The stock industry El Dorado

December 12, 2006 by pmelcher.

Thanks to Andy Goetze of the fame Stockphototalk blog, I received many comments regarding my first blog. I was not really expecting anyone to read it, as it was more a part of my new site MelcherSystem.

I figure, if I do have a receptive audience, I might as well continue.

So here are some more thoughts on Microstock or MicroRF (unexpensive Royalty Free):

The real success of Microstock is not the exactly the pricing structure, it is the almost full automation of image handling that allows them to come to such pricing. Something that Corbis doesn’t understand yet. Getty, however, by purchasing Istockphoto, purchased the technology. Although, right now, their RF section is being “cannibalize” (the 8 % is going to be 20 % by year end) by themselves, there is a very good chance that they will be able to dramatically capitalize on this knowledge and cut down on their cost of distribution and licensing across all types of licenses.

One might ponder why Getty has not gone full RF. Is it because their revenue from RM are so high that they cover the cost of so many sales executives around the world? What is the % of their client that actually need, want RM? What is the % of images that can actually be sold as RM. (can a handshake image be really sold as RM these days?). We all know that most clients of RM (mostly editorial clients) do not even ask for any type of specific rights. A machine could license these pictures. They do not make the money from managing the rights per say (exclusive, not exclusive), which is not cost effective and hardly scalable, but by charging per usage.

One image gets multiple usage, paid multiple times, making it much more profitable than RF. For exactly the same amount of money spent creating it. So while RF pricing and ease of distribution is extremely attractive for corporate thinkers, the real gold is in one image = multiple licenses.
So where is the growth? Reducing the cost of licensing an RM image: Every photo agency’s El Dorado

Posted in corbis, getty, Royalty free, Microstock | Print | No Comments »