As the flow of news coming out of the stock photo industry major – and not so major – players keep on pushing one press release after the other, it is always good to take a step back and analyze trends.
It’s been a hectic first six months of 2016 and if its any indication, the rest of the year will probably be as eventful. The year started with what will probably be the biggest news of the year. Corbis sold to VCG and Getty Images inheriting worldwide sales, outside of China. For VCG, a great boost to its stock price, for Getty, not only a competitor out of the market but millions of additional photos to license. But, if the latest numbers are any indication, it appears that a big chunk of Corbis clients did not follow the collection to Getty but instead, migrated to Shutterstock. In its latest quarterly report, Jon Oringer, CEO, stated : ” We added more first-time users than ever before during the second quarter”. While he doesn’t specify the source, and it’s obvious that not all are ex-Corbis clients, it is also not a coincidence that both events happened at the same time.
A sour taste
The reason ? Some of stock photo customers do not want to work with Getty. Usually because of a bad past experience, whether on pricing issues or licensing rights ( Getty is known to be very aggressive on pursuing non-legitimate usage), or because of perception ( Jonathan Klein’s self-boasting tweet did not go well within a part of the image buyers world ), or simply because after they were forced to revisit their contracts, some companies found it more beneficial to use Shutterstock than Getty ( pricing, convenience, content). Finally, it might simply be that Getty Image missed an opportunity to maximize the conversion of Corbis customers to their services. Nevertheless, if Corbis disappearing from the market was a nice boost to Getty, it seems to have paid off well for Shutterstock.
But what about Adobe? Contrary to belief, it seems that the software giant is not on the same path. While initial signals seemed to offer the possibility that Adobe would bring a full out direct contact war against Shutterstock, the last few quarters are not confirming it. In fact, what the trend shows is that Adobe plans to build its visual stock division as an added value for its software subscribers and nothing more. Unlike Shutterstock, or even Getty, Adobe does not have a huge salesforce just dedicated to stock photo sales. While it kept the Fotolia staff, it has made no effort to develop it in order to truly compete against its competition. It also doesn’t appear to be competing in the API model where both Shutterstock and Getty are making big strides. For Adobe, it seems, stock photography is both an attractive offer to yet to be subscribers and an upsell to those who already are. Nothing more. Obviously, that could change.
A very lucrative model
Getty Images, on the other hand, while not abandoning traditional licensing, is pushing forward towards the very promising pay per view model. Instead of licensing a picture/video upfront, it gives the image for free (embed) and shares ( or not) the revenue of the advertising placed in the visual with the publisher. It seems they believe the timing is right. And it just might be. Fresh with a new CEO unencumbered by industry legacies, all signs point to Getty about to monetize it’s free embedded efforts. From the recent hiring of a top data specialist to a reorganizing of its tech division, along with public reference to the “Over 97 % of visitors come to our websites to look at – not purchase – amazing imagery” to the release of a consumer based mobile app, the Seattle-based company is looking to attract even more eyeballs to its images. With an average CPM of $2.80 and “just” a billion views, that’s $2,8 million dollars. From internal sources, Getty Images total viewership of images, per month, is much larger than that.
The calculation is smart, for multiple reasons: One, sales become much simpler and automated. No upfront fees, no licensing limitation to calculate, no renewal necessary. A simple grab the embed code and go process. Images pay dividend for their full lifetime, which, on the net, is forever.
Second, data: Since all images point back to Getty’s server, the company can track every single view on every single image. It can collect the biggest intelligence map on visual content ever created. Who is looking at where, where and when. Information it can not only use internally to better focus its production of content but also sell to marketers worldwide who would love to know.
The risk is self-cannibalization. By switching to a pay per view model, Getty Images might loose a substantial amount of its traditional licensors who will switch. It will take time for the new model to reap revenues and there is a real risk that it might experience a slump before the new model’s income exceeds the old one. The switch not only needs to be timed perfectly but also be managed with chirurgical precision to avoid losing revenues that will not be replaced. It seems, for now, that is exactly what the company is doing. The question is not so much will this model succeed but rather, how to make it succeed.
Where the customers are
Finally, an important trend that is maturing is the API channel sales. Both Getty and Shutterstock have been extremely aggressive (and successful) in placing their content in front of buyers at the point of usage, using the delivery of their images via their API within third parties. Both Shutterstock (Facebook and Google recently) and Getty (WeTransfer, Fivvr, and Dropbox) are largely dominating what could be the most significant change in stock photography delivery in the last 10 years: Instead of trying to attract buyers to their website, which is increasingly costly and challenging, they bring their collection within the apps that their buyers already use, dramatically reducing their cost of acquisition. They furthermore gain a captured audience and an exclusive market (API deals, because of their technical requirements, are mostly exclusive). A perfect scenario at very minimal cost. While revenues from those channels are currently still low, they offer, in the long term, the most potential. We will see more of these in the very near future.
As the year unfolds, we clearly see that the major trends tend to orbit mainly around technological improvement and while content remains important, it is the mastery of the sales and distribution channels which are the true battleground of the stock photo industry, for now, and years to come.
Photo by Luis Hernandez – D2k6.es
Stock photo market – a mid-summer analysis https://t.co/nqd8UPxmTz
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