How Getty Is Killing the Stock Photo Industry

When we created the PhotoShelter Collection, we aimed to change the
face of the stock photography industry by fundamentally altering the
dynamics of how photographers were treated, and in turn, providing
visual diversity to buyers that simply didn’t exist. Tens of thousands of
photographers from over 130 countries signed up and started uploading
their images to PhotoShelter, and the buyers have followed. Each month we have
stolen sales with major clients away from Getty and have become an
increasingly large thorn in their side.

So it’s flattering to hear that Getty Images is validating our approach and recognizing our success by reaching into the flickr
community.  No other competitor in their history has forced Getty to
change their model. This is a great sign of
encouragement for us. Getty’s CEO Jonathan Klein describes this new
endeavor as “the best imagery from a fresh collection of high-quality
images chosen by us from Flickr’s diverse and prolific community.” If
it sounds familiar, it should be, something very similar is printed on
our homepage.

But rather than compare lexicon, let’s clarify some of the key points and differences of this announcement.

Klein stated in a Seattle Times
piece that the deal “for us is not significant, but it’s strategically
extremely important.” Flickr GM Kakul Srivastava corroborated this by
saying, “From our perspective, on the Flickr side, we’re not expecting
this will be a huge stream of monetization for our members…The
relationship, in the licensing piece, is purely between the
photographer – the Flickr member – and Getty Images itself.”

So,
if it’s not really about making money, what is it about? Why would the
market leader (which is now held by a private equity firm whose sole goal is to make money) strike a deal in such a public fashion if they didn’t
intend for it to make money? Why would flickr consent to not taking a
transaction fee? What is of such “strategic importance” to Klein?

The
answer is in Getty’s historical moves. It’s about locking out
competition from the industry to ensure a continued, virtual monopoly.
Getty pays flickr for an “exclusive” deal to be their preferred stock
content distributor because they are threatened by an open platform
like PhotoShelter. Consider that if PhotoShelter succeeds, not only
does Getty lose market share, but they invariably will have to give
back more of the profits to photographers because they will need to
compete for content.

As much as Getty would like to position
this move as an open embrace of the community, it’s not. Instead, it’s
a way to lock out competition, and allow them to continue with status
quo. They’re hopeful that this infusion of content can somehow staunch
the flat/declining growth of their traditional licensing revenue, and
why not? Their growth has historically been predicated on acquisition
of boutique agency content until they bought virtually everyone up, and
alienated thousands of photographers and buyers in the process.
 


In this new deal, Getty Images will hand-select photographers from flickr, and tie up their images in their standard exclusive agreement and compensation schedule. This means 20% on royalty-free images, and an average 35% on rights-managed images. It also means the individual cannot determine which images are submitted, nor set a price point or the license type. Exclusivity means that the individual cannot determine the best distribution channels for his/her images.

On the other hand, PhotoShelter allows virtually any photographer to participate. We give photographers 70% of the sale, and allow them to determine which images they want to submit and set a licensing type and price point that suits their desires. When one of our photographers made an $8000 advertising sale last week, he was pretty thrilled to learn that he would be getting a check for $5600 (i.e. double what he would have received from Getty had they even accepted his image in the first place).

More importantly, we’re trying to create a sustainable environment where contributors are nurtured and cultivated into photographers with intent to sell. Our School of Stock and Shoot! The Day event are proof of our commitment to engage and educate our community to make more money from their photography.

Klein further states, “I think photographers would be much more concerned if 2 billion images from Flickr would find their way into microstock,” and yet they are perfectly happy with the growth of iStockPhoto and taking 80% of the sale from their contributors. There doesn’t seem to be any visible commitment towards photographers in terms of protecting their rights or compensating them fairly.

We live in a free market economy with buyers dictating the dynamics of buying and selling, so I’m sure you’re wondering about the buyer-side equation. One could say that buyers are getting the flickr content that they always wanted, but the reality of this deal is that Getty is simply adding a collection that is sourced from non-professional photographers through a non-scalable model fraught with logistical complexities. They have said themselves that they don’t expect this to be a significant revenue line for them; it’s a perfunctory, competitive move that will be met with both curiosity and skepticism by buyers and that will fail to deliver meaningful diversity to buyers over time.

A monopolistic environment never breeds the diversity that Getty is claiming that is it gaining. And without making efforts to teach photographers about the commercialization of photography, chasing something like a model release after the fact will turn out to be an expensive proposition. Could their standard contributor split soon become a special “flickr” split for even less commission? When this flickr content is bundled into subscription agreements and photographers are literally receiving pennies in commission, we’ll be back to where we are – namely a set of disenfranchised photographers who believe that deflating image prices is an immutable reality of the industry.

Now before you yell that this is a case of sour grapes from an upstart, let me explain why this is more of a David & Goliath story. You see, one of Getty Images’ Executive VPs started contacting us as early as July 2006. Initially it was to use PhotoShelter technology to provide a way for non-Getty photographers to submit images. But once the PhotoShelter Collection was announced, they wanted access to our content because we provided ready-to-license, edited content from thousands of contributors around the world.

They contacted us in July 07, September 07, October 07 and November 07, and we turned them down for one simple reason: It was a terrible deal for photographers (then, as it is now), and did very little to alter the fundamental imbalance in the stock industry.

Getty absolutely knows what PhotoShelter represents in the industry and what we are trying to accomplish. We represent an incoming threat to the old 20th century way of licensing imagery. And let’s make this very clear: we’re in this to beat Getty by standing up for the photographer and giving buyers the diversity that they’ve been seeking. So let the chips fall where they may, but in the meantime, we’re gonna swing for the fences and try to change the image marketplace for good.

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There are 25 comments for this article
  1. Karel Donk at 8:48 am

    Nice post. You’re right on the money with regards to their intention. However you say “No other competitor in their history has forced Getty to change their model.” istock was able to do this. But you are right about their intention, they want to control flickr before someone else does something with it and becomes a problem. It is why they bought istock, to control it, minimize the damage and maintain status quo. Check this post also: http://photobusinessforum.blogspot.com/2008/01/karmas-rhymes-with-witch.html By owning istock, they can influence it to their advantage. The same is true for flickr.

  2. Becque Olson at 11:33 am

    Alan, I think it’s a positive sign that PSC has Getty worried, and you’ve got a good take on the situation. I imagine buyers are not unaware of the ramifications either and might even be upset to have their access to flicker blocked. Or will it be? A small nit with your post though — You write “On the other hand, PhotoShelter allows virtually any photographer to participate. We [SIC] … allow them to determine which images they want to submit and set a licensing type and price point that suits their desires. [SIC] … he would be getting a check for $5600 (i.e. double what he would have received from Getty had they even accepted his image in the first place).” I’m not here to comment negatively about the editing process: I accept that PSC is edited, even when it’s painful to me artistically! But it’s hypocritical of you to call out Getty for the same action, even if you’re suggesting they are pickier! Many times togs have posted in the forums here that PSC has turned down their best sellers — PSC is in charge of what they want to sell … so is Getty. As to the rest, glad you will never sell out to Getty!! I don’t crave the connection, happy to be with PSC, no matter my little artistic aches and pains of ego!!

  3. AdPulp at 12:13 pm

    Found on Flickr

    According to The New York Times, Getty Images will scour Flickr for images it might be able to sell. Getty editors will comb Flickr in search of interesting images. They will then invite photographers to participate in the program…

  4. Allen Murabayashi at 3:33 pm

    @Karel: You’re right, and they swallowed them up as quickly as possible. It’s just funny that Klein made the pejorative comment about flickr images ending up as microstock. @Becque: Yes, we edit the images, however you control what you want to submit, and we look at the images, so ultimately you’re still controlling the submission process, and then the pricing, keywording, etc. To us, it’s about giving you the choice.

  5. MC at 4:16 pm

    Very nice post and informative post. Maybe PSC should follow the idea and get in touch with people at photo.net, they have great photos as well. I’m also curious to see how they are going to do when their buyers realize that half of the pictures they selected already sold as RF for $1 at other micro sites. I think is a marketing thing to get flickr photographers subscribe to Getty. What a rip off, 35% for managed rights license ?

  6. Tony Collins at 4:16 pm

    Allen. It seems that Getty has woken up to the fact that Content is King. Wholly owned content aside, a Stock Agency has little intrinsic value. If content providers are wooed by a better deal and an Agency with a friendlier face where does that leave them? Will the whole thing backfire if Getty’s sheltered pros become disaffected by have to compete with new immigrants from Flickrland?

  7. Peter at 4:40 pm

    Unlike you I think this move from Getty and Flickr is good for all of us. First of all it is a great PR action for Macrostock in line with what Photoshelter has started some time ago. People at Flickr will start to think more about the potential value of their work even if they don’t get chosen for the ‘Getty/Flickr collection’. Hopefully this will also help a little to embank the enthusiasm for Microstock among amateurs. And isn’t every Flickr user still free to choose between Getty, Photoshelter or not selling his images at all? There are a lot of good reasons for Getty bashing but in this specific case I see nothing to criticize.

  8. robkalmbach at 6:13 pm

    I’ve cut and paste your final paragraph and it is now my screen saver. Well put… swing away. “Getty absolutely knows what PhotoShelter represents in the industry and what we are trying to accomplish. We represent an incoming threat to the old 20th century way of licensing imagery. And let’s make this very clear: we’re in this to beat Getty by standing up for the photographer and giving buyers the diversity that they’ve been seeking. So let the chips fall where they may, but in the meantime, we’re gonna swing for the fences and try to change the image marketplace for good.”

  9. Stephanie Pick at 9:11 pm

    Being new to the stock photography world, I for one am more than happy to have aligned myself with PhotoShelter. I know that they have my back covered even when I’m not sure what exactly it is that it needs covering for :)

  10. cybercelt at 12:33 am

    “On the other hand, PhotoShelter allows virtually any photographer to participate. ” Well not exactly. I got turned down – wasn’t the edgy stuff you where looking for I guess. Although now I see a category for Pro Stock – traditional commercial looks – maybe I tried too soon here. But end result I ended up licensing 6000 images last year through the micros and have just now begun sending RF content up to Getty. Personally I hope PhotoShelter does great in the future and shakes the industry a bit – maybe I’ll get a bigger cut through the places that will work with me. :-) You guys have a great thing going – but don’t make it sound like you’re not just as exclusive to your vision of what’s usable as they are.

  11. Boudist at 12:37 am

    links for 2008-07-10

    Getty Will Offer Some Flickr Photos For License Getty and Flickr form an alliance to start licensing Flickr photos via Getty (tags: photography business flickr getty) How Getty Is Killing the Stock Photo Industry – A Picture’s Worth Photoshelter…

  12. Chris Owyoung at 1:33 pm

    I can’t tell you how many times I’ve had to explain to new photographers that their work is something worth paying for. Where I’m from, 20% isn’t a good deal. This says it all: “but the reality of this deal is that Getty is simply adding a collection that is sourced from non-professional photographers through a non-scalable model fraught with logistical complexities.”

  13. Boudist at 6:33 pm

    Monetizing Flickr

    Getty Images – now with more cat photos. There was news this week that Flickr has struck up a partnership with Getty images to start allowing Flickr photographers to license their images via Getty. Specific details about how it…

  14. Mark Langridge at 7:09 am

    Allen, Photoshelter is great new entrant in the stock marketplace – good luck to you, the industry needs companies like yours. BUT…let us not forget what stock is. It is a commercial enterprise and the top commercial performers (in all forms of stock) appreciate this and embrace it daily. They are not submitting images to ‘hang on the gallery wall’ but multi use pieces – some great some not! These photographers will always want contracts at the best performing agencies who offer the best return on investment. Right now that is Getty. Don’t get me wrong this is not meant as a dig at your comments – most of which I agree with but many photographers derive a large proportion of their income from stock. If you are not a megaproducer like those seen in MS and don’t have material to ‘spread around’, right now 70% of very little perhaps doesn’t allow for future investment or photographer development? As an Art Director/ DOP at libraries for the last 10+ years I have seen first hand how royalties in the 15-40% range have transformed photographers work and lifestyles… Good or bad, for the more commercially minded Flickr contributors, that may be a sigificant….

  15. Robert Grubba at 7:42 am

    >Maybe PSC should follow the idea and get in touch with people at photo.net, they have great photos as well. Maybe PSC should also look for good photographers on sites like onexposure.net or pbase.com Cheers, Robert

  16. Derek Dysart at 11:14 am

    Allen. All I can add is a hearty thanks to you and Grover. When I met you two at the Chicago Town Hall last year, I knew I wanted to be a part of this. The last few paragraphs of your post here re-affirms my decision.

  17. Darrell Young at 1:42 am

    I just came back to read this for the third time, and liked it even better! I joined the stinky microstocks after Getty made me feel like an abject amateur. Had Getty been open to *unknown* photographers I wouldn’t have contributed to the downfall of photography for the time that I was foolishly submitting to the micros. As I watched my images selling thousands of times, I knew they must have value, but I surely wasn’t getting much money. I tried Getty again, to see if anything had changed. Nope! They only offered me the micro they owned, or the marvelous (for them) deal of submitting images for a $50 fee each. Then I read about Photoshelter on a stock forum. Let me tell you, I rejoiced! Here is an RM agency actually seeking new photographers. I pulled out of the micros in record time, and started submitting newly shot RM images here. I was so tickled that I wrote this little article: Then There Was Photoshelter http://www.youngimaging.com/Article-ThenThereWasPhotoshelter.asp Like many others, I have found a home at PSC. As I watch the photography market self-destruct around me, mostly due to the micros and the short-sightedness of trad/macro agencies, I see PSC as a near future leader in photography sales. I feel that PSC might just hold the line against photographic pricing destruction. Some won’t agree with me, I am sure, however, I am willing to go the distance with PSC, and encourage others to do the same. – Darrell Young

  18. anj abril at 11:23 pm

    I suspected something was going on when some of my friends who were long time flickr people tried to add their microsites affliation logos, or put some links to their port of micros on flickr, only to be blocked by them. So now, it’s so obvious they’re up to something, get flickr ppl to give away their photos for free or next to nothing. Has anyone seen the Weather sites with flickr photos? I wonder if any of the photographer know their photos are being used, FOR FREE.

  19. mateo at 11:44 pm

    MC said :”I’m also curious to see how they are going to do when their buyers realize that half of the pictures they selected already sold as RF for $1 at other micro sites”. that sums it up so well, i needed to copy / paste it as my comment.

  20. FOTOKMYST at 2:43 pm

    Here’s something I read in another forum which was discussing micro sites going pro active for disallowing to opt-out on subscriptions. I think it ‘s appropriate for this topic too: QUOTE——- Whatever happens, I hope this will work out for all contributors. I am sure the last thing we all want is a new definition to add to the disambiguation thesarus: LAUGHING STOCK = “buyers pay next to nothing for photos, contrinutors get even less. but big business for micro sites”. ——-END OF QUOTE

  21. Zyra at 4:17 pm

    Let’s AVOID Getty Images. In my opinion, their recent campaign to extract money from people by threats, and their buying-up of free photo sites in order to use the photo stock as “bait” with which to trap, catch, and persecute individuals and small companies, is an atrocity which folks should give the big thumbs-down to. I have warned about this at http://www.zyra.info/getstu.htm , and I suggest we not only boycott Getty Images, but also lobby companies using them to Avoid. Getty Images will not get my permission to use any of my images, unless they clean up their act, issue an apology, and put right the wrongs they have done. Doing various searches, it is amazing what an astonishing groundswell of opinion there is condemning Getty Images, and I am not surprised to hear stockmarket pundits claiming that Getty Images stock is at a multi-year low. If they go bankrupt, it will be a cause for celebration. That’s my opinion on the matter. Zyra http://www.zyra.org.uk

  22. Ben at 4:50 am

    One big wake-up call that is in the making is the enormous wave of excellent photography from up-and-coming photographers who are quite happy to sell photos at a reasonable rate, and, most importantly: royalty free. Apart from the cream-of-the-crop photographers and the few extraordinary photographs: the whole “rights-managed” scheme is a utter sham and absurd and out of control. When a small business owner looks to buy a professional shot of a cityscape for his company’s website and companies such as Getty et al are asking US$5000 for one photo that has a time limit for use, well, simply put, the market will adjust to fill this need for quality at a reasonable price. This has happened and is happening in many industries, especially the arts; logo artists in the UK are now forced to compete with reasonably priced logo artists from Brazil and the Balkans, etc. And business owners are getting wise. Greedy agents and photographers take note: you will be drowned in a sea of quality photography from around the world that is priced reasonably and without draconian RM. RM is unsustainable and a disgrace. The bottom line: While Photoshelter is trying to woo photographers by promising riches — buyers won’t be buying, instead, they’ll be consuming less and running in the opposite direction to find reasonably priced RF alternatives. They won’t have to run far as these alternatives are popping up everywhere. And not a minute too soon — sorry boys the party’s over.

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