Why are microstock images so cheap?

Do a search on Dreamstime or any of the other major micropayment sites and you’ll find some great pictures equal in quality to anything on competitor name removed by admin or competitor name removed by admin or any of the other sites where full-time professional photographers show their images.

Search by downloads and you’ll often find more great images in the first 50 or 100 (because buyers know how to find the best images) than you’ll find on ******** or Corbis where the algorithm shows the last image posted first.

Unfortunately for a small portion of the uses microstock photographers are not earning anywhere near what they deserve, given the quality of this imagery. I know microstock is aimed at mom and pop users, who can’t afford more than $2 per image. That’s fine. I have no problems with making images available to these customers for $2.

But, what about that very small percentage of customers who are professional users? Corporate users, advertising agencies, major companies producing brochures that they are going to distribute to 500,000 people, or book publishers that will produce 1,500,000 copies a textbook that they sell for an average price of $60 a copy? Couldn’t they afford to pay a little more?

Some ask, “how can you charge one customer $2.00 and another $2,000.00 for the same image?” Easy, all you have to do is structure your pricing based on usage. If the customer is a high school student working on a report she can’t afford to pay much. If the customer is Newsweek, or Google wanting to use the picture in an ad, they can easily afford to pay more. So the first question that should be asked is not file size needed, but how they intend to use the picture.

“Aren’t some images so easy to produce that they are only worth $2.00?” No. The value of a stock image to a given customer should be based on how the customer intends to use it. A picture of a flower, leaves on the ground, an empty road or a field of corn may be easy to shoot, but if a commercial customer wants to use such a picture on a large project, he will be more than happy to pay a lot more than $2.00 for the right to use it. Conversely, if a student wants to use a shot with several paid models in it on his personal web site he’s not going to be able to pay more than $2.00 for the image no matter how much it cost to produce.

Establishing prices based on broad usage categories doesn’t have to be that complex. And it can still make every image available to those who legitimately can’t afford to pay much. Microstock sellers simply need to develop a few categories of usage, each with a different price point. Ask customers if they are going to use the picture on a personal web site, a product for sale, a magazine, textbook, marketing brochure, or print ad in a magazine or newspaper. Each will have a different price point. There probably should be a few more categories, but not a lot. Each person who wants to download an image has a general idea of how they intend to use the image.

The vast majority of microstock customers will be making very limited use of the image and a charge of between $2 and $10 per download is fair. But if even 1% of the images downloaded are for some type of commercial use what those customers are willing to pay could easily represent ten or more times the royalties you are currently receiving for your images. One percent of competitor name removed by admin's 16 million downloads in 2007 is 160,000 downloads. That’s about 1/10 th of all the images competitor name removed by admin Images will license rights to in 2007 and competitor name removed by admin will earn over $60 million for 160,000 images licensed.

If you’re not interested in being paid more for the use of your pictures then continue exactly as you have been. If you’d like to earn more ask your microstock distributor why pricing based on usage won’t work. Why is it impossible to charge customers making commercial uses more that they charge the vast majority of customers who are using the images for personal or non-commercial purposes?

Something to think about.

Photo credits: Absolut_photos.

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Ellenboughn

Jim...through all our long association...and after I explained to you last month that Dreamstime DOES price based on usage, why are you still beating this dead horse? Dreamstime has opened the doors to commercial photography for nearly 30,000 contributors. And our huge traffic proves that these photographers and illustrators have found markets that the high priced traditional companies didn't care a hoot about. We remain loyal to our base and won't get greedy and thereby cut our contributors out of our market with high prices except for those uses that are worthy. Like the $5100 sale I told you about last month when we were all in Las Vegas. I suspect that you have sent this same email to all the microstocks without taking notice of the Dreamstime model. Or have you forgotton our conversation so quickly?

Achilles

Jim, you are famous person in the industry and your efforts towards analyzing stock photography are respected by us. Moderators have strongly advised me that we moderate your post as this is breaking our rules. You cannot walk into a store, inviting shoppers to demand lower prices and expect that store not to take any actions. Is this post coming from an analyist perspective or a photographer? Did you ever ask an traditional collection to charge less the customers who can't afford high prices?

You do have some good points that are in fact part of our strategy already. I am sorry, but you didn't analyze our site well before posting this.

First, images don't sell for 2$/image. They can sell as high as $8 or $16 per RF license. The average is not that, but in any case, the pricing structure is prepared for having different prices for better images. Prices were increased multiple times in the last years. They reached the point where so many pros are building portfolios, compared to calling our model a joke a couple of years ago.

Our RF license is not the same as traditional collections', our RF license has a maximum amount of printed copies. Hence, it is not accesible to corporate customers - the ones you think that can afford much more. As a side note, let me tell you that they don't. I worked with big corporates and they can't afford such prices for any project. For the ones they do, they don't use stock. Why isn't the RF license accesibile to such clients? Because they have a print limit (500,000 copies is low for a big client) and a single-seat license (only a single designer can use the RF license). If they want more copies and multi-seat, they get the appropriate EL licenses. I-EL + U-EL equal $75 for an image. Not that low, isn't it?

How often does this happen? Well, very often. Yesterday a client acquired 1,000 U-EL licenses for a training program they produce. Royalties for photographers from that deal is above 80%. Discount is entirely supported by the agency. Why? Because we care. Why we don't increase prices to $300/image? Simply because buyers can't afford it. The ones who do, pay more for the appropriate usage.

Another example, there are clients who need exclusivity. They get the SR-EL licenses, even if they don't use all options within (all licenses give more rights than the client actually ends up using). Average price is signficantly above $1,000, with records of $5,100 and $4,500. Again, not that low for an image that is in the end used on a specific market, for a limited amount of time.

As you can see, such things happen. We apply various types of pricing depending on the customer's needs, just as you suggested. You cannot critique unless you participate. Please allow me to suggest you to increase your portfolio if you really want to see how things work. 0.13% portfolio exposure is too low for having access to all benefits of this model, not to mention criticizing it.

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