Big business is based on big production, and that means business has to be automated to make big profits. An automated stock photography agency is an Internet site from which the prospective buyer can become an actual buyer without any assistance from a seller’s staff. While most online stock offerings are automated in principle, not all are automated in practice. Today’s prospective buyers often want intra-agency service like research and discussion of rights and fees. That costs the agency money in the form of expenses, and that means lower profits. The more an agency can minimize such expenses, the greater its profits will be. Enter Royalty Free. It’s automated, and it has a lower price than Rights Managed, and it requires much less service on the part of the agency because of its simplified usage criteria and flat pricing. The lower price for Royalty Free results in a higher volume of sales. More sales with controlled expenses leads to higher profitability, which is the goal.

Higher profitability also leads to searching for ideas about how to apply the profitability factors to other lines of business. That has happened. Microstock is nothing more than inexpensive Royalty Free. It’s that simple. It hasn’t been around long enough to assess its profitability, but in another year or two we will have some idea of its profitability if from nothing more than witnessing its expansion or contraction.

Now this part is purely my opinion. I don’t have the facts to back it up so it is not a theory.  It is an educated guess; a hypothetical.  I think Getty Images’ new stock photography model, Rights Ready, is part of a strategy to improve profitability by increasing the volume of automated low price sales. Here is an observation I made. Licensing a single Rights Managed image for ¼ inside page use with a press run of 25,000 in the USA for a three-year license costs $630. Licensing a similar image for the exact same use from the Rights Ready collection costs $200. Baring some uniqueness to the Rights Managed photographs, who is going to buy them when they can buy a similar image for one-third the price?  A 66% discount will drive sales to any successful business.  Why would Getty do it? It has to believe that the increased volume and decreased customer service will result in greater profitability. The low price/high quality nature of Rights Ready will increase the volume of sales. The decrease in customer service will be a result of the low and flat pricing. No need to negotiate when you save 66% off the bat. No need to discuss specific rights when the flat price includes a license and image size that allow you all the leeway you need to maximize the use of the photograph. It’s good for the agency and good for the buyer. Is it good for the photographer? It could be depending upon the level of the increased volume of sales. Some photographers are doing quite well in Royalty Free and some are even doing well in Microstock based upon the volume of sales made. That will be true for Rights Ready,

It seems that Rights Managed stock is quickly becoming a point of reference that is used to demonstrate to buyers just how good a deal they are getting when they buy an alternative to Rights Managed. People buy more when they are getting a good deal. With three flat pricing models now available the multi-layered pricing of Rights Managed stock photography might evolve to being acceptable to buyers who cannot find the image they want anywhere except in a Rights Managed agency or when some level of exclusivity is wanted. The evolution of the stock photography business continues. Photographers must evolve with it.

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