27. The Future
Microstock sites are hot today. Many amateur photographers and illustrators make some decent pocket money with them at the moment. But how long will this last ? Are Microstock sites here to stay ? Or will this model collapse because of the massive downloads and cheap prices ?
Of course I don't have an answer to all those question. But underneath I'll give you my opinion as I see it at the moment
27.1. Dilution of earnings
For the moment many contributors make $1 / image / month from Microstock sites or even more. I find this a pretty good number which makes Microstock sites worth the effort, but ...
27.1.1. More and more contributors
The number of images needed by buyers needs to be divided by the total number of contributors. The more contributors, the less downloads per contributor.
Therefor I was wondering how many photographers are joining today in comparison to a year ago. Underneath you see 2 graphs with the number of contributors over time for Shutterstock and Dreamstime.
On both cases we see that at the moment still a lot of new contributors join Microstock sites. So we can expect more dilution of earnings from that side.
27.1.2. Constant stream of new images
28.179 new photos added in the past week
This is what I've just read on the homepage of Shutterstock. 28.000 new images added in one week. At this pace shutterstock adds 1.500.000 million images each year. This is a lot. You wonder who keeps buying all these images.
At the moment buying all these images still makes sense because the quality of the new images is much better than the quality of the images of a year ago. But this improvement in quality won't last. What will happen than ?
27.1.3. The Professionals
More and more professionals seem to join Microstock sites. Two of the biggest players I can think of are Iofoto, with a portfolio of almost 10.000 (which in fact is Ron Chapple - website) and Yuri Arcurs, who sells 400.000 images a year (real name Jacob Yuri Wackerhausen - website). They both employ several people and for both Microstock sites are just a small part of their business. Nevertheless they make images in quality and quantity which is hard to match by most amateurs.
As more and more of such large players enter the market, small amateurs will certainly have a hard time
27.1.4. Cheap Labor
I also see many East European photographers creating a large portfolio. I couldn't figure out why especially East European photographers were that successful. Until I realised that their cost of living is a lot less then this of their North European colleagues. But they are all paid in the same currency -> $$
For those contributors out of Poland and Russia for instance, a single $ is much more worth than for me for instance (living in Belgium). Meaning that Microstock sites are more profitable for them.
This made me wonder how long it will take until someone from India or the Philipines, with their cheap manual labor, comes to the idea of doing Microstock sites in the way Iofoto or Yuri Arcurs are doing. They could flood the industry with images and still make a decent living out of it.
27.1.5. Conclusion
The constant stream of new contributors, and with this the huge amount of new images added daily, and the entrance of professional photographers makes me wonder if we can expect the same $/image return in the future as we have today.
27.2. A positive note
Until now nothing than doom and gloom. Isn't their anything positive about the future in Microstock sites for amateurs to mention ?
Yes there is !
27.2.1. Increasing demand
Until now we saw how the increase of supply could bring the $/image return down. But this assumes that demand will be stable. What if the demand for images rises ? Is there still room left for an expansion ?
Honestly I don't know how much room for expansion there is left. I think only insiders can estimate this. But I do know that I receive the most downloads (about 50 tot 66% I guess) during US business hours. Therefor I think there is still room the grow in Europe and especially Asia.
Besides geographic expansion I think demand can also grow from the fact that not everybody already knows that you can buy images that cheap. How large this growth can be ??? I really can't answer that, I only 'think' or 'feel' there is some growth left.
27.2.2. Increasing prices
An other fact that could increase the $/image return is the fact that royalties are going up instead of declining. I found that very strange !
We are in an environment where at least 4 big sites are competing against each other. You would think that this competition will drive prices down. But this isn't the case. In the past year I've experienced several significant price increases at all sites.
This tells me that prices for images are still to low at the moment and that an increased image price isn't bothering the buyers (otherwise sites wouldn't lift their prices of images that make more profit, but instead they would drop the royalty ratio for contributors).
In the end we will find an equilibrium between the price a buyer wants to pay for an image and the price a site asks for that image. But that equilibrium isn't yet there. I think prices, and therefor royalties, will rise further in the near future.
27.3. Overall conclusion
While there are certainly some factors which can bring the current $/image return down, there are also factors which can off set this dilution. The microstock industry is a young industry and will definitely evolve over the next years. If such an industry will still be profitable for the average amateur in the future is hard to tell.
I guess we just have to take it as it comes but I certainly won't rely on my microstock income to make plans for the future. Therefor the future of this industry is to uncertain.
27.4. Related Links
| |
|
| |
Dan Heller |
|
A lengthy article on how Dan sees the future of stockphotography |
| |
| |
|
|
|
|
