There are too many images available in the editorial market these days. The pressure has been such that the prices of images are going down, following one the basic rules of economy: When supply exceeds demand, the prices drop. And like 1929, it could lead to dramatic results for the stock photo industry business.
A few years back, a small agency, based in Washington DC, called Newsmakers launched royalty free editorial images. The idea was quite simple: they put numerous head shots of famous politicians on a CD which you could buy for a flat fee and use them as many times as you wanted. Under pressures of their peers and because they were later bought by Getty Images, it never really took off.
Flickr is about to offer a means for their users to license images. What are the choices: they could go for a simple e-commerce, royalty free approach: The easiest and most cost effective way to start capitalizing on the huge collection of images available. A “buy once, use multiple times” model, with prices being decided by users. The microstock companies will have to follow.
Flickr could also try and enter the Rights Managed market. But that would be a much more complicated, more expensive proposition because it is still far from being fully automated.Tracking usage demands a lot of resources. Regardless, without a pricing guideline, usage fees would immediately plummet.
and lets face it. A lot of images in the editorial space are not exclusive : press conference, red carpet, even some images of war are taken by a pool of photographers traveling together ( Lebanon is a good recent example) . So why are image buyers really paying for a limited right when they do not need it, and agencies cannot provide real exclusivity to most of their images.
If I were a new editorial photo agency entering the celebrity space for example, I would stop slashing prices ( space rate are lower now than they were 10 years ago). Instead, I would fix a nice flat fee for multiple usage and save money by not having to check for usage. There is nothing that looks more like a red carpet photo than the one taken by the photographer next to you. And they are up to 75 photographers at these events.
Another sign is Getty Images playing around with the “pay once, use multiple times” model. Their new licensing experience called “rights-ready” currently being tested in the commercial space could easily be transported to the editorial space. It is just a question of content. With their subscription model for editorial, copied from other wire services like AP or Reuters, Getty is not stranger to selling cheap editorial images. Furthermore, both founders, creators and operators of NewsMakers now hold extremely high position at Getty these days.
You also have the emergence of the individual portals, like Photoshelter, DigitalRailroad and other Spitfire photo pro. They add yet an additional source of images to the market by making them easier to find. While Photoshelter has, for now, taken the approach of sticking with industry rates, no one knows yet what DigitalRailroad or Spitfire Pro, will do. The independent photographers using these services will need a way to penetrate the market and since they do not have the overhead of agencies, will be highly tempted to reduce their pricing.
On the other sides, magazines, newspapers, websites, facing budget cutbacks and staff reduction, will have no problem accepting this new pricing model for editorial images. and because of the sheer amount of images available, they have leverage. Less billing, less tracking, less hassles. What is there not to like?
The price of editorial stock falling is nothing new. What will be new is the emergence of Royalty free editorial images which is going to cut a huge slice of most agencies revenues. The question that remains, is who will be the first one ?