Microstock Group - A meeting place for microstock photographers

As promised, here's our Year 1 report for the iofoto collection. We started uploading January 2007.

First and foremost- the entire microstock community should be really pleased with the amount of information sharing, both members and distributors. For a stock shooter with 25 years of trying to make a living in stock, simply the concept of re-ordering search results by "Downloads-Descending" can be called a phenomenon. This is the type of information that used to run up our bar tab!

As most people know, I diversify my stock revenue through rights-managed, traditional royalty-free, midstock and microstock distributors. Overall, our strong growth in the past 12 months has been at the high end and low-end. In one metric outside of microstock, 26 out of 30 best sellers were rights-managed with the very top RM images creating over $10,000 each in revenue. Likewise, we had select microstock image productions returning close to $10,000. I use the term "production" as we look at the specific ROI on a shoot basis. Where RM is all about usage rights and exclusivity, RF is about maximizing a production since those images might be offered as both single image or subscription downloads.

Another critical metric is not the average number of downloads per image, but our "sell-through" rate. That's the number of images licensed one or more times divided by the total number on the site. We average 60% or higher on the best performing sites, and probably 95% or higher on a subscription site. This is the true bottom line when it comes to reviewing your past work- look at the number of images that have actually produced revenue.   Specifically, look at your "sell-through" rate in reverse... If I licensed 60% of my images, that means that 40% of my investment did not produce any return! Remember that at some distributors, the default search order favors best sellers so that new clients see already proven images. In this case, new images are swimming upstream until they get a few downloads.

Sell-through rates should naturally increase over time. Having  diverse portfolio that targets a diversity of keywords will help. My business goal has always been to have a consistently selling portfolio. Our sales might not always be the highest, but every month we're guaranteed revenue. I have images produced over 15 years ago that are still providing healthy revenue.



The chart above is our monthly revenue. There's no numbers, just trends. We saw the typical summer slump- which unexpectedly extended into September- usually a strong month. December was seasonably down as well. Again, as an ode to diversity, our RM December sales were really strong. Last month, January, was our best month ever exceeding our November by 4%. While the percentage increase isn't huge, January is really only a "3 week" month. For various reasons, we uploaded very few images in both December and January which makes January a good base level to analyze future efforts. We're back uploading this month with another 1,500+ images.

Are we making money? Yes, we're creating strong revenue, but no, we're not quite break-even. At the current growth rate, I would anticipate positive returns within the next 6 months. In just my business perspective, if you can break-even in stock within the first 3 years, all is good!  Most businesses can take 5 years or more to return a profit.



The above is a chart of January sales by distributor. Look at this with a very critical eye- not every distributor has a great month, every month. Not all distributors have all iofoto images. On several sites, we have less than 50% of our collection represented. On others, our recently uploaded images are still swimming upstream. Some of the sites in the lower tier may be on top a year from now- the microstock industry is too new and there are too many industry changes that may affect sales. For this reason, we are hesitant to commit to exclusivity. A really strong marketing campaign, partnership, merger or alliance amongst any of the distributors could change the dynamics in just a few short months.

I anticipate microstock/midstock to continue to be a strong part of our overall revenue, but certainly not the only revenue source. Diversification is good and we're investing significantly in RM this year as well. As microstock/midstock prices rise, not only the photographer but the client and distributor will all benefit. In the end, we're all in the business of delivering images that clients need!

The sharing is really important. Thanks to everyone on this forum!

Ron

Great post. If you have any other graphics that show the trends at specific sites that would also be very interesting.

Very interesting information, Ron. Thanks for sharing.

you would have to go to all the sites, and check out which images have sales or not.

Go to dreamstime for example, look at your portfolio and order then by sales.   You will easily see which images have sales and which don't.

Sorry Tomasz... I wasn't clear. I look at the "sell-through" rate for all time, not on an annual basis. On Dreamstime, the number is right above your Earnings Balance ("Showing 1 of 20 of ____ Images") break-out. Just divide that number by the number of images you have on the site. I'm sure your sell-through is much higher than mine because you were smart enough to get into microstock 3 years ago!

We have just started uploading to BigStockPhoto, and looking forward to good relationship!

Ron,

Thank you so much for sharing your experience and market statistics as well as your future insights into the future of your portfolio.

Leaf
I am really glad MSG has created an open forum where people do not treat one another other as  the competition but rather as a common community or a guild that is able to share and learn from each other's experience. Here we see it at the highest level sharing with those of us aspiring to do better each day ...

Mark

Could you share the numbers?

BTW, I heard you laid off most of your staff in December.  Is that true?  How is that affecting your bottom line?  Are you doing the same type of shoots?  Has your gross vs. net on new shoots improved?

Well this news doesn't surprise me.  If the massive decline in Getty's share price reflects falling demand for 'traditionally priced' stock images, then surely the photographers who supply Getty (and other agencies) must be suffering too.  And the price reductions at those agencies can't be helping much.

Good job Ron had the foresight to diversify into Microstock a year ago, but I cannot imagine the income generated from that is enough to replace income lost elsewhere (not yet anyway).

This story reminds me of Yuri's situation.

One thing I've wondered, and the same with Yuri, is how you can find people who shoot and process to work for you, when they could just be submitting on their own and having their own success.  Do you end up having to pay them more than as staff because of the uncertainty of their position and loss of any benefits?  I guess this is more of a staffing type question.  Perhaps you can give some info in that regard.

Along the same lines and in light of your success, what tips can you give everyone else here to compete with someone who is shooting the same stuff they are, but in bigger volume with a freelanced staff?

Ron, thanx for sharing all this information!

Of course I agree it is good to diversify, but naturally one want to invest most time and money in the markets which bring in the highest return. You said you have high returns from RM and microstock RF. Where do you feel is your money and time invested best?

Then I do have additional questions. Probably you sell your images through Jupiter as well. 
Jupiter opened up  for submitting images to them for SXP users. The current deal is that the photographer receives a commission of 20% for images which should stay 2 years exclusive as Royalty Free with the Jupiter collection. Jupiter then will distribute these images to 200 or so additional agents. Do you think this is a good deal? Is it a good chance we microstock photographers should jump on? It is very hard to get any numbers from anyone or any comparisions.
I would love to get more involved with traditional agencies but good information is very rare. I started to get involved with Alamy and now try to get involved with Jupiter.
Especially interesting would be how does the traditional agencies do compared to the micros on a per image basis. Can you share this information? Thanks a lot!

of course we are all competitors of eachother, and we are also co-workers, in that we can help eacher.  I help you, you help me.. we both win.

Addionally there are forum areas for the different member groups (determined by the amount of posts made, or paid membership) so that more sensitive info, or more strategy type talk can be discussed in private from those who just read the forums but never participate.

the  EXACT reason that attracted me to MSG and the reason it is the ONLY forum I participate in ...or even read for that matter.  =tom