Are things going well in microstock?

[Yuri_Arcurs]

What�s your experience? Are things going well in microstock?
Here is an honest breakdown from my perspective:
Over the last three months I have produced over 2000 images of the highest quality I have ever made. They are bright, colourful, super sharp and ultra high res, all with new faces - professional models and new locations. It has cost me over 40000USD to produce these images and three months of 60 hours a week. 

Now this is the problem:
I have had no increase in income for the last four months. None. I am actually down with about 5%

Doing this kind of production for microstock is not worth it, and looking at it from an investment point of view, it is time to downscale or find new waters�with higher prices. I am in particular losing revenue on the subscription sites. SS, 123RF and StockXpert.

[Amos Struck]

thats a realy interesting question! I think that microstock market will break into 2 different parts.
One part will be the cheap photos and the other part are the premium market.

There is not need to sell a professional photo at 1$ because most people who use it are able to pay much more.

Did you ever tried to start your own microstock agency, only for your portfolio?

[Yuri_Arcurs]

That would be an extreme endeavour and I would lose all my income in the transaction, because I would en an competitor and would be banned from a lot of agencies. I also know how much advertising costs and what I would cost in online marketing to get my portfolio actually visible in Google. The thing is. That microstock is changing and the photographers are getting pros, but the agencies are still armatures in their mindset. Both photographers and agencies lose from having too low prices.

[Yuri_Arcurs]

Look at the graph to the right. Everywhere there is red except Crestock, which have prices starting at 5 USD

[sharply_done]

The simple answer may very well be that you've hit the saturation point for your niche. As profitable as your work has been, perhaps you should consider producing images that address a different market segment.

[digitalfood]

Have you looked into photoshelter, alamy or myloupe for RM?

[Whiz]

The holidays slowed things down some. Maybe it will pick back up in a couple of weeks.

[sharpshot]

I am seeing an increase in earnings except for the Christmas slow down.  Shaply-done made a good point.  I am sure diversification is the way to keep the sales going.

[epixx]

Yuri,
I'm seeing the same thing as you are seeing, and with a completely different portfolio. One of the problems is subscriptions, and why more and more agencies are jumping on that bandwagon is beyond me. It's as if your local grocery store said: we know you have been buying food from us for umpteen years, but as from tomorrow, you can buy ten times as much food every day for the same price.

Obviously, after a couple of years, you would have gathered enough food to last a lifetime, and you would no longer need the grocery store.

And, as many have said already: designers don't really care if an image costs 1 or 10 dollars. The price is so low compared to the total project cost even when creating the tiniest little brochure or website, that the difference totally insignificant.

If microstock is going to survive as a profitable business model, it needs to look at itself in a long term economic perspective. Since "we" are an important part of "it", we have to do what is necessary from our side to contribute to our own future. For me, that equals opting out of subscriptions when possible and consider removing my portfolio where it's not possible and to support agencies that charge better prices and pay a higher percentage to the photographers.

We often talk about microstock and midstock. I think it's simpler than that. To survive, microstock needs to become midstock, and microstock, that's us.

There will obviously always be new agencies popping up with lower prices, but as we are now in a situation with 5-10 large, established companies that "rule" the market, a small, cheap one won't have much impact long term. Customers shop for quality and diversity most of the time. The can't afford wasting time looking for the lowest price if quality is to be found elsewhere.

Just my 2p (or was that 15p?)


Jorgen

[stokfoto]

The simple answer may very well be that you've hit the saturation point for your niche. As profitable as your work has been, perhaps you should consider producing images that address a different market segment.

I agree with Sharply on that

Doing this kind of production for microstock is not worth it, and looking at it from an investment point of view, it is time to downscale or find new waters�with higher prices. I am in particular losing revenue on the subscription sites. SS, 123RF and StockXpert.

I keep saying sub models  is a kind of killer to the industry and it only lowers the prices and I don't think anyone will benefit from it in long term.
As for crestock yes they do have price tags starting from 5 dollars but as contrast they  offer one of the most reasonable(form buyers point of view) sub prices therefore I'd think their higher(?) prices is there to encourage people buy subscriptions  needless to say all my sales on Crestock  are subs(having said that I have a tiny folio there and a handful of downloads)

[vonkara]

It's when microstock sites will lost peoples who invest big money and time that they will consider rebuilding the business structure.

 I heard Istock saying that they loved us so much, many times and I don't like them like they do that make me think that they make really much more money than me whit my own file. Even if I don't have so much.

If we were all together and stop uploading to SS and 123RF for example, they were maybe out of business in the time to shut down a computer. I can't imagine all that full size downloads I miss from subscription sites. Even if SS earn a lot...

[erwinova]

Yuri..(i'm your fans) 

Everything will be going well, as long as photographers walking to the right direction...
If photographers support the subscription agency or agency that give 20%-30% share, that will be bad thing in the long term...
Keep support to low share agencies at the moment for your cash flow, also support the 50-70% share agency like featurepics for long term and better future (who knows). When your revenue in 50-70% share agency going to be high you can delete your file from low share agency...

The problem is the high share agency not popular yet righ now, photographers should be help to make it popular.

Imagine that you have same ammount of download at same price between 20% share agency vs 70% share agency...maybe you not going to created this topic
Imagine that all photographers (at least best phographers) stop uploading at low share agencies..
imagine that your 60 hours a week pay at 70%..
imagine that all agencies give you 70%..

it's all about photographers...

[bryan_luckyoliver]

Yuri-
While we don't haven't the volume yet, we firmly believe midstock is where the industry is going.  We initiated this segment because we feel that margins need to increase for photographers.  The concept of midstock is that microstock *and* macrostock can coexist.   One drives the other.

Other agencies have held back based on fears of losing margins on their higher-end brands, but we've driven things forward. I can only think this is good for photographers in the long run.  I wouldn't be surprised if 2008 has more companies entering into this space.

[hatman12]

I'm not convinced that a 5% reduction in revenue over the last four months is yet a 'trend'.  The last three months have seen a big shift to seasonal images, and as far as I'm aware you don't have those in your portfolio Yuri (except the disco/gig series).

People with a big seasonal emphasis in their portfolios will see a drop in the next three or four months, so their experience will be the opposite.

I agree that subscriptions (at these prices) devalue a photographers work and are not good for the long term.

I don't think Microstock has reached saturation (in fact I think it is still in its infancy), but it is possible for a photographer to reach saturation, as sharply suggests.

I noticed recently that Hidesy (at iStock) has just uploaded her 10,000th image.  A year ago she had 7,000.  But she still seems to be selling about 8/12,000 pictures a month, so although she's increased her portfolio by nearly 50% her sales over the past year appear to have stagnated.  It's possible that as she now uploads new work, her work of four years ago has become 'old' and drops out of the equation.

The same thing might be happening to you Yuri; the whole world is aware of your move to Hassleblad, and buyers 'might' prefer to buy those new images instead of your older ones, so you are 'working to stand still' (but at higher costs).  Sometimes publicity doesn't help the bottom line.

The good thing is that microstock prices are continuing to rise at 20% per annum or more, and I expect that to continue for the next five years, so even if sales remain constant, income should rise.

A photographer of your quality and experience Yuri should be taking on bespoke corporate client projects in the $150,000 and above budget range.

[yingyang0]

If I was a people photographer like you Yuri (I refuse to sell any photos of people under a RF license) I'd be looking for areas that haven't been done over and over. Especially ones that are news driven. For instance, there are little to no hispanic manual workers on iStock or any place else. Given the daily rantings of republicans about illegal immigrants I would have thought people would be uploading a lot more hispanic workers.

This is just one of the many areas of people photography I've notice haven't been done and I would think are in demand (I've been trying to buy them for several months now).

$160,000 a year in overhead even for a top performer seems extreme. I thought most microstock models are paid in prints.  Why pay for beautiful people when, from what I've seen, normal people doing everyday activities sell just as well. I'd consider contacting Lisa to see what her costs are. Remember that it's not about generating the most revenue it's about generating the most profit.

[ale1969]

Talking to a designer friend the other day she said the advertising company where she works now uses SS for "not personalized" images (the ones used in compositions, small prints, preparation work etc) instead than getting them from Getty. She said the difference in quality is very small if any, just a lack of "realistic" people shot (you know every model smiles happily in micro).

Anyway they probably download ten times from SS than before from Getty but between the 200-300 $ of Getty and the cents of SS there's the ocean. Plus they don't have the time to download at full their subscription limit, so SS get the 100% of their unused subscriptions.

I'm still wondering where lies that quality difference to justify that an image on SS would cost less than 1% than on Getty. Especially when I browse through Yuri portfolio.

In my (very) humble position I decided that some shots will go to Alamy and other RM agencies, while the ones more widely usable (isolations, 3d renders, etc) will go to micro. I think diversification is the only way.

[Sean Locke Photography]

40 grand is a lot of coin.

[HughStoneIan]

A photographer of your quality and experience Yuri should be taking on bespoke corporate client projects in the $150,000 and above budget range.

That goes without saying, but I'm glad you said it anyway.  Abandon microstock, Yuri.  Your future could be so much brighter! 

[jsnover]

Yuri,

I realize my experience isn't directly comparable to yours, but I do think the seasonal sales are huge Oct to December (this fall season was my 3rd full one in microstock). Each year the pattern has been a good climb from October to November (typically the best month of  the year) and a 20% drop in December from November, but that's still a good month.

If you didn't include strong images with seasonal themes in the last few months' production, the spring sales surge (March-ish) might well see some sales increase from your new images. I don't know how the wrapped packages and ornaments pictures sold, but they didn't appear to be as competitive as your people images are (IMHO).

I think that many, many photographers have seen a drop in downloads (read the moaning on the IS forums on that topic) over the last year or so - in some cases offset by the higher prices and extended license sales. A combination of a much larger pool of images and higher prices...

[epixx]

Here are my weekly statistics for 2007. The text is small, but hopefully, you can read it.



The trends are very clear:

- The distance between SS and the best of the others is decreasing.

- Sales value has flattened out, in spite of the fact that my portfolio has increased in size by more than 50% through the year.

I had a rather brutal reminder of the difference between subscriptions and regular sales today. At Crestock, where my sales are almost only subs, I had three regular vector sales yesterday, generating $3.00 each. That's 12 times as much as subscription sales.

The value of the subscription sales may be decreasing, but the fact that it's an option for the customers at an increasing number of agencies, decrease the value of my photos. I'm tending towards dropping agencies that offer subscriptions unless they have an opt out option, like StockXpert and SV. I  will lose some profit short term, but long term, it's the only way to go, at least if I believe that my images have qualities that customers are willing to pay at least $5 for.

[josh_crestock]

This doesn't bide well for the industry as a whole, when the forerunner is struggling to turn over a profit. Its a reality check for a lot of the agencies, and we all need to start looking at new, innovative models that will provide a better selection of quality images at a pricing model better for both photographer and the agency.

As Crestock is one agency thats growing and generating an increasing customer base every day, perhaps we would be well placed to introduce changes that would provide a sustainable future in the industry.

Though, Yuri, after being on holiday in Dubai where there barely went a day where I wasn't confronted with one of your images. On the plane, browsing in-flight magazines, there were a couple from the beach series, then driving around, there were your images blown up on massive billboards on buildings. Well, 2 at least and there must have been more. Not gaining revenue is a downer, but seeing your images everywhere must be a buzz.

Those billboards would have cost hundreds to thousands to print and put up on the building, not to mention the cost of advertising space, etc. The photographer, relative to that, gets a very small part.

[null]

I read the comparison with groceries here but me thinks that you should rather compare with the restaurant business.

Subscription is all you can eat for a fixed price. The food is OK, but fatty and starchy to get you full fast. A clever eater goes first for the oysters and the seafood (if there is any) but most are seduced by the cheap dishes near the entry. Anyways, a stomach is finite and most people just don't eat all they can.

Microstock is the fastfood restaurant were prices are somewhat higher but you can choose. The food is in disposable plastic cups. All is plastic. The spoons, the forks, even the ketchup is wrapped in plastic.
You will have to queue in a very brighly lit hall full of gossiping and screaming teenagers, then fight for a place somewhere and get over with it quickly.

Midstock is the better middle-class restaurant where you are served in a relax way at your table, with some music, in a cozy atmosphere, with real dishes and real glasses and proper forks. You don't have to queue, you are being served and taken care off. The food is better too.

Macrostock is the 5-star restaurant. It has all that midstock has, but better. The food is top-notch. Prices are much higher but you get value for money, the best caviar and seafood. Those restaurants have many customers, often you have to make reservations.

Now who would make the most money? The fastfood chain or the 5-star restaurant? Designers obviously want to pay for convenience and for finding the right top notch quality shot fast. They don't have time (=money) to crawl through google or cheapstock to see whether the same image is available elsewhere for 1$ instead of 10$.

Another thing: you can serve different types of food but not degrade a photo. You can downsize but it's still the same photo. What if a fastfood restaurant offered the caviar, just in smaller portions?
Finally, what about a regular restaurant customer that sees that at the same counter, an all-you-can-eat customer gets the same hamburger for less?

Yuri Arcurs offers the worlds finest caviar and sushi. He caters the best restaurants. Now suddenly, this exquisite brand name Arcurs concludes a deal with McDonalds or all-you-can eat to serve the same caviar, only in smaller portions. What will customers think? Arcurs fools us and he is throwing pearls to pigs. Plus the screaming teenagers in McDonalds don't even know the difference between caviar and fries with ketchup.

Just a thought. I am getting hungry.... ;-)

[rene]

I still don't understand how an experienced photographer can sell full size images on subscription model sites. With your 39 or even 16MP customers get 4-5 pictures for 30cts. They can crop then and get good quality images of hands, legs, skin texture, hair,  clothes... with only one picture of your business woman.
Suscription model for full size images is not acceptable.

[RT]

Interesting thread and it's nice to see Bryan and Josh adding their point of view from an agency side.

The thing I dislike the most about the subscription model is that we the photographers get exactly the same amount of commission irrelevant of the file size that has been downloaded, what I'd like to see is a commission structure for subscription sales the same as for normal credit sales, for instance 30c for a web sized download and then say $1.20 for an XL, of course for an agency the subscription model is a money making machine which is why SS are so succesful, the bigger the file size a buyer downloads the more money they make because a buyer downloads fewer images but they still pay the contributor the same commission.

I agree totally with what Yuri has said but the same applies to all of us no matter what level of contributor you are, production costs are not being met by commissions, even if you don't hire models,locations and props etc you still have the cost of equipment and your time to balance out.

Microstock exists because of amatuers and by that I'm not talking about the quality of imagery that's produced, for an amatuer who's main source of income is one other than photography the commission is not as a major concern, yet for someone who's income relies on a commission structure from stock it's a fundamental problem, I can see that long term Pro's are going to reach a saturation point as previously mentioned whereby they stop submitting at the current levels they are to Microstock agencies, this in turn will effect the Microstock agencies because even though there are some very very talented amatuers they won't be able to provide a large enough supply of fresh images because of other commitments, then in turn buyers are going to go elsewhere to source fresh material.

Josh, I can't speak for Yuri but I'm surprised at your comment regarding how he must get a buzz seeing his image on a billboard, personally if I saw that and knew it was the result of a few dollars commission 'buzz' is the last feeling I'd have, however your comment is exactly what I am referring to above, for an amatuer 'buzz' is part of the enjoyment they get for doing this, speaking as a Pro the buzz wore off a long time ago I'm in it for the money because it's my job.

Bryan's comment (whatever your personal feelings about LO) is much nearer the mark IMO, I hear people say that buyers are not concerned about how much they pay for an image, I don't agree with those type of statements, when you're running a business or working to a budget you have to get the best deal you can on every part of a contract, price is an important factor and so is quality.

A simple example, Paper, for my business I purchase two types of paper, the cheapest reams of white A4 for my personal records/files etc but I also purchase expensive watermarked stuff for sending out invoices or writing letters to clients, they are both white A4 but for some things I require a better quality and I'm prepared to pay more for it.

Something I've mentioned before is that I would be prepared to send exclusive images to some of the Microstock agencies in return for a better commission, by that I mean proper commision not just another 10% of the $2 dollar download, Fotolia have started their Infinate collection and it'll be interesting to see how that works, however for the life of me I can't understand why they've restricted submissions to a very select few, why not do what I've mentioned above and open it up to exclusive images.

[sharpshot]

Those billboards would have cost hundreds to thousands to print and put up on the building, not to mention the cost of advertising space, etc. The photographer, relative to that, gets a very small part.

Lucky Oliver has the sideshow, Snap Village, Featurtespics and some of the new sites offer higher prices.  I hope all the sites follow this trend.  Top quality RF images will sell for higher prices and this will help the sites and the contributors.

I am starting to upload higher priced images just to the sites that allow this.

3 of the sites are owned by traditional stock agencies, why don't the other sites look at rights manged images at higher prices?