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Microstock photography, also known as micropayment photography, is a part of the stock photography industry. What defines a company as a microstock photography company is that they source their images almost exclusively via the Internet, do so from a wider range of photographers than the traditional stock agencies (including a willingness to accept images from "amateurs" and hobbyists), and sell their images at a very low rate (anywhere from $.20 — $10) for a royalty-free (RF) image.
A number of microstock sites also sell vector art, and some sell Flash animations and video as well as images.
The pioneer of microstock photography was Bruce Livingstone, who created iStockphoto.com, originally a free stock photo site that quickly became an industry phenomenon. Livingstone sold iStockphoto to Getty Images in February 2006 for $50 million US dollars. Many other sites sprang up in the years after iStockphoto's inception; some of the larger ones are Shutterstock, Dreamstime, Fotolia, 123RF, Vectorstock, Depositphotos, Colourbox, Crestock, Graphicleftovers, Stockfresh, Bigstockphoto, etc
Microstock industry isn't mature yet and continues to change. Starting from limited RF license all agencies added various Extended Licenses; sites based on "pay per download" principle introduced subscription and vice versa Shutterstock which was the only 100% subscription-based microstock agency introduced a pay-per-download scheme and later acquired BigStockPhoto to extend their presence in pay-per-download niche. Newcomer Cutcaster.com extended the pricing model by introducing a model where contributors could set their start price or could choose to use a pricing algorithm and they allowed a buyer to pay the price shown or bid on the content and name their price. Microstock prices were significantly adjusted several times by the respective agencies in the last 3 years across multiple sites. Many microstock agencies started to sell video in addition to static pictures; and some started to sell sound clips.
Practices and controversy
Each microstock agency uses a different pricing and payment scheme. In some instances the same photo can have several prices. Photographers can upload the same pictures on multiple sites or, with some agencies, become an exclusive supplier and receive an increased commission and additional benefits.
There is no fee to post photos on a microstock agency website. However, microstock agencies do not accept all submitters or all photographs. Each employs a team of reviewers who check every picture submitted for legal issues and technical quality, as well as artistic and commercial merit. Photographers add keywords that help potential buyers filter and find pictures of interest.
The mindset of microstock supporters is that quality will prevail and some photographers believe that they will end up earning as much income from many small sales as they would from a few large sales on a traditional stock photography site. Others participate simply as a hobby or for a side income. Although not many microstock photographers post their income levels online, those individual small sales multiplied by volume can add up to thousands of dollars.
Images are filed at an agency that negotiates licensing fees on the photographer's behalf in exchange for a percentage, or in some cases owns the images outright. Pricing is determined by size of audience or readership, how long the image is to be used, country or region where the images will be used and whether royalties are due to the image creator or owner. Often, an image can be licensed for less than $200, or in the case of the microstock photography websites as little as $1 for a low resolution license.
With Rights Managed stock photography an individual licensing agreement is negotiated for each use. Royalty-free stock photography offers a photo buyer the ability to use an image in an unlimited number of ways for a single license fee. The client may, however, request "exclusive" rights, preventing other customers from using the same image for a specified length of time or in the same industry. Such sales can command many thousands of dollars, both because they tend to be high-exposure and because the agency is gambling that the image would not have made more money had it remained in circulation. However, with royalty free licensing there is no option for getting exclusive usage rights.
Some stock photography sites offer low-resolution photography free for the purpose of preparing advertising comps to demonstrate a design. If the advertiser decides to use the image, the rights to use the high-resolution image then can be negotiated or purchased directly from the website.
Professional stock photographers place their images with one or more stock agencies on a contractual basis, with a defined commission basis and for a specified contract term. Some photographers fund their own photo shoots, or develop imagery in cooperation with an agency, while others submit photographs originally produced as part of editorial (magazine) or commercial assignments.
"Free" in this context means "free of royalties (paying each time you use an image)". It does not mean the image is free to use without purchasing a license or that the image is in the public domain.
• Pay a one-time fee to use the image multiple times for multiple purposes (with limits).
• No time limit on when the buyer can use an image.
• No one can have exclusive rights of a Royalty-free image (the photographer can sell the image as many times as he or she wants).
A Royalty-free image usually has a limit to how many times the buyer can reproduce it. For example, a license might allow the buyer to print 500,000 brochures with the purchased image. The amount of copies made is called the print run. The buyer is required to pay a fee per brochure, usually 1 to 3 cents, for additional prints. Magazines with a large print run cannot use a standard Royalty-free license and therefore they either purchase images with a Rights-managed license or have in-house photographers.
Rights-managed (RM) (sometimes called "licensed images")
The value of a license is determined by the use of the image, which is generally broken down along these lines;
• Usage: (e.g. Advertising — "Above the Line", Corporate — "Below the Line" or Editorial — "News Media")
• Specific Use: (e.g. Billboard, Annual Report, Newspaper article)
• Duration: (e.g. 1 month, 2 months, 1 Year, 2 Years etc.)
• Print Run: (e.g. up to 10,000, up to 1m)
• Territory: (e.g.; USA, Europe, UK, Germany, or whatever combination of territories are required)
• Size: (how big is the image to be used — 1/4 page, 1/2 page, full page, or double page spread)
• Industry: (Industry type — e.g. Consumer Electronics, Marine Engineering, Financial Services etc.)
• Exclusivity: (Exclusive, or Non Exclusive)
The terms of the license are clearly defined and negotiated so that the purchaser receives maximum value, and is protected in their purchase by a certain level of exclusivity.
Rights-managed licenses provide assurance that an image will not be used by someone else in a conflicting manner. The agreement can include exclusivity, and usually recognises that this represents added value. Not all Rights-managed licenses are exclusive, that must be stipulated in the agreement.
A Rights-managed image usually allows a much larger print run per image than a Royalty-free license.
Editorial is a form of rights-managed license when there are no releases for the subjects. Since there are no releases the images cannot be used for advertising or to depict controversial subjects, only for news or educational purposes.
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