The microstock photography business is growing out of nothing. The leader in the market, iStockphoto, is projecting $200 million in revenues this year. When iStockphoto was bought by Getty Images February, 2006 for $50 million, its revenues that for year were about $23 million, according to COO Kelly Thompson. In 2007, revenues were $72 million, and the company never disclosed 2008 revenues. (Update: Thompson says 2008 revenues were around $150 million). Thompson says iStockPhoto has been profitable since before the acquisition and now represents a “significant chunk” of . (Getty Images is owned by the private equity firm Hellman & Friedman and does not break out revenues formally via audited statements).
The demand for affordable images for use on Websites and in print is catching on and iStockphoto is the main beneficiary. It sells a photo, illustration, or video every second, and pays out $1.2 million a week to the photographers and artists who upload images to the site. There are nearly 80,000 artists in total represented on the site and 5 million images. “Definitely the print side is declining and we are seeing lots of Web usage,” reports Thompson.
But iStockphoto is not without competitors. Rival Fotolia is trying to catch up and recently received a massive cash infusion from TA Associates. It has about the same number of images and recently launched a completely free stock image service called PhotoXpress (which competes against Getty-owned Stock.xchng). Fotolia also has about 6 million images and roughly 90,000 contributors.
The battle, though, is now going to be around quality and price. iStockphoto is trying to go upmarket by exposing some of its top photographers to Getty clients. And today it just launched its Vetta Collection, which is comprised of about 35,000 higher-quality photos which are more produced than the typical stock image (the space farmer image above is one from Vetta). The Vetta images start at around $20 each, compared to regular images, which start at about $1.
Thompson says it is all part of iStock’s strategy to move customers up the chain to buy more expensive images:
Almost every industry has a free component, everyone gives away free samples. That is what we are doing. Even when it is free, it needs a license around it. Once people get used to using images like that, they move up to buying more expensive images. Even the traffic from iStock to Getty is more than we originally expected.
Image search is another area where the iStock needs to win. People need to find the images they want before they can buy them. iStock relies on photographers and artists to tag and title their own photos, but they don’t always do such a great job. After all, they tend to be more visually-oriented. So instead, iStock has been collecting data on which images people hover over and click on after they do a keyword search, and those now are ranked higher in results starting today. By August, the results will be fine-tuned by language and country of origin as well. But if you want to search only for Vetta images, you have to do that in advanced search right now (by tomorrow, you should be able to do it directly on the Vetta portion of the site).
Hi Erick,
Very interesting post. I’d like to see who wins in the end – iStockphoto or Fotolia?
Mani Raj
Havoc Marketing
As a web designer who is always purchasing stock imagery for his clients I can say that I swear by (and thank the day that it was launched) iStockphoto.
The costs are reasonable and after reading this article I’ll be looking for their ‘higher end’ stuff for my clients who can afford it.
Interesting post
We’ve been working on a large-scale stock photography project for some time now, it’s definitely a booming business…
Good post.
Microstock images have gotten big but microstock music is in the 2nd inning and there is an interesting player in that space called Audio Micro (www.audiomicro.com). I’m not an investor there but the CEO is talented and came form the images world.
Micro stock is proving to be the preferred content licensing model of today. iStock’s revenues are impressive and the FY 2008 number that you were missing was around $122 million according to some Goldman Sachs slides from the Hellman and Friedman privatization. This $200 million now makes up around 20% to 25% of Getty’s total revenues and this licensing model (micro stock) didn’t even exist in the Getty financials until 2006. This is certainly a space to keep your eyes on.
What is AudioMicro? Do you provide consulting for businesses looking to grow their own license-based internet business?
I tried a bunch of photos on both these sites, but got rejected – needless to say, my technique needs a “little” improvement
http://picasawe...aibhav.gadodia/
You might want to try http://www.snapixel.com
Hey Vaibhav. We’ll take your photos over at ClusterShot.com. We think every photo deserves a chance to be sold.
Are all the photos only accessible through iStockphoto or can you find them through external searches in image searches in Google and Bing?
The global market for music licensing is actually bigger than photography and video put together and will probably head the same way.. ie polarized – Micro/low cost and rights managed/hi cost, nothing in the middle.
The problem with that is that its much easier to “rate” a picture by quality, not so easy with music, which is a whole lot more subjective.
It is interesting to see how an old school media business has made a successful transition to the web. Unfortunately for many newspapers, they did not do the same.
Istockphoto is great….I use it all the time.
I’ve been using them regularly for awhile now and love it!
Funny how many predicted the “end” for the stock photo business on the web just a year or so ago, and now this company is growing.
Interesting development in the image licensing business. Shutterstock and Dreamstime are also big players in this field and few other dozen sites try to catch up with them….
Fotolia is great ! Same quality as istock but cheaper
Not even close. I was just at an event with some iStock folks, and they showed how, on average, they were 5x or 6x cheaper than Fotolia per page of search results. They said it would be slightly closer with the launch of Vetta, but still much cheaper.
Most of this is because Fotolia is selling really expensive images from Image Source (I think that’s who it was). Interesting, cause they don’t seem that good. Certainly not worth the $500 they’re asking for some of them. Maybe they are Image Source seconds or something. After a quick look at iStock’s new collection, it looks much stronger than what’s being sold on Fotolia for $500
IS cheaper than FT? U must b kidding. Just do the math. Compare IS #3158746 vs FT#3283602. A lot of images are available on both sites…
I said “on average”. Take all the results from a search page on both sites, and do the math.
Fotolia also has that weird algorithm that makes more popular files pricier, so XS files on Fotolia can be 2-3x as much as iStock.
The space farmer needs gloves
Yeah, my assistant forgot the gloves, oh well.
Couldn’t live without istockphoto. Have been using it for years.
Although I must say their prices are getting increasingly steep, but still you pay for what you get.
Wonder if they regret selling … looks like Getty got a smoking deal …
It would be interesting to know how many photographers make a decent living from selling photos on iStockphoto. Their base royalty rate is a rather paltry 20%. Exclusivity earns you up to 40% (although you need to meet their qualifying criteria before you can join their exclusivity scheme).
Well as mentioned in the article, at $1.2 million a week to contributors, it’s gotta be quite a few. And if you do the calculations, (1.2*52)/200 gives a 31.2% royalty rate. Probably about right for a business (although I’m sure the photogs would take more).
While pricing may be deflating in some areas of stock photograpy and increasing in other areas, the key issue for buyers is finding the right images. The article correctly states this is a growing issue as the volume of images is only growing more by the day.
BrightQube, (www.brightqube.com) has created an innovative visual search platform to solve this problem. With over 3 million images and growing, from $1 images from Dreamstime to high end images from leading stock brands, BrightQube focuses on delivering superior visual search through an online display engine that saves image buyers time in getting in front of the right image quicker than ever before.
The key to growth is around developing robust and innovative ways to retrieve and display results. Then all participants have a greater shot at equality and e-commerce.
Oh BrightQube. If anyone actually visited the site, it might actually matter.
“The key to growth is around developing robust and innovative ways to retrieve and display results.”
You’re right. And if you knew anything about UX, you’d know that solution of putting the most ‘relevant’ results in the middle of the page with zero point of reference is a huge FAIL.
iStock has been slowly but surely increasing their prices and moving up-market. They’re going away from the original model – a community for semi-pro photographers to get their stuff out to a new market that was developing, as the web developed, for much less expensive images. Since the purchase, Getty appears to be trying to turn them into little more than a slightly more accessible Getty.
I’m very interested to hear that they’ve increased their profit by moving in this direction – they clearly know what they’re doing! But they’re certainly leaving the back door open for a new iStock to emerge.
I’m a case in point: as someone who produces a lot of compound images for the web where the raw image quality is not as important, I found them invaluable for many years. However, they lost me about six months ago to sites that hold more to the original ethos.
I know how has been taken the first space photo