Show Me the Money . . .

By Ron Rovtar
Stock Asylum Managing Editor
Sept. 3, 2007


While some traditional stock photography distributors were cutting royalty percentages several years ago, micropayment companies made it fun to take pictures, offering casual shooters encouragement, praise and even a little money.

As some traditional distributors informed pro shooters that "dilution," the process of adding too many images to a photo library, would cut deeply into their profits, micropayment contributors were seeing modest, though real, income gains from selling to a growing market segment that mostly could not afford traditional stock photos.

After recently deciding that, for efficiency's sake, many of its pro photographers would no longer have a specific contact person to call with questions or concerns, one large distributor announced it would award some of its microstock shooters $40,000 in prizes and $100,000 in additional royalties.

Microstock shooters often feel exhilarated, appreciated and successful. Meanwhile, today's traditional stock photographers are worried, frustrated and angry. The only thing that is keeping some of the pros shooting is that they cannot afford to lose a dwindling source of income.

The contrast between the two market segments is stark. While micropayment companies value and encourage their suppliers, some traditional distributors have forgotten that their businesses really have two distinct products.

Distributors license pictures, of course. But they also peddle something to image creators. They sell access to the marketplace and marketing expertise.

In their zealousness to please one customer, these traditional distributors have neglected the other.

This threatens to become nothing less than a business disaster. By alienating talented photographers, some traditional distributors could lose a significant portion of their most important asset –– the photographers themselves. It is happening already. Many experienced stock photographers are leaving the profession entirely.

Now, Oleg Tscheltzoff has thrown down the gauntlet. In an interview with The Stock Asylum, the co-founder and president of micropayment distributor Fotolia addressed a photographer's version of Rod Tidwell"s frank demand in the movie "Jerry McGuire."

"Show me the money," insisted the fictional football player played by Cuba Gooding, Jr.

For professional stock photographers, Tscheltzoff contends. The money is now in micropayment.

"Tell photographers that if they are professional photographers, right now they will make more money with microstock than with a traditional distributor," he asserted.

In truth, this probably depends on a number of factors, including the style, talent, production level and expertise of each photographer. It may also depend on how many professional stock photographers make such a transition. Micropayment libraries are potentially as vulnerable to dilution as are traditional collections. If anything, micropayment collections are growing faster than traditional ones.

But Tscheltzoff's statement represents a significant change in the uneasy relationship between microstock and traditional stock.

Apparently, Tscheltzoff's Fotolia now feels strong enough to compete head-to-head with traditional distributors for professional quality creative images.

And, considering that many microstock companies treat their contributors considerably better than some traditional stock suppliers, it is possible that at least some photographers will consider making the transition if they determine that the money really is there.

Tscheltzoff offers some figures to back up his contention. He claims that a good photographer can make about $1 per month for every image in the Fotolia collection.

The company says its best photographers earn about $3 per image per month and notes that these shooters have "thousands of images for sale through Fotolia."

Some Fotolia contributors make nearly $10,000 a month, Tscheltzoff asserted, though he would not say how many of the company's 50,000 photographers are in this ballpark.

Whatever the case, it probably will take new microstock photographers some time to reach the highest income levels at Fotolia or elsewhere.

According to Tscheltzoff all photographers start at the lowest pricing level. The photographers can raise prices charged for their images after customers have licensed a number. Royalty percentages vary. However, the company says the average is 52 percent.

But, Tscheltzoff contends that there is ample opportunity for sales. Fotolia, which has offices in New York and Paris, has web sites dedicated to eight countries with most sales coming in English-speaking areas, Germany and France.

On two recent days the company has licensed more than 13,500 images, Tscheltzoff says. That is about one sale for every 170 images in the collection.

"We sell much more than any classical distributor in the world," says Tscheltzoff. "We sell more than Getty, I think."

"We love what we do. It is a great thing. We speak a lot about user generated content, but this is one of the places where people can make money with it. It is very rewarding. It is a big change, I know, for the industry, but it is very exciting."

The Fotolia web site is at: http://www.fotolia.com.