Rights Protected refers to licenses that have some level of exclusivity. For example an exclusive license to use a photograph might be for consumer magazine advertising in North America for a period of two years. That means you cannot license the same photo for use in advertising in consumer magazines in North America until the two year term expires. With the exception of the exclusivity Rights Protected licensing is the same as rights managed licensing.

Rights Managed was once the only licensing model for stock photography. It involves licensing non-exclusive rights for the use of images with the fee being based upon a series of factors: size, placement, and duration of use, media kind, type of publication, whether editorial or promotional, geographic territory and languages of publication and press run or circulation. The number of factors dictates and intricate pricing method as the price changes each time any factor changes.

Royalty Free was the game changer for stock photography. Contrary to its name, it is not free of royalties. It is just less expensive with the price being dependent upon fewer criteria. It involves non-exclusive licensing for images that usually will not run over a full page in size. Of course, more than seventy-five percent of all images are reproduced at one-quarter page or less in size. So Royalty Free stock suits many purposes.

Micro Stock is the new kid on the block. It involves non-exclusive licensing for a broad range of uses and at the lowest prices in the marketplace. You might say that it is the extremely inexpensive Royalty Free stock. Being very new in the marketplace, no one can adequately summarize the model because it is still evolving.

The best resource in strategic planning for the future is a good knowledge of the past. If you understand how a business evolved and the reasons for it, you can better forecast what future evolution of that business might be. With that in mind, let’s look back and to understand how stock photography got to the point it is at today. I’ll use one example and carry it through the years from 1970 to 2006. Here is the situational scenario. A hotel near a Civil War battlefield is doing a brochure. They want a scene from the battlefield in the brochure to show that the historic location is nearby. They would prefer it to be propped with a cannon to get the battlefield idea across. Let’s see how that is handled differently along the timeline mentioned above.

1970 - The hotel hires a photographer for an assignment to shoot the scene for the brochure. Stock agencies are fledgling enterprises and have little inventory. The photographer charges a day rate plus expenses.  
1980 - The hotel contacts a stock agency and buys non-exclusive (rights managed) brochure rights and pays a licensing fee that is substantially less than the 1970 assignment fee.
1995 - The hotel finds such a scene as a royalty free image and pays substantially less than it paid in 1980 for rights managed stock.
2005 - The hotel finds such an image as micro stock and pays ten percent of the fee it paid for royalty free.

What is the obvious trend in the above timeline scenario?  Right. Every decade the price gets much lower to get the same kind of image for the same kind of use. You will wonder why, but that is not important to know beyond the fact that the stock photo supply outpaced the demand and that drives prices down, and then entrepreneurs try to capitalize on the price drop by making even lower priced models. In 1970 the photographer received $300 for the assignment (equivalent to about $900 today). In 1980 the photographer received 50% of $150 rights managed licensing fee.  In 1995 the photographer received 20% of the royalty free licensing fee of $50.  In 2005 the photographer, received half of the $5 licensing fee.  Then the hotel’s needs change and suddenly the fee goes up

2006 - the hotel is unhappy that the same photos it has been using are showing up in its competitors’ brochures. It finds a new image and it buys exclusive brochure rights (Rights Protected) for a fee of $300. The photographer gets between 40 and 60 percent depending upon what agency he or she is with.
 
So what do we do with the above information? We learn that new images, if the rights are protected, can be worth more than many other images licensed non-exclusively. We learn that as long as photographers fuel the lower priced licensing model options with images the price of the images will continue to drop and the photographer will make less and less money. But we recognize one thing. Many licensees want very inexpensive images, and the marketplace is going to supply them a no matter what you do to try to stop it. The question you have to ask yourself is whether you participate in the market, and, if so, at what level(s).  We’ll explore the answer to those questions in the next installment.

Go to Part 3




(c) 2006 Richard Weisgrau [contact] [bio]