Royalty-Free in the Middle . . .
By
Ron Rovtar
Managing Editor
October 17, 2005
( Editor's note: this is the second of three articles that will discuss the future of the stock photography industry. )
Let's be clear. Traditional royalty-free stock photography is not going away during the next 10 to fifteen years.
However, like the middle-aged guy who plays basketball on Tuesday and reports to the hospital with severe chest pains on Friday, royalty-free is facing some serious lifestyle changes. It just doesn't know it yet.
This may seem an odd assertion at a time when many former royalty-free critics are being won over. But, as pendulums reverse direction when the weight loses momentum, hot products lose their sizzle when hype dies down.
Tuesday's rim warrior is Friday's heart patient.
Change happens quickly today and traditional royalty-free -- especially in the fickle commercial market -- is starting to look a little tattered around the edges.
Consider these developments:
Subscription services (which let users download nearly unlimited numbers
of images for a single monthly or annual fee) are poised to cut the
legs out from under royalty-free as we know it. Buyers wanting lots
of inexpensive, always available artwork will find nothing better than
these newly-created subscription smorgasbords.
Recent technological advances have turned a spotlight on copyright infringement
in stock photography. The financial loss is staggering. And, unlike
the rights-managed segment, royalty-free offers no option for gaining
control of the problem. At some point stock sellers will have to respond
to this problem and that may mean reducing their commitment to royalty-free.
Commercial photographic styles are becoming much more complicated and
labor intensive. This will put pressure on royalty-free which, to be
profitable, requires rapid production of large numbers of images.
Every year royalty-free sellers find more ways to force the same images
into the same markets, geometrically increasing the possibility of embarrassing
or conflicting co-uses. Buyers have been slow to catch on to the risks,
but eventually they will.
Subscription services clearly represent the most immediate threat to traditional royalty-free. The two pricing models appeal to many of the same customers -- those who want cheap and easy photography downloads. To make matters worse, many companies offer the same images to both subscription and royalty-free clients, which will damage the traditional product in two ways.
First, subscriptions will entice customers away from royalty-free by offering the same images at lower prices. Suppose you told a patron in a well-stocked clothing store that he can buy a pair of slacks for $40 or, by paying $100, have the slacks and anything else he can carry home. Unless the patron has a very full closet (or money to burn), it's hard to imagine he would not take the $100 deal.
Second, as distributors raid their royalty-free collections to create subscription services, the traditional side risks its reputation through association with new services. Without question, subscriptions are for the budget-conscious and everybody knows it. Will buyers transfer this assessment to the older product? It is a real risk.
But, the alternative, the creation of new collections for subscriptions, would be a massive undertaking with a relatively low payoff since the two pricing models have many buyers in common. Don't expect this to happen anytime soon. Do expect more royalty-free collections to offer subscriptions as time passes. Some plans are already in place.
Then there is perhaps the dirtiest little secret about twenty-first century stock photography -- the high level of copyright infringement and the inability to control it in the royalty-free segment. At some point, the industry needs to do something about this, but what?
"Over 85% of cases that we find represent unauthorized use of images." asserted PicScout CEO Eyal Gura, recently. PicScout uses sophisticated software to locate rights-managed stock images on the internet and, recently, in magazines. Clients include Getty Images, Superstock, Index, Masterfile and others.
Eighty-five percent! Is it possible that distributors collect on just 15 percent of all internet uses?
Imagine standing at the door of clothing store watching more than four-fifths of the inventory stroll out the door unpaid for. Imagine further that the store owners shrug their shoulders, claiming impotence.
You've just pictured the future (or present) of royalty-free stock. If in fact 85 percent is an accurate figure for the theft of rights-managed images used on the internet, then a good case can be made that royalty-free will see even greater percentages in the near future.
PicScout and another company named Digimarc do a credible job of finding infringers of rights-managed stock and those infringers are being contacted and required to pay up. Some are being taken to court.
Cheaters will undoubtedly turn to royalty-free once they learn the consequences of stealing rights-managed imagery. Unlike rights-managed distributors who keep detailed usage records, royalty-free sellers keep no usage histories, making it impossible to track infringements.
How
long can the distributors of these collections look the other way?
Maybe until a few of the publicly-traded stock photo companies fall
short of their revenue and profit numbers. Wall Street is not generous
with under-performers. Analysts and shareholders get pretty surly when
they know a company could be collecting a whole lot more money.
So, how will sellers control theft of royalty-free? It appears they cannot. And this simple fact may eventually lead some distributors to consider restructuring or even eliminating the royalty-free product. That may sound like heresy today, but one should realize that stock industry revenues have been stagnant or even slightly down over the last ten to 15 years. This is not a particularly healthy industry. Sooner or later companies must make some tough choices or risk some even tougher consequences.
There also is the question of changing photographic styles, which tends to shuffle the industry cards every seven to ten years and threatens to do so now.
Few people understand that royalty-free was not nurtured entirely by the gathering digital age. Computers certainly had much to do with it, but the idea that royalty-free's success was inevitable is simply not true.
Like most social and business phenomenon, royalty-free was successful because two or more events converged in a unique and interesting way. You cannot create a spark with just a piece of flint. You need something to strike it against.
In the case of royalty-free, an important "something" was changing photographic styles in commercial and editorial photography.
It is hard to say exactly where these things start, but an early catalyst was the opening of Photonica's office in New York at the start of the 1990s. Against a chorus of "wonderful photography, but who's going to use this stuff," Photonica proved that even the most artistic, creative and unusual stock photography can find a market among graphic designers and advertising professionals.
Professional lighting all but disappeared. Photographers probed what Photonica editor Gregg Lhotsky called "the details of life." (Lhotsky was responsible for much of the original Photonica look in the United States.) Freed of all the extra equipment and encouraged to use their instincts and brains, perceptive photographers created some of the most enduring work of the last 15 years.
Soon Tony Stone and several other stock agencies picked up the idea with more of a traditional commercial twist.
But, details are easy to shoot even if you don't have the heart of an artist and anybody with a camera and tripod can photograph without lights. The soul of the Photonica look was very hard to replicate, but, alas, the style was easy. And the style -- some called it "edgy" -- became very popular.
It also became the mainstay of royalty free, which needed a lot of photography produced quickly at very low costs. The fluorescent lights turned the picture a little green? "Cool!" Want to show the concept of financial stress? Why hire a model? Show a penny in a common c-clamp. Make it grainy. Pop the contrast. "Great!"
Royalty-free certainly has imporved since those days, but creative professionals keep asking for new ideas. Sophisticated lighting is definitely returning and today's best photographers pay incredible attention to styling, setting and story-telling.
Check out the illustrative work by Jim Fiscus and Aaron Goodman or some of the fashion/beauty photography coming out of the studio of Douglas Bizzaro and Elizabeth Moss -- careful lighting, great styling, wonderful execution.
These examples may be a little extreme, but we won't see much of this kind of time-intensive work in a royalty-free collection if high-speed production companies produce most of the images. It is simply too expensive.
The commercial photography aesthetic is changing. And that will make it much harder for royalty-free and subscription services to keep up, which will lead buyers to seek out other sources, including rights-managed stock and assignment photography.
Finally, there's the old question of overuse, which never became the huge problem that the original royalty-free critics predicted years ago, but which refuses to go away as the product becomes more widely used.
The "Everywhere Girl," an academic-looking young woman in an education setting, has appeared in numerous places, including competing back-to-school ads for Dell and Gateway computers.
In another example, three French internet companies simultaneously published an image of the same adult woman on their web sites. And countless web sites have featured George Chen, styled to look like a geeky computer nerd. He's still around, recently showing up on the Cannon-Europe web site.
Such problems have caught the attention of stock buyers, but only peripherally. The risks of embarrassment -- of losing clients over such gaffes -- still doesn't outweighed the benefits of price and simplicity.
However, as discussed briefly in the first article of this series, distributors are now marketing the same images in numerous venues and in new ways like subscription services. That may change the way buyers perceive the problem.
For example, Getty Images' popular Photodisc collection also sells from the web sites of Veer, Punchstock, Inmagine, Adobe Stock Photos and others.
Extensive cross distribution is common. One executive recently noted that more than 100 subdistributors offer his company's royalty-free product. Such market saturation makes overuse of the best images a certainty.
At some point, creative professionals will take notice, especially in a day and age when internet web sites enjoy reporting unusual juxtapositions of the same (or similar) images. People don't have to be burned very often before they shy away from a product.
In fairness, royalty-free and subscription services both promise to upload fresh images on a regular basis. But, it is a good guess they will not remove the most popular images no matter how often those images are used. These are exactly the images that are attracting new customers.
And that's the dilemma. It doesn't really matter if there are a million royalty-free images out there. What matters is that buyers frequently choose a few thousand of the best without knowing if they are buying a fresh image or one widely circulated by competitors or manufacturers of sexual products.
Clearly, traditional royalty-free faces some difficult times. It's a product stuck between the old and the new with nagging problems of its own.
Still, as noted above, it is not going away anytime soon. There are just too many royalty-free images out there and, other than converting them exclusively to subscription images, there is not much else to be done with them. Once an image is sold as royalty-free, it can never be ethically sold as rights-managed.
So the traditional royalty-free product will remain on the market for a long time to come. It may even grow slightly in popularity over the next couple of years as more than a decade of momentum slowly dissipates.
But, there is little question that momentum will decline over the longer term of 10 to fifteen years. The big question concerns the successor product. Can subscription services ever be as successful as royalty-free in the commercial market? Or will subscriptions always be for low-end users?
Only time will tell.
( Next: the big picture. Some conclusions about stock photography's future. )
Getty Images is at: http://www.gettyimages.com
PicScout is at: http://www.picscout.com
Digimarc is at: http://www.digimarc.com
Jim Fiscus' web site is at: http://www.fiscusphoto.com
Aaron Goodman's site is at: http://www.aarongoodmanphotography.com
Douglas Bizarro and Elizabeht Moss's site is at: http://www.dbem.net
Veer is at: http://www.veer.com
Inmagine is at: http://www.inmagine.com
Punchstock is at: http://www.punchstock.com
Adobe Stock Photos is at: http://www.adobe.com/adobestockphotos
