These are only a few of the questions posed by professional photographers and those who hope-to-be in today’s rapidly changing and very confusing image market place. However, it is important to pose these questions and research a strategy that is right for you, your lifestyle, your level of creativity and your business focus, as the opportunities are varied and no two photographers are alike. Consider your level of talent, your degree of access, your finances and your business acumen. After that be sure you have the desire and discipline to persevere in a high end, challenging and ever-changing marketplace.

A panel of eight top stock photo business leaders have recently discussed these issues in a New York City seminar focusing on: “What Stock Business Model is Right for You?” This group of luminaries reviewed all the pertinent questions in an audience Q&A, to offer direction and focus to serious professionals. The discussion covers such issues as current pricing structures, submission guidelines, revenue percentage splits, diversification, new image marketing models and International emerging economies.

The prime question is – how does one get access to editors at places like Corbis and Getty if you are just starting out? In response virtually every agent has pages on their site for contributor information, usually adding ‘/contributors’ to the URL. Paul Banwell of Getty added, “We are very honest with you about whether we think your work matches where we’re going.” This means that high end agents can be a challenge to penetrate in today’s competitive environment, where the ante is up for unique talent. Study the needs and styles of the online agents and portals to understand where you might be a fit, and be sure to follow those contributor guidelines exactly, or your effort will be ignored.

The next concern had to do with the difference in pricing models between Rights Managed (RM) and Royalty Free (RF) imagery. “In the last couple of years I notice on my statements an enormous number of RM sales that are selling for considerably less in the US and overseas, for numbers way below what those same people have to pay for RF. Why are agencies allowing this?” Patrick Donehue of Corbis made it clear that, “Overall pricing and sale of images on an average basis is actually holding and going up.” Paul Banwell of Getty stated that in their third quarter the average price of an RF image was about $230, and about $575 for RM. “We have managed to push prices up consistently and you can see these figures quoted in the investor section of Gettyimages.com, as they are public figures. RF is a fixed price according to the file size, so prices are not as low as many photographers expect. For RM, low license fees may occur in particular markets, such as publishing, for example where you might experience a relicense of an image for a textbook. Also images will be priced to reflect the local market. India, for example, is a maturing growth market where you will see sales pitched to what that market can afford. So although we are committed to strong pricing, we have to consider what is appropriate for the market.”

As a follow-up, Betsy Reid, Executive Director of the Stock Artist Alliance, www.stockartistsalliance.org , inquired, “I would appreciate your helping photographers understand why they can expect to receive such a significantly lower percentage of the licensing revenues when they give you an RF image as opposed to when they give you an RM image. Most RM deals, other than Alamy, which is at 65%, give the photographer 40% to 50% of the license revenues. If there is a subagent involved it can drop to 25% to 30%. But, with RF, I think the top is probably about 25% when you license directly. Most of the licensing is done through sub distributors, so the photographer is probably getting about 10% to 15%.”

Banwell of Getty Images responded, “Volume sales can’t be ignored. When you think about return on investment, it’s important to calculate how much you spend to make the pictures and how much you get back. It’s all part of the mix. When you look at the royalty split, in addition to your return, it is important to look at what your agency does with their part. At Getty Images there is great investment in growing markets, expanding in non-English speaking markets, and in developing localized websites. Consider if your agency is static, or is it using its portion of the split to grow the market.” Donehue of Corbis added, “Some photographers are doing extraordinarily well in this business right now. You can do exceptionally well if you diversify. If you don’t, you are dead. The RF vs RM thing has been going on for a long time and that argument is over. I have watched RM photographers spiral downward and they will continue to do so as long as the market is demanding more innovation and a greater array of services.”

Randy Taylor of StockPhotoFinder, posted the question, “Is the Stock Photo Industry growing or shrinking?” Christina Vaughan of Image Source elaborated, “I think it’s growing because there are lots of new opportunities with new types of sales, such as wireless PDAs , cell phone usage and International emerging markets. Every business that is going to survive has to reinvent itself every day, and every day we have to look at ourselves and ask if we are being fair and making the right investments to grow business for our photographers. We put a lot into our creative side and maintain a large staff which is just looking at creative trends, and working very closely with our photographers. There is a art director on every set, looking at the personality of the photographer and how we can carry that to the market. If you work very closely with your agency you have a hot line into what’s selling. We are in the two biggest markets in Europe, Germany and the UK. They are very different. An Art Director at Image Source can tell you why it’s different and what you should be doing to maximize your sales in those different markets.”

The issue of diversification is an important one. One audience member offered, “If I have 100 images to place in the market, I have to make an RF or RM choice for each image. That is an irreversible choice. If I release an image into the RF stream, it can never be an RM image. Therefore I may never get that $15 to $18K sale. What is the best method to determine these choices?” Alexis of Workbook Stock replied, “you can start with an RM model and wait for awhile. If the image never sells you can change it to an RF… However, you can’t go in the opposite direction. James West of Alamy adds, “The Internet offers us a fantastic opportunity to try things at a much faster rate than was possible in the days of the catalog. Depending on the relationship you have with your distributor, you can try both, and after six to twelve months you will have very clear data as to which one has worked best for you. If the RF has not sold you can put it into RM.”

Banwell at Getty Images said that a key point is to shoot images with an intention for which model they belong. “Otherwise, you may be reducing your changes of selling well in both.” John Lund put it succinctly, “I make a decision, I move on, and I don’t worry about it. I just make more images!”

Lynn Goldsmith is well known as a celebrity and portrait photographer. She offered, “I think images are rejected, that my experience in the market tells me would sell, if they were presented for sale. I know Getty's Photographer's Choice works because I have a number of photographer friends who are with Getty. They tell me when an image is rejected, they put it up themselves and they see very good returns. It is frustrating to be with Corbis and have them turn down images, thinking that I have to go to another agency to get them out there. I prefer to keep my life simple and be with one agency, but the way it works now, that is not possible.”

The newest buzz word, of course is – wholly owned. Everyone wants to know if their best images would be competing directly against an agent’s wholly owned library. Banwell stated for Getty Images, “We are growing wholly owned, but it’s not to the detriment of self funded images. They all have to equally meet our client’s needs.” Donehue adds, “it’s always advantageous from an agent’s point of view to have the photographer take the risk to front production costs. When we are bringing thousands of images in the door every year, a wholly owned program creates its own risk. Wholly owned will grow in the area where the agency needs to have control over the asset. You should be shooting the abstract things that will not be in the wholly owned collections. These sites are learning machines and the algorithms that are built into these machines allow them to favor images that are put into lightboxes and double clicked on. It’s in our best interest to get the images that are most popular.”

Jeffrey Burke is a Senior Vice President of Product Strategy at Jupiterimages, the third largest imaging company in the world. Jeffrey offered, “I think that any panel discussion that has to do with the business practices of stock photography has to touch on wholly owned content. I can say with certainty that Jupiterimages also does not favor wholly owned content over royalty based material because it’s in our best interest to best serve our customer. Our customers are not best served by how much money we make on the picture, but by whether or not they are getting the picture they need. And because the three largest companies are engaging in that, it’s important for people to understand what the new options are going to be - royalty based vs work-for-hire, wholly owned content.

“I’d like to propose going forward that there is a place in the new model of the stock business for people to make a viable living doing contract based, work-for-hire production for the three main agencies, and all the others besides, because there are evolving market needs. The market determines who is going to make money and who is going to succeed in this business. The little Mom and Pop operations are starting to have a hard time competing if they don’t move to the new market requirements. The new requirements for publicly traded companies are to increase the quarterly bottom lines and capitalize image costs rather than pay quarterly expense costs. Work-for-hire is about to be a very large part of the business.”

Another important point from Jeffrey Burke concerned the International market. “Concerning International expansion, the Chinese government licenses Microsoft office in about 4% to 5% of their computers. The rest of them are pirated. How viable a market is China going to be when the government is not taking any reasonable approach to intellectual property?” James Alexander of Adobe offered, “As a software company, we monitor the China situation very closely and we are issuing Chinese versions of many of our applications. Adobe feels that the Chinese market is actually getting much better, and the government realized that they have to adhere to world wide policy and copyright. That being said you are talking about a cultural change, so it’s not going to happen over night. You see billboards with western looking faces in them. Advertisers are picking these images for their inspirational value, so you don’t have to go over there to shoot images for that market.” John Lund’s pearl of wisdom concluded the session, “If you make great pictures and get them out there, you’ll make money!”

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Other knowledgeable people in the industry have analyzed these same numbers and issues over the last year. Jim Pickerell’s newsletter, at www. Pickphoto.com, always offers the best statistics on the industry in order to help photographers understand their options. His regular review of Getty Images’ numbers, which are public record, helps to balance the actions of the largest stock company in the world against what other stock agents are doing. As of December 2005, Pickerell was claiming that, “There is a precipitous drop in return-per-image revenue.” He offered two reasons, “The first is that increased competition on Gettyimages.com is causing a rapid drop. And the second is that a lower position in the search results is also having a negative impact on the return.” In both cases Getty Images has added many new third party deals, representing the work of agents and collections that they do not own. Also, they have geared up their wholly owned image production efforts. Jupiter Media is also taking the reins in that department as they have a strong basis in the subscription model, which demands vast quantities of varied Royalty Free imagery for daily downloads.

Pickerell also observes a return-per-image drop in Getty’s Photographer’s Choice, which was introduced in the fall of 2002. He attributes that drop to “increased competition from Getty’s “Image Partners”, and to the lower position in the search order.” However Getty offers that Photographer’s Choice “in better represented than many of the major Getty Image collections, with the second highest number of slots per image.”

Bahar Gidwani, CEO of Index Stock Imagery, www.indexstock.com, offers some analysis accompanied by charts, in this blog – www.dimdump.com. He surmises that the “overall median price in the stock photo industry dropped dramatically over the past fifteen years. I believe that shift was due to several factors:

1. Increased competition among our agents.
2. Pressure on them from both editorial and design clients, to accept “special pricing” deals with fixed, pre-negotiated fees.
3. Expansion of our network into smaller markets. We grew our distribution over this period from approximately 25 countries to more than 60.”

Ron Rovtar, of www.stockasylum.com, further analyses the industry by commenting that the “industry consolidations may just be the market’s effort to clean up what is left of an old business paradigm.” 2005’s purchases of Photonica by Getty, Zefa by Corbis, and Creatas and PictureArts by Jupiter Media, are prime examples of this. He offers that the market for Royalty Free is probably peaking, with the “pressure from subscription services, and the inability to control theft of Royalty Free content.”

He adds that RM is not going away, as The Picture Licensing Universal System (PLUS) recently published a glossary of picture licensing terms, making it easier to negotiate all kinds of image transactions simply and with the same language. “The issue of RM is a complex question that touches on a number of areas including considerations about the future of advertising and design, as well as changes already happening in our stock industry that threaten to once again rebalance the relationship between the creation and distribution of visual content.”

“In the simplest terms RM is not going away because it clearly serves a purpose. Considering the fact that the industry has done little, if anything, to promote RM in recent years, the product has shown an incredible resiliency. We don't see Getty, Corbis, or anyone else of consequence talking about getting rid of RM. We do see JupiterImages, UpperCut and others getting into it.”

He also highlights the number of new companies springing on the market, with business models that give photographers and other suppliers an “unusual amount of flexibility in offering images to the marketplace,” some with very aggressive pricing. A few examples are Digital Railroad, MyLoupe, IPNStock, Stock Pipeline, StockPhotoFinder, iStockPhoto and Shutterstock.

Bruce Livingstone is President, Founder and CEO of iStockPhoto, www.istockphoto.com. His business represents one of the micropayment systems becoming popular in stock today, allow images to be licensed for $1 to $3 per image. He assures us, “Our best selling images sell for two, three, and four thousand times. We make up in volume for what others do in dollars. Even our photographers, on a per image basis per year, make more than they would at other agencies. If an image is selling for three hundred dollars, it may sell for two or three times a year and that would be a decent selling image. Whereas we’re selling the same image for three dollars and it sells for a few thousand times. So in the end, it comes out the same or it tips in our favor especially if it is a hot selling item.”

As Chairman and CEO of OnRequest Images, www.onrequestimages.com, David Norris comes at these issues from the other side of the coin, as his company specializes in custom assignment photography and production, with the added advantage of working within stock image pricing. OnRequest Images produces Custom Stock™ images - which is custom photography, shot to customer specifications in 2-3 days, and licensed at stock photography prices. OnRequest Images also produces collections of on-brand imagery for customers, called Custom Stock™ Libraries. David states, "What's the truth about the opportunities for making a livelihood with stock photography? - The stock photography industry is changing rapidly and the effect on photographers is going to be dramatic. As large and small stock agencies move more and more to wholly owned content, photographers will be challenged with how to differentiate themselves when competing with stock. With the recent technology advances that lower production costs, more customers are going to turn to custom photography to get more tailored imagery that better fits their businesses, while saving them money. With new technology on their side, photographers will be in a good position to compete with stock, as wholly owned content continues to reduce the number of shooters that participate and financially succeed in stock.”

Roger Ressmeyer, CEO and founder of Science Faction, www.sciencefaction.net, benefits from an extended history in the industry, having held management positions at Getty Images and Corbis. Roger is very quick to say the photographers have to carefully evaluate who they are and what they have to offer, as there is no easy formula for everyone. He reiterates that the market has changed because of the cost of digital imaging. “It had to become a real business, therefore bringing market focus into the business that was not there before.” He adds that agents used to exist to serve the photographers, and were not a true business in the corporate sense. Getty had to bring in professional accounting, top level business development and to serve their investors. This equates with huge fiscal responsibility.

Also he fears that photographers often attach their egos and emotions to their product, so it is much harder to see what is going on and to understand how to flow with the inevitable market changes. The business is now influenced by “standard capitalistic market forces,” and this system is “set up to support a few very good artists.” Therefore he advises that artists need to think in a more corporate manner and learn to promote their work and their business with this level of sophistication.

Beate Chelette, President of Beate Works, www.beateworks.com, a photography library dedicated to interior, architectural, home decor and lifestyle related imagery, also offers her insight into today’s market. She feels we have moved away from what makes a great image, to focusing only on what sells and the return-per-year. She feels that RF is unstoppable and the wholly owned contend will be dumped primarily into subscription for now. She also realizes that there will be other unforeseen business models to come. “In the end the decision a photographer has to make is if he/she wants to be everything to everyone or to be specialized.” In the big business models one finds a flood of images. She adds, “My projection is that clients will find themselves frustrated by 100,000 search results to one image request. We found that clients are happy to find a niche like us if they need these types of images. And we charge happily 15% above the market.” She advises that photographers assess what images have flooded the market, and otherwise find a niche, attend industry events to understand the changing industry, and not spend time complaining. “We have seen 100% growth for the last three years in a row, and like any business the more time invested, the greater the results.”

Joseph Lacugna, financial analyst for the stock industry and executive at Expedia, offers insight by adding, “Just because you have been successful in the past, it is not a formula for tomorrow.” He agrees that the market is fragmented, and that there are more niche agencies than ever before. It is now a “generalist versus specialist’ market, and there is also a bottom end of the market as images are available at low cost or for free. He feels that the average salary for a large number of photographers will go down, and that there will remain a select number of ‘stars’ in the industry, that make a large amount of money, as now we are seeing the advent of image production companies that produce large amounts of very market targeted photography.

Betsy Reid, Director of the Stock Artists Alliance, www.stockartistsalliance.org, adds some final comments from the viewpoint of the strongest stock photographer’s trade organization. She notes that there has been a shift from agents representing artists to corporate driven image needs, and that the stock distributor’s business is customer driven. The changes have made business more difficult for photographers. Distributors need to reduce operating costs and this is often coming from photographer’s royalties. She hears the general message to “accept deals, produce for RF, shoot work-for-hire, and sell collections.” She notes that, “artists and their images are at the center of this industry, yet they feel largely unempowered and acquiescent to the status quo.” The artists should “strive to improve the business for themselves, and look for better deals and opportunities, since there is no standard road map anymore, but there are strategies that work.”

One aspect of the discussion not to be forgotten is offered by Randy Taylor, CEO of www.stockphotofinder.com: “Photographers with a strong niche can supplement other revenue sources with direct sales. They can host their images online for ecommerce
licensing at our StockPipeline.com for about $50/month (or IPNstock, or MyLoupe, or PhotoGateway, etc.). They can directly market their images via StockPhotoFinder.com (or Google or direct mail, etc.). In this way, they can build their own brand and personal prestige, get slightly higher prices for stock usage, build a client list with cross over
potential for assignments, control rights more tightly if they are "tricky" uses, and most importantly, keep 100% of the licensing revenue.”

In this decade picture agencies are facing many of the same challenges and changes. On average they feel that the near term opportunities for photo agencies include more focus on RF and wholly owned material, targeting content to high-growth and under-served markets, new technologies and the new markets they create (mobile, multimedia), targeted marketing, specialization, ethnic content, outsourcing, more distribution channels, better web sites - meta data and keywords, extended collaboration, and getting added to preferred vendor lists, to name a few. As Rovtar states, “Without question, a technology-driven paradigm shift is occurring in the stock photo industry.” And “indeed a good argument can be made that we are, at best, just halfway through this shift.”

Their issues highlight a few of the never ending movements in the stock photo volcanic lava flow. It’s hot, it keeps going, and it is eating up everything in its path. Rest assured that there is money to be made on every level for all types of talent. But how much money depends on some minimum requirements of tenacity, courage, business acumen, planning, research, finances, time, and talent. Do you have all of those?