Stock Imagery's Shifting Landscape

A picture, as the saying goes, is worth a thousand words. It makes some sense then, that there is quite a lot to be said about the billions of pictures comprising the stock-photography and stock-imagery marketplace, especially at a time when stock has never been so prolific, accessible, and in demand.

The current buzz surrounding the industry suggests that while rights-managed and royalty-free models are still the market’s stalwarts, microstock photography continues to grow and impact the market’s existing paradigms. And as this growth of microstock is fueled by the increased need for Web images, traditional stock companies have also developed and restructured licensing models to better serve their customers’ needs. Additionally, advancements in the technology and stock agencies’ website search engines are once again talking points given the influx of stock images and the increasing need for fast, intuitive, and comprehensive searching capabilities.

Micro continues to move the market

As it has since its emergence several years ago, microstock photography shows strong growth-in part because this model makes stock photography readily available to a wide-variety of users.

“Microstock,” says Jon Feinstein, a photo editor at Shutterstock (www.shutterstock.com), a microstock site, “is less exclusive and really opens the doors up to photographers who otherwise might not have had the option of submitting their work to larger agencies. It allows anyone to submit and anyone to go through the initial screening process without necessarily having an insider connection.”

And with the cost of microstock images starting at just $1 on some sites, the microstock model is open to many more users of stock imagery. “In the same way,” says Feinstein, “it makes the whole stock process more accessible to photographers, it makes stock photography more accessible to smaller companies and smaller budget-oriented business.”

Serban Enache, CEO of microstock site Dreamstime (www.dreamstime.com) adds, “Microstock agencies have succeeded as platforms that provide content to a wide array of customers. Buyers range from SOHOs to top Fortune companies.”

Microstock is also on the rise due to the demand for Web-size images, which is fostered by the influx in websites, blogs, and social networks as well as the increasing popularity of Web advertising. “Many people with websites and blogs cannot afford to pay huge amounts of money for stock imagery,” says Oleg Tscheltzoff, co-founder and president of Fotolia (http://us.fotolia.com), another microstock site. “We [offer] them a product that is affordable and within their budget.” What’s more is these Web-size images are generally high quality as well. “While many of our clients are Web-based,” explains Feinstein, “we don’t just aim for the Web standard. We want to have a higher quality expectation so we can satisfy our clients who are doing those larger kinds of projects.”

Cathy Aron, the executive director of the Picture Archive Council of America (PACA, www.pacaoffice.org) also notes that the growth in microstock can be attributed to the increased ease of entrance into the industry. With the days of needing a location to house large transparencies and the resources to ship images in the past, Aron acknowledges that, now, “If you’re able to get digital images, you can have a virtual business in a matter of weeks.” However, she adds, that there is still some serious work involved in running an online agency: “It’s not, ‘If you build it, they will come.’ Just because you put up a site with great images, you still have to have a way to get the buyers.”

This growth of microstock, it appears, has set the stage for some changes and shifts in the traditional licensing models of royalty-free and rights-managed. While microstock images are arguably not yet interchangeable with high-end royalty-free images, the line between the “lower” end of royalty-free and the upper tier of microstock is beginning to blur. This overlap is creating what is being referred to as the “midstock” range of stock imagery.

Adam LeVasseur, director of product marketing at Getty Images (www.gettyimages.com) explains, “If photographers want to do really high-quality royalty-free, they can’t afford to charge microstock prices for it. There’s just no economic incentive to do that. So there is still a viable space at the high end of the royalty-free market. However, you’re absolutely seeing a shift at the low end and the emergence of these midstock players.”

One of these players is iStockphoto, a microstock site acquired by Getty in 2006. Kelly Thompson, vice president of iStockphoto (www.istockphoto.com) and vice president of Web marketing for Getty Images, indicates though that not all micro-stock customers are looking to make the investment in midstock photos. “There’s a pretty big range of prices in even that mid-market. There are lots of customers that are willing to move up to that price range and lots that are not.”

Whether a customer moves up to another price bracket or not, it’s evident that customers have a wide range of options. “I think microstock offers a wonderful contribution to what stock photography is today,” says Kacy Cole, vice president of market strategy at Corbis (www.corbis.com). Price can really be aligned with quality, she says, and customers have more choice along the spectrum of stock photography.

Edward Grossman, Jupiterimages’ (www.jupiterimages.com) senior vice president and general manager of operations and marketing, perhaps sums it up best: “Customers are in the driver’s seat in a way that never before has been the case.”

But while microstock continues to grow, Cole points out that, “We can’t discount that rights-managed imagery is still 60% of the market today.” Rights-managed, she says, is still a valid model and it will continue to be so in the future. “Customers want to protect their brand and choose imagery that won’t be mass replicated or commoditized.” In fact, Cole believes that the increase of imagery and commoditization by microstock will make rights-managed as important and relevant as ever.

LeVasseur agrees: “Rights-managed is always going to have a place in the industry. It still plays a very important role because it allows customers to pay exactly for the use they need. You can think of it sort of as a custom-pricing solution that does a really good job of matching the value to the customer as well as the value to the photographer. There’s always going to be a need for custom licenses based on use-and we don’t see that going away.” He explains that “a big part of the market demands professional photography for professional use in brand and ad campaigns. Because microstock is such a low price model, photographers can’t afford to put high production value content into that model.”

And while Grossman believes that the rights-managed model does have a lasting place in the industry, he acknowledges that because there are times when images need only be “good enough,” there is some pressure on the rights-managed and high-end royalty-free models to demonstrate why they’re worth the extra money.” These models, he says, will need to “raise the bar,” and be justified in their cost to remain successful.

New sets of customers

To adjust to stock-photography market changes, more agencies are now looking for ways to better meet the changing needs of both existing and potential clients. For some, that means owning a piece of the microstock pie. Getty and Jupitermedia both acquired microstock sites in 2006, and Jupitermedia also operates a number of sub microstock sites. Corbis recently took the plunge with SnapVillage (www.snapvillage.com), which launched in June of this year.

Corbis is also looking to develop the “interactive” content on its site, which Cole identifies as the primary need for customers at this point. “There is this huge trend toward multi-media today which is bringing still, video, and music together to create strong media packages. We’re looking forward to see how we can best service that from not just a pricing play, but from a product and distribution platform as well.”

For its part, Getty has created and restructured image-licensing models to accommodate those customers that are looking for licensing solutions to better fit their needs. Last year, Getty introduced the rights-ready model, “as a response to market demand for high-quality imagery where the pricing was based on uses,” but did not involve as complicated a licensing model as rights-managed, LeVasseur explains. Rights-ready allows users to pay a flat-rate price and use an image for any need within a chosen usage category-commercial use, editorial use, internal use, etc. Recently, Getty added four more usage categories to the original eight for even greater customer freedom and flexibility. The company also announced that it is offering exclusivity on rights-ready imagery; previously that option was not available. LeVasseur says that the model has been a success so far. “We’re seeing an increasing number of customers adopt rights-ready and the growth has been very strong.”

Getty also recently created a stir in the industry with the addition of new $49 “Web-res imagery,” designed to tap into the growing online market. This model sets a standard $49 rate for Web usage of any stock images, no matter the existing licensing model they fall under-royalty-free, rights-ready, and rights-managed. The license duration for rights-ready imagery was initially set at one year, but was reduced to three months after several photography trade organizations objected to the plan, citing loss of high-value digital license revenue, devaluation of rights-managed licensing, and reduced return for photographers as a few of their grievances with the new web license. In an official statement, Getty’s executive vice-president Nick Evans-Lombe maintains “that the Web license protects the value of the imagery, as well as the copyright, by making it impossible for these images to be used in any other way than online.”

LeVasseur says that the program has attracted a new set of customers to Getty that the company was not previously reaching-presumably, but speculatively, microstock users. “It’s broadened the market for us, which is exactly what we’ve hoped to do-attract more customers to license high-quality Getty Images imagery.”

Fotolia also has introduced more options in licensing to cater to customers looking for extended rights options, offering both a royalty-free license and an extended royalty-free license. The extended royalty-free license, Tscheltzoff explains, gives users the right to use, reproduce, and display the image in goods and services intended for sale. However, he admits that rights-managed is still a strong model for those uses. In those cases, “People will not risk getting a royalty-free image because a competitor can have the same one.”

A faster search

As the market continues to move at breakneck speed, people are working at an ever faster pace, including those utilizing stock imagery. The rate then at which people need projects coupled with the influx of stock photographs creates the need for fast and efficient ways to find images.

Both Shutterstock and Fotolia recently enhanced the searching capabilities on their sites. Tscheltzoff reports that the site’s search engine has been enhanced in terms of speed, and Shutterstock now enables customers to search for an image by color through highlighting a specific color on a color wheel.

Getty recently added a whole host of features to make searching both faster and more precise, and these are designed to help people find images they wouldn’t otherwise have found, explains LeVasseur. The Catalyst search tool gives users a visual list of keywords based on the original search word. “They can then drag and drop the keywords to make combinations of different sets of images in the resulting image screen. So rather than just a flat keyword search, we’ve broadened the set of tools a customer has to interact with our large pool of content.”

Similarly, Corbis is investing in greater search capabilities, says Cole: “The demand for the best and freshest imagery has never been greater than today, so the need for the best search to help customers comb through some of the clutter to find the best imagery is imperative.” Cole also acknowledges the shifting ways in which people are searching for imagery. Searches are just not being performed at a desk in front of a computer anymore; people are using PDAs, mobile phones, and IPTV. Cole says Corbis is searching for new ways to distribute content to users as well as through partners.

Looking ahead

So what’s next for stock imagery? The shifting landscape makes it hard to predict, although microstock seems primed to continue its growth. It’s safe to say that future changes will closely correlate with the evolution of the Web and the growth of user-based content. It also appears that the stock companies themselves are eager to take advantage of existing and future Web-based opportunities. It is certain though, aside from the talk of trends and forecasts, that the main goal of the stock industry will remain: to expose people to new and exciting content-an image, perhaps, that is worth a thousand words, but leaves the viewer speechless.