Photo stock industry is mainly the tale of two sides — the buyer side and the seller (photographer) side. It’s been evolving at ever increasing pace ever since computers started helping people make better choices around picking the right stock photos or helping them sell more photos.
If you are a buyer, your experience has been changing rapidly — about 15 years ago you only had two options. You would either go with the Getty Images and get photos via internet or CD-ROMs, or go with super-cheap collections of pretty horrible clip art — usually distributed on CD-ROMs and packaged around “1000 photos for business” or “10,000 photos for presentations”. And if you don’t like any of the options, you had to orchestrate your own photo shoot.
The industry is getting mature pretty quickly. Getty will be celebrating 20 years in 2015. However, for the last 6 it’s been in hands of private equity firms, mainly for it’s lucrative cash-flow business. Getty has proved the most important point — that photo stock is a business, and hundreds of competitors have been trying to dethrone Getty ever since.
If you are a seller (photographer), your choices 15 years ago were very limited. Photography was still a widespread hobby, but it was nothing like today. Photographers would shoot mostly film (the first digital cameras just started to appear, but they were expensive, clunky and comparatively low quality), and only a select few would find them working in a photo stock industry.
Let’s fast-forward 10 years, to 2009, and the digital photography started making a serious statement for photo enthusiasts around the world. A crop of new companies fuelled by the growth of the internet, have appeared and offered a way to sell the photos. One of them was iStockphoto (now iStock), offering wide range of simple photos for a very low price — nothing like that existed at the time, and that gave a birth to the new movement — ‘microstock’.
In 2006, iStock got acquired by Getty, and the prices rose ever since. Today, it can hardly be called microstock anymore, with image licenses approaching $2,000 mark. At Getty, some rights-managed photos go for north of $20,000 per license.
However, the rise (and fall) of iStockphoto gave birth to a lot of its direct and indirect competitors, all trying different models — free, ultra-low prices, high prices, royalty-free and rights-managed. With the exponential growth of digital cameras sales, there’s no lack of content to sell.
In theory, it should have been very beneficial to the photographers to have a lot of competition. However, in practice, all the players in the industry seem to collude to a single tactic — paying less and less to the photographers as they were gaining marketshare.
A lot of players started with 30-50% royalties (meaning the dollar amount of the sale price that would go back to the artist) paid to the photographers and kept lowering it over time. Main players today tend to pay between 15-27%, while diminishing the freedom of photographers by asking them to go ‘exclusive’ (photographer gets a few extra percentage points for that).
For a lot of people, getting a first digital camera or even a smartphone was the first real contact with photography. For others, that is a hobby that they constantly keep spending money on. Making money is not on their minds, but making a few dollars of someone’s hobby seems like a good idea. However, when you try to get to the photo stock market… you’ll get confused. A lot of rules, a lot of legal paperwork, lots of restrictions, approvals, and so on. On some sites, you have to pass an exam to be admitted!
Once you are in, making sense of your collection is not easy — you have to photoshop out all the logos, you’ve got to have those model or property releases handy, and you have to tag each photo extensively. It’s another day job!
And for some, it is indeed a full-time job — for example, Yuri Arcurs claims to be the world’s top selling stock photographer since 2009 (however, it’s impossible to verify or deny this claim) and spends his days shooting along with his team that helps him manage and sell photos.
For people like me, photography is a hobby we take pretty seriously. I, like many around me, like traveling and exploring, and that takes me to remote places. For example, I’d go to Alaska for couple of weeks — a pretty expensive trip with expensive gear. As a photographer, I care about getting more views, likes and exposure, but I also wouldn’t mind making a few dollars or having my photos on the cover of the book or a magazine. Unfortunately, there wasn’t a place to share and sell images in that way until 500px Prime.
The most serious issue that stands in the way of a bright future of photo stock industry is the supply and demand problem. The supply is abundant — there are hundreds of millions of people taking billions of photos daily. Just a small fraction of those are of value to the rest of the world (Facebook and Snapchat both handle 350 million photos a day, but as a buyer you probably don’t want to license those!), and a large percentage of those great images end up on 500px, where you upload and share your best photos.
A lot of players are getting into trying to monetizing mobile photography — Foap, EyeEm and myriads of others. It seems like a natural progression. However, while I think we are still not there yet, the quality and quantity of mobile content will keep improving very quickly over the next five years. So there will never be a lack of supply anymore.
The demand side is currently limited — market research puts it somewhere between $2 and $6 billion dollar a year industry, but it’s impossible to know for certain since the handful of largest players are private companies. What’s certain is that there’s a limit… for now. The photo stock industry reminds me of music industry in the 2000’s — few customers were buying legal music in the 2000’s, but as we firmly entered the 21st century, it’s more convenient to subscribe to Rdio, Pandora, Spotify, iTunes or to purchase music from Amazon or iTunes. The behaviour changed. Same happens to movies right now, and same will happen to photos — they will become a commodity item. You want a pretty picture in your Facebook to promote your hobby or mark an important event in your life? 99 cents.
This will open a huge new market — to everyone from entrepreneurs to SMBs to enterprises. Mobile photography will obviously play a huge part in connect consumers with genuine photography, but so will the high-end of the market — beautiful, immersive photos are a key to connect your brand with your consumer.
Woman Laughing Alone With Salad
There was a great article in The Atlantic recently about “Woman Laughing Alone With Salad”. What quickly became a meme on the internet is a sad state of the photo stock: boring office images, weird photos of women with the salad, perfectly calculated ethnically diverse groups of “friends” or “co-workers” starring at the screen smiling. It’s full of boring and fake imagery. This trend echoes the woes of creatives who are trying in vain to search for a genuine and real imagery.
And so we are launching 500px Prime tonight, with a party here in our Toronto headquarters at 22 Duncan St. It’s the birth of something that few people believed was even possible. How so?
First, the seller side. Photographers are getting 70% net, which is absolutely unheard of percentage in the industry, which now seems more like a cartel with 15-30% payouts. It’s always been hard to make a living off photography, but with this downward trend on percentages (and increasing competition, and, thus, supply) it’s simply close to impossible. It’s only fair that 500px, created by photographers, will stand up for photographers.
On the buyer side, things have been complicated for a while. You buy a license fair and square, but then have to buy an add-on if you want to print over 499,999 copies? Or you buy a license and it’s valid for a year and you go one day over… and get sued in the process. Relationship status: It’s complicated. With 500px Prime we want to make it super simple to license — it’s a no bullshit license, buy once — use forever. It makes buyers comfortable so they end up buying more and buying with confidence.
Another competency of 500px is that we are an engineer-run company, and we love to solve things with data. That’s why 500px Prime is the only data-driven photo stock company. Others will tweak their search to sell you more of the stuff that sells, which is quite the opposite from what the creatives might want. So it’s only natural that we took the power of 500px and applied billions of consumer signals we collect each month to the photos we have. We ended up offering not just photos, but data-driven photos — you know in advance how well the photo will spread virally or how likely it is to be recommended to a friend.
And at the core of all this lies our love for photographers and their unlimited creativity. The genuine imagery that photographers capture drives everything about 500px. It’s amazing what places they see and what people they meet and what new techniques they invent. This all creates a stunning, real, inspiring and immersive experience that drives millions of people to 500px each month.
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