Microstock...a road to riches or the ruination of an industry...or just another step in the evolution of the business of stock photography?
Interview with Lee Torrens of Microstockdiaries.com
Lee,
I often turn to your site to keep abreast of what is happening in the world of Micro Stock, and I am aware that you are instrumental in putting together New Media conferences on Micro Stock, crowd sourcing and so forth. I appreciate your taking the time to share your knowledge with us. Can you catch us up on how you came to be where you are now…and the scope of what you are undertaking?
Thanks John, it’s quite a thrill to be interviewed by you and appear alongside so many of the industry voices I admire so much. Thank you for the opportunity.
How I got here was less than deliberate. I used to work in corporate technology until I met my wife. She’s from Argentina, so I changed careers to something with more geographical freedom: website development. At the same time, my wife got into microstock; she’s a graphic designer and keen photographer. I combined what she and I were learning about microstock with what I was learning about website development and created a blog, with no real expectations for anything beyond some minor affiliate revenue dribbling in and having a place to organize my research.
At the time nobody else was really covering microstock specifically so I stood out enough to get an invite to speak at PhotoPlus Expo in New York. I arranged a sponsorship with StockXpert to cover my travel costs and prepared the best presentation I could. That was the tipping point for me in stock. I met a lot of prominent industry people who have become great friends and valuable relationships for my career, including you, John. I went to the launch party for the Photoshelter Collection. I didn’t know anyone. I introduced myself to you with no idea who you were, and now look at us!
From there I’ve been very lucky with the opportunities that have come my way and I’m now able to support my family from my various stock photo industry revenues. I started closing down my web development business at the start of 2010 (I’m almost finished). I’ve just finished an industry research report which took up most of my time for the past six months. In 2011 my primary focus will be shooting stock - something I’m sure most of your readers will find amusing. I will also resurrect my blog which I’ve neglected over the past few months. Naturally I’ll still be open for further event programming and consulting opportunities.
The world of photography is changing almost by the minute…or maybe that is by the second! Microstock is one of the biggest forces of and/or for that change. It has grown like crazy, but now might be the time to ask if it has peaked. What do you think?
This depends on who you are and what you’re measuring. Many of the top non-exclusive microstock contributors are publicly stating that their ‘per image’ income is dropping. For them, microstock has peaked. If you look at the traffic to the websites of top agencies and the growth in agency portfolio sizes you see a very different story. For them microstock has not peaked.
We all like to draw our neat conclusions, but more often than not it’s done with insufficient data. If you can figure out who has the most data in microstock and sit down with them to chat earnings, you’ll see a very different picture than any single earnings statement or traffic chart will tell you.
One element that has peaked - and there is a consensus on this - is the ease with which people can generate revenue as a microstock contributor. It’s now a lot more difficult than it has been in the past, for both hobbyists and “professional photographers” from other disciplines.
Should we “traditional stock” shooters who have held out to this point test the waters in micro…or maybe I should ask is micro for everybody?
Microstock is definitely not for everybody, nor for every photographer, nor for every stock photographer. It’s not difficult to figure out what kinds of images will earn more revenue in microstock. Some people just don’t want to make those images.
Additionally, it’s not difficult to understand how people who are accustomed to selling licenses at thousands of dollars find the prospect of selling them for a few dollars less than appealing. It doesn’t matter whether it’s an ego thing, an attachment to the past, or just the knowledge that they won’t be good at producing high quality in high volume. Fortunately there are alternatives besides microstock.
I’d also advise against doing any “test” at all. Though there are exceptions, microstock earnings are generally crap without a large and high quality portfolio. You can’t upload a small batch of RF rejects thinking you’re going to do anything other than reaffirm your belief that microstock doesn’t work. If microstock doesn’t appeal to you and your RF / RM earnings are enough, don’t waste your time. If your RF / RM earnings mean you need to find something else, know this: microstock works for some people so a test can’t prove the business model is broken. It can only tell you whether ‘you’ know how to make microstock work or not at this time.
An important feature in micro stock is the ability to search by downloads. But that is also apparently problematic as well. It creates an oversupply of the most popular imagery by allowing photographers to determine which images are bringing in the most revenue; images which they then create more of. I have heard that some of the top micro stock producers are pretty unhappy about this situation. How do you feel about it?
I don’t have the same issue with it as the photographers you’re talking about, and I’m not alone. The ideal of a perfect market in the Adam Smith sense is appealing and we’re getting closer with most markets for digital assets. Ultimately supply and demand will balance out. If too many images of the popular subjects are contributed, the sales will spread thinner and reduce the appeal of those subjects. If people continue submitting images of those popular subjects it’s because they’re getting a profitable return. When they stop, that’s when you know oversupply has been reached.
Until that time, the best images will continue to rise to the top. This is because the relevance algorithms are smart and know how to promote images that sell well. They have to fight against the Downloads sort order, but they get there eventually if they are truly superior. Most agencies set relevance as the default sort order.
For the same reason, straight copies of images struggle to catch up. The original image has a sales history working in its favor both in the relevancy algorithm and the Downloads sort order.
So ultimately, while it’s possible to make money copying the top sellers, there’s much more money in improving on them.
It has long bothered me that Royalty Free is called Royalty Free…because it isn’t. Further, it seems to me that micro stock is simply lower priced RF imagery. Now we are seeing micro stock, royalty free, and in some cases Rights Managed photography sold along side each other. Do you think this merging of sales portals will have any ramifications?
As the quality of microstock images continues to rise, it’s logical to expect that when placed side-by-side, or even mixed into the same search result, microstock images will take away from sales of RF images. Naturally this will place further downward price pressure on RF content.
This in turn will force producers and agencies to price RF content based on demand rather than their own subjective opinion of an image’s value. There will likely be a lot of resistance to this, which could be expensive. Dreamstime’s pricing structure has done this automatically for years, but within a relatively limited range.
There are some restrictions on micro stock images. In actuality they can’t be used for anything and everything…at least legally. What are some of the typical restrictions that people aren’t aware of?
Most people are aware that a standard microstock license has restrictions on print run quantity, the number of computers the image can be stored on / accessed by, and prohibiting use on items for resale (both physical and digital). All of these restrictions can be lifted through purchase of an extended license. Some of the lesser-known restrictions which can’t be purchased are:
- images cannot be used online in an un-altered form at a size above 640 x 480 pixels
- images cannot be used in anything trademarked or in logos
- images containing models can’t be used in a way that implies the model supports a particular cause, political party, or point of view (among other things). A few political parties have been caught out by this restriction in the recent past.
Theft is an overwhelming problem in the photo industry. Do you think the various technologies to track images such as Tin Eye, PicScout, Copyright Registry and others will have a positive and significant impact?
Image theft is overwhelmingly common, and it’s a problem, but I don’t think it’s an overwhelming problem. The industry still survives, just like the music industry, the movie industry, and the book publishing industry which all suffer the same problem.
Revenue recovery - the business model where usage tracking allows rights managers to force take-down and payment for unlicensed usage - has limited, if any, application to RF images. As RF continues to further out-grow RM, tools such as TinEye and the PicScout ImageExchange provide more relevance. These specific two tools don’t use the revenue recovery business model (though they can be used for that too), but help people find the legal source of the images.
Their impact is certainly positive and valuable to image owners, but I don’t think the impact will be overly significant in the context of all image theft. Revenue recovery is much more financially powerful, though obviously not so great for PR.
Do you think it is important for photographers to engage in social media sites such as flickr, Facebook, Twitter and others?
If we’re talking about photographers in general, I’d have to say that it’s likely a valuable activity for most. If we’re talking about stock photographers specifically, I’d say that no, it’s not a smart idea for *most*. There are exceptions, which I will explain.
Sometimes, watching stock photographers with social media is like watching a professional photographer shooting with their camera in automatic mode. They’re doing it but they don’t know what they need to know to do it effectively.
Let’s look at people who are not selling direct, but selling through agencies. It’s one thing to send a few excited Tweets about their latest image that just went up on Agency X. But if they’re investing ‘work’ time and real effort to drive traffic to the agency website, why are they paying the agency 80% commission on their sales? For each five transacting customers they send to the agency, four benefit the agency and one benefits them. And that’s not counting the customers they send who end up buying images of one of the other contributors at the agency. It’s madness!
So using social media makes much more sense if you’re selling direct. Even then, there’s two crucial things that need to happen between setting up a direct sales facility and starting a serious social media campaign:
First is measurement. We all know how to measure our stock shoots to know whether they generate a profit, but not so obvious whether all our Tweets and Facebooking is generating anything at all. It’s super-easy these days to measure this stuff. If your direct sales facility doesn’t allow you to see what sales were generated by the traffic from different sources, you need to get one that does.
Second is SEO. It comes before social media because it’s usually more powerful (sends more traffic) and it’s largely automated, much more so than social media. Additionally, you can bolster your SEO effort within your social media activity by using the keywords that convert best for you and linking to your best landing pages.
Most stock photographers would also be better off investing their time and money in PPC campaigns before, or around the same time, as social media. PPC doesn’t have the same appeal of being “free” like social media, so many stock photographers overlook it. But, PPC is easier to scale, easier to analyze, and subsequently much easier to refine. Dollar for dollar and hour for hour, PPC done well is more lucrative than social media for most stock photographers.
But, none of this means stock photographers aren’t smart to setup the basics of social media right away, both to get familiar with the space and leverage the initial benefits of having a presence. It’s just not the most effective way to spend large amounts of time and money before selling direct, setting up measurement and doing SEO.
My blog generates revenue through two methods: affiliate revenue and direct advertising (paid for by the month) Neither of these methods can be directly linked to individual visitors, and so it can’t be linked to specific traffic sources. However, I average it all out and assign a value per RSS subscriber and per affiliate link click (separately by agency). This way I can assign a foggy-but-informative value to the traffic that comes from different places. With this I know that Twitter traffic has three times the value as my Facebook traffic; very useful information! I also know that people finding my blog from a Google search for “sell photos” are five times more lucrative that those finding me from a search for “microstock”. This is all basic stuff that stock photographers need to be applying to their online sales, SEO and social media activity.
Stock photographers also need to look at the type of visitor coming to their sites through social media, not just the quantity of visitors. Social media itself brings a particular demographic, and *how* you use social media will influence the demographics. Maybe the people they’re attracting are not the kind of people who buy photos, or just not the type that buy expensive photos. Traditional stock photo agencies have some very smart people working in them, so it’s not likely a coincidence that they’re not investing in social media nearly as much as microstock agencies.
Is microstock “leaving money on the table”?
Of course there are buyers who would pay more, but that’s irrelevant in this market today. A strategy of getting the maximum amount that a buyer is prepared to pay only works in markets with scarcity. For anyone who hasn’t noticed, since digital cameras became popular there are more photos around than there used to be. If your intention is to get as much as you can per sale, your customers will just go to a competitor. There’s lots to choose from.
For rare photos, particularly unique photos, and difficult-to-reproduce photos (that’s “reproduce”, not “produce”), there isn’t the same oversupply so you can strive to max out your customers’ budgets as much as you like. People who put such photos into the microstock market are definitely leaving money on the table.
But for the types of photos that do well in microstock, no money is being left on the table.
Is micro stock one word or two?
People who don’t like microstock write it as two words. Seriously! Next time you see it written as two words look at who wrote it. Chances are they’re not a fan of the business model. Everyone in the microstock industry writes it as one word.
John, you’ve written it both ways in these interview questions. Maybe you have mixed feelings about microstock. ;) Hmmm…got that one right Lee!
What advice would you have for traditional photographers who are eyeing micro?
Many successful traditional stock photographers can’t cut it in microstock. Shocking as that may seem, the two markets require different skill sets for success. People have trouble crossing over, but that works in both directions.
If they’re “eyeing” microstock the presumption is that they’re unsatisfied with their earnings from the traditional market. If that’s the case and they’ve held out this long, they need to consider whether microstock is for them. I doubt any don’t already know what you need to know to make the decision. There are alternatives besides microstock. Just because they’ve always done stock or they’re setup to do it, doesn’t mean it’s the only or even the best option for them.
If they choose to get into microstock there’s three things they must do before they get started: Read, read, and read. (a la Warren Buffet)
In the traditional stock photo market color values are clipped so isolated-on-white is actually isolated-on-250. That doesn’t sell in microstock. It must be pure 255. If you didn’t know that, there’s another 50 or so similar things you need to learn before microstock stops being painfully frustrating. Read, read, read.
What advice would you have for micro stockers going forward?
Keep doing what works and adapt what doesn’t.
Raise your production values.
Quality always trumps quantity.
Don’t outsource your competitive advantage.
Get more numerical input.
Negotiate more from new agencies who solicit your portfolio.
The optimal quantity of agencies is 1, 4 or 20+.
Video is not for everybody; only those who want to drastically increase their revenue.
And what advice would you have for young photographers are interested in pursuing stock photography as a career?
Browse through top-selling stock photos. If you don’t feel you’d be happy producing that kind of photography, stock isn’t for you.
Otherwise, know that stock provides a lot of freedom with time and creativity, but it takes a lot of time and money investment to build up a to a profit you can live from. If that sounds appealing, keep stock as one of your options.
Do you see a future for Rights Managed stock?
Of course.
On the supply side there will always be rare, highly original and difficult-to-reproduce photos. These photos, in many circumstances, will earn more revenue over their lifespan being sold with RM licenses.
On the demand side there will always be clients who need the exclusivity that RF can’t provide.
I can’t see any situation in which either of those will disappear.
What are the biggest challenges facing micro stock photographers?
For full time contributors it’s efficiency. Competition is growing. Image quantity is accelerating and quality is steadily rising. More and more people, from cheaper and cheaper countries, are becoming stock photo producers. Top agencies continue leveraging their dominance by reducing royalties. All this leads to a situation where we can no longer afford to produce photos that don’t sell well. Microstock photographers need to be more efficient in all aspects of their business to stay competitive and profitable.
For hobbyist contributors it’s quality. The long tail is now so long that odd, overly artistic and obscure images are generating less worthwhile returns. The better money is in popular images, and that’s where the quality is now very high. Hobbyists need to produce better images that can compete with those of full time contributors.
I keep pretty decent records of my sales…but whenever I try to analyze my numbers I come to the conclusion that everything sells, duplicating best selling images does not work well for me, and trying to glean useful information from my sales is an interesting exercise, but always leads me to the same conclusion…shoot more great images. It seems as though there are more tools for analyzing micro stock sales popping up all the time. What is it you would want to find out…and how would it help?
Most importantly it’s about what to shoot. Then there’s how to shoot it and when to submit it. The scale of sales volume and portfolio sizes in microstock facilitate statistical analysis. The opportunity to ‘shoot by the numbers’ is immense. Many of the tools available for analyzing the market or one’s own performance provide a great starting point for this sort of analysis.
What changes do you see happening now, or in the close future, in the world of stock and in micro stock in particular…?
Distribution is getting funky. We’re seeing a trend towards free-flow of content across markets, channels and price points.
I’m hearing a few of the smaller traditional stock agencies are having trouble attracting content. Their usual contributing photographers are not getting the same size returns they did previously, so they’re not shooting anymore, or not as much. I’ve seen a few of these agencies start approaching top microstock producers, but they’re having a difficult job convincing them to contribute. The stock photo world is upside down!
The top four microstock agencies continue to gain more market power and the rest are losing power. We’re seeing this in the lowering of commissions at top agencies and the relaxing of negotiation positions in the smaller ones. This is not a positive sign for us photographers, but it is a logical reflection of the market conditions, i.e. over-supply.
Finally, I’m seeing a widening gap in agencies - both microstock and traditional - between the technology-have’s and the technology-have-not’s. Speaking to some senior agency executives about technology can be impressive, inspiring and very educational. Others leave me scratching my head, wondering how they - and by extension, their agency - can be so unaware of what’s going on in the market. Looking at what agencies are doing with technology clarifies the picture of who’s growing and who’s shrinking.
One of the things that attracted me to stock photography over two decades ago was that success was dependent on the image…not on the individual photographer. Is that changing…is personal branding becoming an important factor in the success of an individual stock shooter?
I’m not a big believer in the benefits of personal branding for stock shooters below the very top level. Even then, many are marketing themselves much more to photographers than to photo buyers, though I’m sure it still helps sales.
For branding to be effective, a photographer’s portfolio must appeal to buyers enough for the buyer to remember their brand. That requires either significant coverage of a not-so-common subject or a distinctive style that the buyer likes. I find it amusing that people put so much effort into personal branding before having such a portfolio in place.
The bigger factor that makes stock more about the photographer and less about the individual image in microstock is agency search algorithms. The relevancy algorithms - the default search order at most microstock agencies - aims to provide quality and variety among the most relevant search results. It does this through a combination of factors, many of which are based on the performance of the contributor account, not the specific image. This makes perfect sense and works extremely well for the agency and buyer, but it does make it more difficult for a stand-out image from an otherwise ordinary portfolio to get sales.
Additionally, three of the top four agencies remunerate successful contributors more than less successful ones, through higher commissions, higher prices, or both. Together with the advantage of better search result position, the winner-takes-all effects are significant. But that doesn’t mean it’s impossible to catch up. Many people have reached the higher levels in short time periods over the past two years.
Do you think it is important for stock shooters to have websites and/or to use those sites to get more exposure for their work?
Again, not so much if they’re selling only via agencies, unless they have a unique and distinctive portfolio. There are very few examples of that.
The future of stock photography…optimist or pessimist…and why?
Whenever a market changes as much as this one has over the past decade there will be winners and losers. In this particular change there appears to have been more losers than winners, so it’s logical to be pessimistic for the majority of people in the market.
From what I read it’s uncommon for past winners to remain winners after such big changes. There’s some clear evidence that this is the case in stock photography now too, both for agencies and producers. But, the revolution isn’t over yet.
This interview may not be republished without permission.
