Let’s take a look for a moment at industry wide pricing for stock photographs, shall we? For simplification reasons, let’s agree on the process by which photographs are fed into the giant labyrinth of photo agencies and archives. Essentially, the photographer creates the images, processes them digitally, applies the metadata and uploads them to an agency. The agency (take your pick) has in place a network of buyers and other agencies and provide the platform for distribution and payment for the photographer for a percentage of the sale. In other words, the agencies simply function as brokers between photographers and buyers.
Let’s also agree for the sake of space (you’re already probably bored, so let’s speed things up here) that the photographer and the agency incur significant expenses while fulfilling their end of the arrangement. Photographers are encumbered by rapidly changing technology and have to keep pace to remain relevant and the agencies must maintain a stable, smooth and easily accessible archive of images to appease their clients. All that takes money. Lots of money, most will agree.
Like in most commodities markets, prices rise and fall. With respect to photographs specifically, prices have been in a general free fall for years and there’s no signs of it letting up. In fact, there is pressure on the agencies to maintain nearly unsustainable prices in the form of Preferred Vendor agreements. These agreements are in place to provide volume discounting and encourage buyers loyalty to a particular agency. In other words, once a buyer asks for and receives Preferred Vendor status, they will pay less per image so long as they regularly purchase images. Of the three parties involved in the agreement, who benefits the most and who suffers?
- The Buyer: The buyer, typically a large publishing company with needs for many images each month, benefits from a type of rewards program and receives discounted pricing on images in return for their loyalty.
- The Agency: The agency benefits from enticing repeat, volume based buyers with discounted pricing on images. The agencies receive less per image but attempt to make up for that with increased volume. (the Getty model)
- The Photographer: Not much benefit here at all for the person actually creating the content. The photographer’s image sells for far less than normal but the photographer does not participate in the agency’s volume based revenue that is designed to make up for the discounted pricing. In other words, XYZ buyer comes to BCD agency and purchases my image at a discounted price, then goes on to purchase a 10 more from 10 other photographers. The agency benefits from the volume of all ten sales, the buyer benefits from the volume based discount, but each photographer receives no portion of the other sales, hence the photographer’s revenue decreases.
Another factor that used to drive pricing but has been rendered less significant when Vendor Preferred is applied is the uniqueness of the image. I photographed a Nobel Prize scientist years ago who has not been photographed many times and is hard to contact. His image is in fair demand and has sold many times over. However, last month I had his images licensed four times to magazines in France and the Netherlands. One sale was for $25.60, another for $57.09 and the last two for $92.15 and $102.39. I receive, as is standard with agencies, 40% of those sales. Grand total for licensing the four images was about $137.Yikes…….
Nothing is ever as simple as it seems. Some will argue that without Vendor Preferred the photographer would receive 40% of nothing. Some, like myself, would prefer to find a model that rewards the photographer, not just the buyer and agency, for engaging in volume discounting. Perhaps a yearly dividend sent to each photographer so that all the photographers benefit in a small way from the discounting.
When too much power is wielded by one side in a business deal, someone gets the short end. It’s been a buyer’s market for years and it’s not going to change. The buyer’s wield the power, the agencies are adapting to survive and the photographers are watching their royalties continually decline. We just have to figure out how to fix things before the prices get so low that we hit 40% of nothing anyways.