Pro-Imaging

Assessing Profit Potential

So, can shooting Royalty Free be profitable?

The answer is clearly yes, as the small group of high-volume production-oriented stock photographers who have become RF “superstars” can attest. However, it must be recognized that they were in an ideal position to profit from RF by leveraging both their produc- tion experience and financial success from highly successful RM careers to heavily invest into RF.

The top RF producing photographers have full time staffs, long histories of production - intensive stock shooting and huge image archives. Yet, the only pertinent issue is whether their success provides a road map that is relevant to individual photographers trying to break into the stock business today.

SAA has spoken with a number of stock photographers who have done some RF shoots or moved existing images into RF collections. Some have generated significant ongoing incomes from RF; others have made very modest returns. While a number of photographers have “dabbled” in RF, it has become a profitable business model for relatively few. The reason is the RF profit equation. Since RF profits come from the VOLUME of licensing, RF companies profit from their huge share of the revenues (90 percent) that compensate for the low price point. For the photographers, that volume also has to make up for the minimal share of revenues that they receive.

Consider a comparison between two single images, one RM and one RF. Looking at single image pricing only, we would conservatively estimate that the average RF license fee is well under $200, whereas the average RM license fee exceeds $500. Assuming an RF royalty of 10 percent and RM royalty of 40 percent, the RF image would need to be licensed TEN TIMES more often than the RM image for the photographer to net the same amount ($200 in this case).

A top Rights Managed shooter, in considering the RF proposition, offered these comments when asked if Royalty Free can be profitable for photographers today:

“Costs must be tightly controlled and a shooting script must be strictly adhered to. Only photogra- phers who are used to high levels of productivity will be able to make an RF shoot day worthwhile. Photographers who are employed directly by RF generators, or who are powerful enough to drive a better deal for their services, can make a reasonable amount. This is especially true if the expenses are paid by the company. Photographers who do occasional projects for large companies at their own expense will invariably find sales do not meet expenses.”

While some have found a way to make a profitable business out of shooting Royalty Free, many others have not fared well. In the stock business today, there is no “easy money” equation, and with the rock-bottom royalties and production intensive approach, this is particularly true with Royalty Free. Yet, it is hard for photographers to make a balanced assessment of the RF profit equation when there’s no information available to them beyond the anecdotes of the success stories.