How I Showed A 16-Year-Old To Turn $500 Into $520,367

I want to get into stocks

Investment Seminars / June 25, 2015

The photographer has spent a fair amount of time creating this image both in shooting the elements and model, and compositing in post production. But as a stock image - what does it say? How will the end user use the image for their messaging? License cost was 3 credits or about .58; photographer will receive about 52 cents.A few weeks back there was an opinion piece posted on dPs that raised the ire of many, and garnered supporters from others. The fact remains that while it was an interesting read from a single individual, there were several inaccuracies in that piece.

First, iStock was not the first microstock agency to enter the marketplace; the most widely known perhaps, but it definitely was not the first. That claim to fame can be laid on another Canadian upstart – Corel. While I can’t recall the exact dates, in was around 1993-94 time frame when Corel started to purchase images outright for inclusion in CD bundles and incorporation in Corel Draw and Word Perfect. In those days it was pretty much called clip art. Now it can be argued that Corel wasn’t a microstock agency. I would suggest they were as they purchased images from amateurs and professionals alike. The only difference between them and an iStock, for example, was that Corel purchased the rights and owned the image whereas the microstock agencies today simply work on a royalty basis with the contributor.

The other inaccuracy in the article was the implication that agencies only provide 20% royalty to the photographer. In some cases this may be true; however, there are also agencies that provide 50% royalty to the contributor, and any percentage combination below that which you can think of. Usually, the extreme low percentages are in microstock and traditional agencies marketing RF images. However, in order to compete traditional rights managed agencies are also making package and bundle deals that can see rights managed license fees dramatically reduced to levels even below royalty free image fees.

But let’s not get hung up on the 20% royalty. Yes, the contract most likely states that the photographer will receive 20% royalty from “monies received.” Let’s put that in context. Somewhere else in that contract you are most likely giving the agency the exclusive right to redistribute the image through their other supply networks. What this means is that you will not get 20% of the purchase price, but 20% of your contracted agencies receipts.

Put in context it translates to this: Photographer A makes an image available to his contracted agency – let’s call them Agency X. Agency X then places that image in the redistribution circuit with Agency Y. (Photographer A usually does not know who Agency Y is or what the financial arrangement between Agency X and Agency Y might be.) Agency Y licenses the Royalty Free image to a client for $10.00 USD. Agency Y then remits $5.00 to Agency X (assuming their split if 50%), and agency X then redistributes its 20% obligation amounting to $1.00USD to Photographer A.

So as you can see, if you are signed with a small agency who more than likely is clamouring to get their material with the large image machines that have far reaching marketing clout, you are more than likely only going to receive 10%, or less, of the initial license price.