows you to sell directly to your own clients, to show portfolios, to fulfill assignments, and to broadcast your images to clients. Our portal site provides a place that clients can come and visit, see a broad selection and work with a sales force, as we are making sales for the photographers and doing promotion.

Many of the sites have a very distinct look and feel. Each one has its own branded design. The photographers who get sites from us also get the caliber that big agencies would use. We also have other components that help you solve your archiving need. We provide tools that allow you to do batch captioning. We can read the data out of the IPTC, which is information embedded in the image, and we also have a keyword tool that we are proud of.

Another application for our solutions is assignment photography. You shoot images, you upload them to our servers, and we back them up with redundant storage at different locations. Once you upload all your high res, we produce all the thumbnails and the preview images and the captions. We wrap your branding around the webpage that delivers the assignment. So your client gets a secure encrypted link to see the assignment of that day. Once those images are clear for the client you can click one button and turn them all online for stock.

IPNstock is a Rights Managed portal site and we plan to keep it that way as long as we can. Our asset in this business is the members we have. We don’t have any wholly owned content and we don’t plan on it.”

Paul Banwell is Director of Photographer and Filmmaker Relations for Getty Images:

“We are a very customer focused business. Through creative research we actively try to anticipate what trends will be in the future. Our customers are advertising agencies, design houses, publishers and primarily business-to-business companies. We have a global network, which includes offices in over twenty countries, and we have an agent network as well. We do business with about 100 companies worldwide. We have just launched a fully localized Japanese language website, and we have GettyImages.cn for China coming out.

Our artists often work in a collaborative way, and are art directed and working to a brief to meet customer’s needs. There is an exception, which is the Photographer’s Choice Collection, where photographers place their images on GettyImages.com, in return for a placement fee.

The majority of photographers shoot self-funded RM imagery or RF imagery, and we also do commissioned work where we bear the cost and offer a day rate. The photographer gets a much lower royalty rate but still retains the copyright. There is Photo Assignment where we work directly with clients and work as the middleman. On the editorial side we work with freelance photographers and also employ some photographers directly as staffers.

I don’t think that photographers should get hung up on the specific royalty rates. It varies so much, according to your work and your style of shooting, and what’s appealing to clients. We think that GettyImages is the most powerful global platform for being able to sell images. We have about 2.3 million unique visitors per month.

We are trying to grow every single part of our business. RF, however, has the fastest growth, and we see that trend continuing. If you consider the mobile market and images on cell phones and PDA’s, that is never going to be RM. So, if you can get into both areas, that makes a lot of sense. If you are interested in working with Getty, you can go to Gettyimages.com/contributors.”

John Lund is a Stock Photographer, Author and Lecturer:

“I have been shooting stock since 1990, and I have been using Photoshop since 1990. We have been totally digital for quite a long time, as I started doing digital capture in 1995. I want to collect a lot of royalties and I want to have peace of mind. My business model is to work with agencies, and to diversify. I invest my time and my capital in creating assets, which are stock photos. I have multiple agencies, and I work with Getty, Corbis, Workbook Stock, and Blend. Blend is a new agency of 22 photographers. Working with agencies has a lot of positives, and one is that they do provide ideas. The agencies have so much research, that it’s really a good thing to get the ideas from them. Art direction can be important, and you can go through about 12 different versions before your agent will take something. I find that usually the result is better after I have been art directed.

Also agencies have the biggest audience. You can have the greatest images in the world, and if no one sees them, they’re not going to sell. I have had numerous instances where an agency has turned down an image, and the next agency will use it for the cover of their catalog. That’s another reason to diversify with agencies.

It can take six months to a year before income starts to come back from an image. It can take years before you make a living. Use your creativity for how to get them made when you don’t have the resources. If you do what an agency tells you to do, you will make money. I also diversify through genre. I do conceptual photography; I do lifestyle photography; travel photography and also this thing that I call retail photography.

I diversify through business models, creating both RM and RF. In the case of RF, I will tend to shoot more images. As to which are RM and which are RF, in general my rules are - if the application is obvious, and the uses are many, it tends to be more of an RF image. If the application is less obvious, then it tends to be an RM image. My lifestyle images tend to be RF.

To recap - Multiple agents, multiple styles, multiple business models of RM and RF and different genres, provide me with security and lots of money. Working through an agency allows me to relax, and to enjoy my career.”

James West is CEO of Alamy:

“We are celebrating our sixth birthday this month. A quick summary of what Alamy does:
We sell other people’s images. We are a market place for other people’s pictures. Today Alamy represents around 3.7 million images. We add 200,000 new images every month and we have over 5000 photographers. We have over 300 stock agencies that are RF, RM, production houses, historical archives, museums, university departments and a wide range of material.

Our suppliers are responsible for choosing the license model they want to sell. Today around 70% of our material is RM and around 30% is RF. I would say that 42% of our revenue is from RF. We sell to advertising agencies, corporate marketing departments, newspapers, magazines, publications, and anyone who uses images. Our main markets are the US and the UK. Last year we opened an office in India, which is a very interesting market for us. It’s close to China and we are looking very carefully at that market.

Alamy is all about getting the customer to the picture they need in the shortest space of time.
At least 50% of our transactions are assisted. Half of our sales are online, but often customers call us. As a contributor to Alamy your responsibilities are to edit your own material. The only criteria we have is quality, by technical standards. You must also keyword and caption all the images you send us.

In the future we will be telling you what’s happening with your images on a per image basis, what was your measure of success in the market and how you are doing against the average contributor on the site. We give you online sales reports. You can go online and see yourselves in real time. We also pay 65% royalties on all sales, and we only accept digital files and they have to be 48MB and above. Alamy.com/contributors is where you can find this information.”

Alexis Scott is CEO of Workbook Stock:

“We are very very different than everybody here. First of all, we are 27 years old. We have a coop service for an assignment photographer who values a traditional photographic relationship. These commissions are 50%/50%; the artist supplies the imagery and we take care of the rest. We license the images through our own site, as well as being a third party through Getty. We edit tightly and we have a reputation as a high end advertising collection, with a certain look. We have a private access area for each individual contributor, where he/she can go and see how their images are doing.

If one is looking for stock on our site, they can look at an assignment portfolio. We are balancing this between assignment and stock, both RM and RF. We have approximately 200,000 images and 50% are RF. We also have the online service. This is broken down into two divisions – co-exclusive imagery, which allows you to license your own images on your own web site and to license images on our web site. We also have nonexclusive, which means ‘put the same image everywhere and just see what happens.

We have 62 stock agencies on our site, and 330 coop service photographers. There are 339 individuals on the online service. We have 80 APA members, who get a higher percentage, and we have 11 RF providers. There is also a print product, The Workbook, which has been out for 27 years. We sell to approximately 600 photographers with about 1100 pages, and the book itself is online. When you get a spread in the Workbook you get a portfolio included with the price of your add. We have a ‘self managed’ portfolio, and you have a library of 20 images that you can change out at any time.

There is a division called “Framed”, which is art for spaces. This is a print product, which is also online. It has a different distribution to corporate art buyers, interior decorators, architects, hotels, restaurants, and office buildings. We also have a Phone Book which lists 40 to 50 thousand names of advertising agencies, design studios, the people at the ad agencies, as well as a listing of photographers, illustrators, reps, stylists, hair and makeup, and production facilities.

We have Workbook Resources, which is a list of all the contests and events. Also with Ad Finder art directors and art buyers can call us looking for a certain style or photographer. We get about 40 calls a day. Our Mailing Lists comprise custom and instant lists. Our lists are the most up to date and verified of any list buyers, and we verify every day. This is who we are and we are very very different!”

Pat Hunt is Vice President of Corporate Relations at Index Stock Imagery:

Final comment by Moderator – “Index Stock is a medium sized agency, based in New York City. We specialize in RM and RF imagery, as well as Subscription, Consumer, SoHo (Small Office Home Office), editorial and commercial photography. Know your talent, your funding, your passion, your timing, and your goals for the future. Best of all, love what you do.”
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Pull quotes:

-“Any photographer today who wants to be commercially successful has to be trading in Royalty Free images. Six out of every ten stock purchases made today are made on RF images.”

-“New markets are opening in China, India and Japan.”

-“ It can take six months to a year before income starts to come back from an image. It can take years before you make a living.”

Sidebars:

The Panel:
James Alexander - Director of Adobe Images
James West - CEO of Alamy
Paul Banwell - Director of Photographer and Filmmaker Relations of Getty Images
Patrick Donehue – Vice President, Photographer Relations of Corbis
Alexis Scott - CEO of Workbook Stock
Brad Kuhns – Co-founder of IPNstock.com
Christina Vaughan – CEO of Image Source
John Lund - Stock Photographer, Author and Lecturer

Moderator - Pat Hunt, V.P. of Corporate Relations at Index Stock Imagery,
Author and Lecturer and Managing Editor of MacTribe

And

(RM) Rights Managed (Rights Protected) Imagery is licensed via a pricing model that tracks the client usage in order to retain the right to charge higher prices for restricting that usage to a particular industry. Pricing is determined by negotiating various parameters such as print run, image (file) size, distribution, placement, and image sophistication. For example: “One time, non exclusive, North American, two languages, text book, ¼ page, inside, OR Advertising brochure, ½ page, inside, two million print run, one year, non exclusive, world wide.

(RF) Royalty Free Imagery does not restrict rights of usage and can be published in perpetuity by the licensing client. RF is usually offered in three or four resolutions, which limits its usability and determines its price. Average examples: Low resolution price range for 2 MB file - $59 to $129; medium resolution for 10MB to 18MB file - $179 to $289; high resolution for 30MB to 50MB file - $249 to $359; and a super hi res at 70MB+ for $359+. Range of price for a disc of up to 100 images - $399 to $599.
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Info Box:

Adobe - www.adobe.com
Alamy Images - www.alamy.com
Corbis - www.corbis.com
Getty Images – www.gettyimages.com
Index Stock Imagery – www.indexstock.com
Image Source – www.imagesource.com
IPN – www.ipnstock.com
Workbook Stock – www.workbookstock.com
John Lund Photography - www.johnlund.com
MacTribe – www.mactribe.com

Writer contact info – Pat Hunt – path@indexstock.com and path@mactribe.com

Posted by Pat at February 3, 2006 09:17 PM

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