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Author Topic: iofoto: year 1 report- updated  (Read 28393 times)

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iofoto

  • iofoto.com
« on: February 09, 2008, 11:20 »
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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
« Last Edit: February 09, 2008, 12:20 by iofoto »


« Reply #1 on: February 09, 2008, 11:37 »
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Thanks, iofoto .   Super post!!!

« Reply #2 on: February 09, 2008, 11:52 »
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Great post. If you have any other graphics that show the trends at specific sites that would also be very interesting.

« Reply #3 on: February 09, 2008, 12:00 »
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yeah, it is very surprising and appreciated how everyone here helps one another.

In one sense we are competitors, however in another sense we are co-workers. 

Having a place to discuss 'work' is important to me, so I am glad you all are here... very appreciated.

So yeah, thanks for the info Ron.

« Reply #4 on: February 09, 2008, 12:32 »
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Very interesting information, Ron. Thanks for sharing.

« Reply #5 on: February 09, 2008, 12:40 »
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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.

Thanks Ron!
Could you tell us please how to get this important ratio? I have no idea how to check which photos have sold during last year and which have not.
Thanks!

« Reply #6 on: February 09, 2008, 12:42 »
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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.

Thanks Ron!
Could you tell us please how to get this important ratio? I have no idea how to check which photos have sold during last year and which have not.
Thanks!

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.

« Reply #7 on: February 09, 2008, 12:50 »
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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.

Thanks Leaf. The problem is (in my case) that I contribute with all the agencies longer then 1 year.  When I open my portfolio on Dreamstime I can only see whole the sales, since April 2005.

iofoto

  • iofoto.com
« Reply #8 on: February 09, 2008, 12:56 »
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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!



« Reply #9 on: February 09, 2008, 13:02 »
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iofoto:

Your graph doesn't list BigStockPhoto.  Did you just forget to include it, or do you not contribute?  If you don't contribute, any reason why not?

iofoto

  • iofoto.com
« Reply #10 on: February 09, 2008, 13:11 »
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Quote
Your graph doesn't list BigStockPhoto.

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

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #11 on: February 09, 2008, 21:04 »
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Ron - great insight, thanks for sharing it. I would be curious to know what percentage each row in the earnings represents so I could understand if the Jan - Jan revenue trend increase is 25%, 100%, 200% etc.

« Reply #12 on: February 09, 2008, 23:32 »
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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
« Last Edit: February 10, 2008, 00:25 by mwp1969 »

« Reply #13 on: February 09, 2008, 23:57 »
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I am really glad MSG has created an open forum where people do not treat others as the competition but rather as a common community or a guild.

You do realize others are the competition, right?

« Reply #14 on: February 10, 2008, 00:00 »
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The chart above is our monthly revenue. There's no numbers, just trends.
....
The sharing is really important. Thanks to everyone on this forum!

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?
« Last Edit: February 10, 2008, 00:03 by sjlocke »

iofoto

  • iofoto.com
« Reply #15 on: February 10, 2008, 02:24 »
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Quote
Could you share the numbers?
No.

Quote
BTW, I heard you laid off most of your staff in December.  Is that true?

Yes, I unfortunately had to make changes to our workflow 2 months ago in response to diminishing returns on our contract work. We now outsource all our digital imaging to the same great people on a freelance basis. Business sometimes requires tough decisions that aren't fun for anyone. I'm really proud of everyone, and let me know if anyone needs freelance work- I'll pass along the names of some awesome folks!

« Reply #16 on: February 10, 2008, 02:41 »
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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.



grp_photo

« Reply #17 on: February 10, 2008, 04:30 »
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Well Hatman, he was talking about strong growth in the low-end and the very high-end.


« Reply #18 on: February 10, 2008, 05:23 »
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Yes, I unfortunately had to make changes to our workflow 2 months ago in response to diminishing returns on our contract work. We now outsource all our digital imaging to the same great people on a freelance basis. Business sometimes requires tough decisions that aren't fun for anyone. I'm really proud of everyone, and let me know if anyone needs freelance work- I'll pass along the names of some awesome folks!

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?

iofoto

  • iofoto.com
« Reply #19 on: February 10, 2008, 10:20 »
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Quote
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?

Like every photographer, every client has a unique design sensibility. Mix that design outlook with the designer's client who again has specific likes/dislikes, and then add a matrix of demographics, ethnicity or perhaps the color theme of the design project. All of a sudden, there's a huge need for a diversity of work.

My advice, and what we do, is to take any keyword and add your own unique interpretation. Something as simple as the choice of background or wardrobe color will make the shot stand-out from the rest. Shoot with a different type of light. Do not copy what already exists- you only hurt yourself by creating more of the same!

Another thought is to regionalize your images. For example, while generic is good in some cases, trying shooting business on the street where the "sense" of location is part of the image.

Stock is about a lifestyle of creativity, loving photography, and doing your best to make a successful business. 

« Reply #20 on: February 10, 2008, 10:28 »
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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 StockXpert 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!
« Last Edit: February 10, 2008, 10:54 by Freezingpictures »

iofoto

  • iofoto.com
« Reply #21 on: February 10, 2008, 12:00 »
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Quote
You said you have high returns from RM and microstock RF. Where do you feel is your money and time invested best?

Both, but because RM would be a new market for you, set a budget of time and resources to test the waters.  And traditional RF is not going away anytime soon! I tested microstock for almost a year before making a commitment to invest any significant resources.

Quote
Jupiter opened up  for submitting images to them for StockXpert 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? I would love to get more involved with traditional agencies but good information is very rare.  Can you share this information?

I can't share any financial/contractual info because of confidentiality clauses in my contracts. In broad terms, 20% is not too bad. (iStock only pays 20% on microstock prices...) If you were to distribute through a third party company that aggregates photographers, your "percent of a percent" could be less than the 20% being offered by Jupiter.

There's a number of excellent choices out there- Corbis, Jupiter, Getty, Masterfile, Alamy, Photolibrary, Mediamagnet, along with hundreds of more regional opportunities. Research each one and determine the best fit for your work.

And again, invest only what you feel comfortable. Last year was the most tumultuous year the stock industry has experienced that I have seen in the 25 years of shooting stock.  Those changes will continue for the next several years. Change creates opportunity.

The single easiest way to get the attention of an editor is to have perfectly executed unique imagery. Make sure your work stands out from the crowd!

« Reply #22 on: February 10, 2008, 12:06 »
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I am really glad MSG has created an open forum where people do not treat others as the competition but rather as a common community or a guild.

You do realize others are the competition, right?

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.


« Reply #23 on: February 10, 2008, 12:18 »
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Thanks for the info Ron. I will follow your advice!

« Reply #24 on: February 10, 2008, 13:06 »
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of course we are all competitors of each other, and we are also co-workers, in that we can help each other.  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.  8)=tom


 

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