When rights managed stock was dominant, royalty free forced the price of rights managed stock to be static and eventually to decline. Now royalty free dominates the market and the fees for its use have gone up slightly over the years. But now there is a downward pressure on royalty free prices from right managed stock. There was and is a substantial price difference between the two. Buyers know that difference, and so the price relationship becomes a gauge of sorts. Buyers watch space between the two needles on the gauge to get a feel for the price level in the system.

Now royalty free providers have finally realized that they created a monster that has gobbled about 65% of the market but with fees that are less than half of the rights managed stock sales being replaced. The volume of royalty free sales is not high enough to offset that decline. So agencies have been slowly inching up the price of royalty free stock in an effort to earn a better profit on its sales. That makes perfect sense, but the price of rights managed stock is now holding the price of royalty free down because of that buyers’ gauge I mentioned above. If the two needles of that gauge get too close to each other, buyers will feel duped. Then buyers will begin to look for bargains because their budgets will not grow in proportion to the prices.

It’s a classic catch 22, i.e., a double bind. One way to stop the negative drag of a double bind is to get rid of one option. But if royalty free were dropped the majority of stock buyers would revolt. If rights managed were dropped, many photographers would revolt. The best way to undo a double bind is to get rid of both options. That is why I think both rights managed and royalty free stock models have to go. They are working against each other and that is not good for the agencies or the photographers they represent. In fact, I am not sure it is good for the buyers either because the mass production of royalty free stock is simply flooding the market with less than exciting photographs.

What we need is a new licensing model that offers a compromise between the two existing models. That new model ought to have a name that suits it and that is not a misnomer like rights managed or royalty free. Gee, maybe we could have X Stock and NXStock.  X Stock would be what we currently call rights protected, that is, stock that can be licensed eXclusively. NX would obviously be Non-eXclusive. Hopefully, with only one major model in each of the exclusive and non-exclusive markets micro stock would not take hold the way royalty free did. This time around there is ample evidence from the history of royalty free that a cheaper alternative grows rapidly in supply and quality but not in price.

Only agencies have the clout to develop a new stock licensing model. But agencies will fear collaboration on such things because of the anti-trust laws. Of course, discussing a new licensing model is not likely to violate anti-trust laws unless the prices for the rights are discussed. If a new stock photography licensing model is going to be developed, it will require that agencies see the wisdom of it. Can photographers help force a new model to be created?  Indeed they can, if they want to. They have to begin talking up the matter among themselves and start talking to their agencies about it. Some agencies will listen, if the idea is presented properly, that is, not as a demand but as an improvement.

Should photographers want a new model? Indeed they should because it will mean more money in their pockets as I see it. Rights managed providers would experience a drop in the fees per rights, but without royalty free in the picture the volume of sales would more than double. Royalty free providers will experience a drop in sales volume, but the increase in fees should offset that drop. It makes no sense to me to have photographers and agencies offering product lines that compete with each other. A single licensing model would be the first step back to what used to be a good business for agencies and photographers.

I promised readers insights into developing personal strategies. Strategy should always have both long term and short term aspects. You have just finished reading my thoughts about long term strategy. In the next installments I will provide readers with some ideas on shorter term strategies for making stock sales.

Go to Part 4

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