But this agency is weird.  Very weird!  Here’s why:

They launched into a bloodbath of controversy due to association with a file-sharing network. They copied the best strategies of various top microstock agencies adding almost nothing new. And a policy of strict anonymity for staff and owners compounded suspicion and fed conspiracy theories.

Yet the company has been very successful. The strategies they copied were well chosen. And they spent a lot of money in all the right places. They’ve just passed 5 million files exactly two years after launch. And many serious microstockers report that Depositphotos is among their top 5 – 7 earning agencies.

Let’s take a closer look at this weird but successful microstock agency and see if we can help you make your decision about contributing to Depositphotos.

What’s [NOT] Different about Depositphotos?

There’s not much in the Depositphotos business model that we haven’t already seen in the industry.  Here’s some of the winning strategies that Depositphotos chose:

• Smart search – most new microstock agencies lack variety and sort options when they launch but Depositphotos gave buyers great search results from day 1
• API – realizing just how many sales come via partnerships and system integrations, Depositphotos also had a functional API from day 1
• Lucrative affiliate program – new agencies can’t trade on a reputation for generating sales, so affiliate programs must make up for it which the Depositphotos program does, though a little weird (see below)
• Contributor incentives – boosting submissions with paid uploads got Depositphotos to a record-breaking 5 million files in just two years
• Taking submissions by hard drive – accepting bulk submissions with a release spreadsheets lowers the barrier for big contributors to participate
• Split site – contributors get separate accounts at a separate and familiar sub-domain: submit.depositphotos.com

This lack of originality doesn’t just apply to strategy. Site layout, logo design and terminology are all familiar to anyone in the industry. Even model release structure and wording are plainly derived from another well-known microstock agency.

But copying has its advantages. Their strategy was already proven so they launched with lots of confidence.  And they backed it up with great programming and well targeted marketing. At launch, Depositphotos looked and felt more like the top agencies than a startup.

So what is actually different?

• Payment by SMS – buyers in certain countries can pay for photos through their mobile phone bill, replacing credits with SMS messages. This is an original innovation.
• Free Trial Subscription – buyers get a 7-day subscription for 5 photos per day free of charge, yet contributors still get paid for the sales.
• Credits actually cost $1 – most other agencies have complicated the pricing and pushed them up over time. However, at Depositphotos, 1 credit actually costs $1, and 50 credits costs $50. Discounts are available above 100 credits.
• Exclusivity is full ‘photography’ exclusivity, not just for Royalty Free licenses or image exclusivity. I’m not sure what the strategy behind that is, but Depositphotos isn’t pushing exclusivity at all.

Details

Depositphotos Background

Depositphotos was launched by Dmitry Sergiev, the current CEO, who previously worked with a file sharing site, Depositfiles.com. When Depositphotos launched, forum chat alleged it was possible to download pirated collections of stock photos from Depositfiles.com. Apparently Dmitry left Depositfiles before starting Depositphotos, and that was the extent of the association. Nevertheless, together with the connected names, it has been a constant public relations battle for the company ever since.

It was plainly evident that Depositphotos was launched with massive financial backing. And they used it effectively, building their portfolio with cash incentives, marketing extensively within the industry, and building a solid and functional system.  They also took additional funding recently in the form of $3 million from Jersey-based TMT Investments.

The company now has operational centers in three different continents: Accounting and official headquarters in Fort Lauderdale; programming in Moscow; and, review, sales & marketing teams in London.  And yes, headquarters in the US means we must submit the all-too-familiar tax forms.

Anonymity

Microstock agencies need contributors to trust them with their portfolios and buyers to trust them with their credit card details. Anonymity doesn’t inspire a whole lot of trust, but that apparently didn’t occur to Depositphotos until recently. They’ve been working on their anonymity issues since early after launch, but still haven’t figured it out:

• No staff are ever named on the website
• Email comes from anonymous addresses (service@, support@, marketing@, etc)
• No staff existed on LinkedIn (until recently, see below)
• Even their domain registration details are hidden.

However, we are finally starting to see the Depositphotos staff come out to play:

• Marius Klatt, Sales Manager operating from London, who we met at Microstock Expo
• Olga Kravchenko, currently manager of the partner program, was also at Microstock Expo
• Dmitry Sergiev, Founder and CEO, now finally on LinkedIn
• Elena Flanagan-Eister, head of US Sales & Marketing, attended Visual Connections NY
• Igor Kaliuzhnyi, head of Eastern & Western Europe, quoted in all press releases
• Vadim Nekhai, Marketing Manager
• Jamie Joyce, Marketing & Advertising Manager
• Shawn Rize, SEO Specialist
• Igor Shoifot, Advisor (via TMT Investments), also attended Visual Connections

Split Personality Social Media

It’s taken some time for Depositphotos to get their social media strategy on track, and it’s still not without major issues.

They initially registered their social media presence as a person rather than a company, becoming a Friend on Facebook and a Contact on LinkedIn.

Fortunately someone has woken up to how creepy this is and established a Facebook Page instead, which actually has smart and interesting content behind it.

Yet just when we though they’d figured it out, they start posting contributors’ images at high resolution and without watermark on their Facebook Page.

Contributor Incentives

Depositphotos is currently paying 10 cents per accepted file for the first 500 of new contributors, making a maximum possible upload incentive of $50. Previously the amount was 20 cents making the maximum $100.

But what’s even more appealing is the assistance given to qualifying contributors through their Special Program for Large Contributors. Not only will they negotiate terms, they’ll take your portfolio by hard drive and categorize, attach releases and submit it for you.

Referral Program

While appearing generous on the surface, the Depositphotos referral program reveals more of the weirdness of this agency

• Payment for referring contributors is great, but it only pays for subscription sales, not credit-based sales. Weird, right?
• 15% buyer referrals sounds great, but it’s calculated after subtracting the contributor royalty!
• It doesn’t specify that referrals are paid for the life the referred account, but it doesn’t specify an expiry limit either
• The cookie duration is a mere 3 days while most other microstock agencies set theirs for 30 days

The Verdict

Depositphotos seems to have proven itself trustworthy over the past two years, operating without any major scandals. And that the staff are coming out and attending events provides more comfort.

Their ability to generate sales is also well proven based on public comment from established microstockers.

With a solid submission process and an open invitation for serious contributors to submit in bulk, there’s also little risk of not getting a return on the effort of uploading.

Add all that together and it seems like it’s now both a profitable and safe decision to contribute to Depositphotos.  You can register here.

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

As the pioneer of the microstock subscription model, Shutterstock still dominates that part of the market, selling more photos than any other microstock agency and earning their place among most microstockers’ top earning agencies.

The nature of the search function means photos sell well when they’re new.  Those that sell particularly well in the early weeks maintain high search positions and continue selling well. Those that don’t fare so well quickly fall to the back of the search results where they generate fewer and fewer sales.

New uploads also boost sales of your entire portfolio, encouraging contributors to upload consistently and creating the situation known in microstock as ‘feeding the beast’.

Shutterstock was the second microstock agency I joined and is consistently the second highest earning agency for me, behind iStockphoto. For many other microstockers, it’s their most lucrative agency.

Shutterstock Background

Shutterstock launched in 2003 but according to Alexa stats didn’t start getting popular until 2005.

Founder, Jon Oringer, in a story very similar to the founding of iStockphoto, launched the site by offering his own photos for sale.  The genius strategy he used to differentiate himself from iStockphoto – already well established in the market by that time – was to combine the crowdsourced microstock business model with the subscription payment method that was available at many non-microstock (traditional) stock photo agencies.

Being the only microstock subscription agency for many years helped propel Shutterstock into the top tier of microstock agencies where it remains a strong performer today.

The company has always maintained a graceful simplicity, outright rejecting exclusivity opportunities, avoiding personalization functionality (member profiles, ratings, etc), and maintaining straight-forward subscription plans.

Shutterstock Details

The Subscription Business Model

From the contributor perspective, the defining factor about Shutterstock is that it highly favors new images. The resulting strategy of contributors is to then continue producing and uploading. This works well for Shutterstock and has resulted in their building the largest collection of content among all microstock agencies.

This strategy also works well for buyers. With the subscription model buyers have already downloaded more of the images they’ll need from the existing portfolio, so they can then concentrate on the fresh images coming through. However, the subscription contract does limit ‘stockpiling’ by prohibiting use of images the buyer hasn’t already used six months after downloading them.

Almost all microstock agencies now offer subscriptions, but none can match the sheer volume of downloads that Shutterstock achieves. An important factor in Shutterstock’s continued subscription dominance – and one that’s not so contributor friendly – is that subscribers can download images at the highest resolution without paying any more. Other microstock subscriptions put limits here to protect the income of both the agency and contributor, but to the disadvantage of the buyer.

Cool Features

• Ultra-convenient stats – Shutterstock provide all sales (photos and footage) and referral earnings on a single convenient page with a row for each day of the month (also see updated keywords tool and lightbox stats)
• Move the Watermark – when the subject of your image is on one site of the frame you can move the watermark position so it better protects the image
• Lucrative referral program – Shutterstock’s referral program performs extremely well when referring contributors and has full data reporting.

Earning Performance

Many contributors cite Shutterstock as their highest earning agency. Others are quick to point out that the per-sale / per-download earnings are very low.  Regardless of how you look at it, Shutterstock is the most consistent earning agency in microstock.

Earnings really kick in after you pass the various pay-rise milestones of earnings, where your per-download royalty rises from 25 cents, to 33 cents with $500 in earnings, to 36 cents with $3000 in earnings, up to 38 cents with $10,000 in earnings. (earnings are calculated on all income, including referrals)

Verdict

Whether or not to contribute to Shutterstock is perhaps the easiest decision for microstock contributors to make.  Shutterstock is a consistent performer with high earnings, particularly for consistent producers.  Their system is straight-forward and the team are smart, friendly, and considerate of the plight of contributors.

What to do Next?

If you want to sell photos at Shutterstock, the first step is to register and then submit your application. I have advice on passing the acceptance test and more general advice on getting started. If you have any questions or problems just shoot me a message through my contact page and I’ll do my best to help you.

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

Check out this taster video: (It’s better with the volume up loud!)

Turns out preparing the videos takes almost as much time and effort as the conference itself, which is why it took us so long. There’s 10 hours of finished footage which Amos cut from two HD cameras and multiple audio sources of the mics and presentations.

Finding a suitable place to securely host and serve that amount of footage isn’t straight forward either – the team at Clipsan have been super helpful setting it all up for us. Thanks also to Timelapse Berlin for the awesome timelapses.

You can access all the videos for €99 or individual sessions for €20. Attendees have all been sent discount codes.

Once paid you can watch them as many times as you like.

That link again: videos.microstockexpo.com

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

In the short time the latest Envato marketplace has been online, we’ve seen a lot of positive signs:

• The collection size at PhotoDune is growing quickly, already above 400,000.
• Top contributors have been publicly saying great things about the early sales at PhotoDune, including Andres Rodriguez, Pressmaster and CandyBox Images.
• The public sales stats of top contributors on PhotoDune is demonstrating impressive sales performance for such a young microstock agency.
• And perhaps best of all, the CEO of the company, Collis Ta’eed, has been spending a lot of time communicating directly with microstock contributors both on PhotoDune’s own forum and Tyler’s MSG forum.

So let’s take a closer look at PhotoDune.

What’s Different About PhotoDune?

There’s no shortage of things that set PhotoDune apart from a regular microstock startup, and also distinguish it from the established agencies.

The primary difference is the background of the company, having successfully grown eight other digital asset marketplaces over the past five years. This experience not only gives Envato a head start with the technology experience, but brings a large existing customer base right in to PhotoDune.  Envato membership passed 1 million members in September, most of whom are buyers with registered payment details.

The team has also used some original ideas to differentiate the agency from established microstock agencies.  First, the previews are huge!  They’re heavily watermarked to make them un-usable, but buyers get a very detailed view of the image before making their buying decision. Second, extended licenses are priced based on the size purchased.  This original idea is based on direct buyer feedback and helps open up the market for extended usage while still generating higher prices for uses that require bigger files.

PhotoDune Details

Pros and Cons

PhotoDune has great sales volume for a such a new entry.  Leveraging their existing buyer base and technical competence has given them a huge advantage which they’ve successfully converted into consistent and growing sales volume.

Submission is not the best, but far from the worst and the Envato team are making constant improvements. Uploading your existing portfolio requires the usual laborious submission work, similar to most mid-tier agencies.

A low commission rate was a mark against PhotoDune at 25%, but now that it’s 33%, it’s much easier to swallow.

Prices are not the highest at PhotoDune. We contributors tend to prefer new agencies that don’t undercut existing ones, as much as we realize that makes it difficult for the new agencies. The largest size at PhotoDune is only $9, which is much lower than at the top microstock agencies, but not as low as many new entrants.

Some contributors have taken issue with the low price of extended licenses when sold at smaller sizes, but given the limited things people can do with such small sizes, we’re not actually giving away as much as some make it out to be.  It’s at least a positive thing that Envato have listened to their buyers and made the original move of pricing extended licenses by size.

The Verdict

It’s pretty easy to upload to PhotoDune and sales are better than at any new startup microstock agency since, well, they’re probably more lucrative than any other microstock agency was after just six months.

Their reputation for listening to contributors is also second-to-none, so while making the difficult “balance between agency sustainability, buyers needs and contributor needs”, they seem to be keeping everyone happy so far.

So it’s a pretty easy decision for most serious microstock contributors. PhotoDune will clearly be a worthwhile addition to your distribution workflow.

You can sign up with PhotoDune here.

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

Lee Torrens and Amos Struck opening the Microstock Expo 2011 Conference

The program was extremely well received and the speakers did a fantastic job sharing their expertise.  Feedback from the event overall has been overwhelmingly positive, confirming our decision to make Microstock Expo an annual event!

It’s an Honor

For me personally, the biggest success that came out of Microstock Expo was the response from the industry.

Sponsorship sold out in under two weeks.

Speakers were enthusiastic and we had no trouble filling the program with top experts on each topic.

We also had 12 great exhibitors fill the large expo room.

And of course ticket sales were solid from the day we announced the event right through to some walk-ins on the opening day.

The fact that such an enthusiastic response was generated for an event with no history, and created by two first-time event producers, was a true honor for me. Thankyou to everyone for your confidence in us.

Conference attendees make their way back into Microstock Expo

Thankyou!

Those who attended the event are likely already tired of hearing me say this, but thankyou to everyone who was involved and supported us.

Thanks to all the sponsors for their financial support without which the event could not have taken place. They all came on board very early, taking a leap of faith that the event would deliver value on their money.

Thanks to all the speakers for giving us the content that made it so easy to sell tickets. Lending us your name to promote the event, traveling to Berlin, and then delivering such well-prepared presentations ensured attendees got great value for their money.

Speakers of the Microstock Lifestyle session at Microstock Expo

Thanks to the exhibitors who enthusiastically shared their products and services with the audience and provided so many cool give-aways.

Demonstration of the Pixolution search technology at Microstock Expo

Thanks to all the attendees who came and participated so enthusiastically in the event.  It was great to have so many people from different parts of the industry and different parts of the world there to share viewpoints.

Robert Kneschke speaking during the audience discussion at Microstock Expo

Thanks to Vita Valka for the amazing design of the brand, the program and all the attractive visuals for the event.

Thanks to Mark Milstein for sending us Adam Berry who shot such wonderful photos of the entire event.

Thanks also to the great staff at the hotel and the amazing Audio-Visual team who made the event so slick and professional.

Thanks to Ellen Struck who took so much of the logistics off our hands with the badges, showbags and registration, and Julia Struck for additional registration support.

Ellen Struck counting down the PitchFest time limit

Thanks to Luis Alvarez for organizing the iStockphoto Fashion Shoot Workshop which was very popular with the participants who got some great stock shots out of it.

Stock photo produced at the iStockphoto Fashion Workshop at Microstock Expo (Copyright Andresr)

Thanks to Willie Thomas for his hospitality, organizing an impromptu stock shoot and the awesome moving-camera time-lapse videos of the conference (coming soon).

Most of all, a personal thankyou from me to Amos Struck, my business partner on the event and close personal friend, for being passionate enough about the event to make it happen, and organized enough to have it ready with just five months preparation!

Photos and Videos

We’re putting most of the official photos from the event on the Facebook page and there’s some more on Twitter too.

We have 16 hours of HD video footage of the event which we’ll make available for online purchase as soon as we finish cutting it and get it uploaded. This is no small task!

Group shot of some of the speakers of Microstock Expo 2011

Press Coverage & Feedback

There’s already a lot of press coverage about the event.  Here’s some that we’ve spotted so far:

• Our own post at Microstock Expo
• Microstock Group Live thread
• Giorgio Fochesato, here and here and here (translate button at the top)
• Robert Kneschke: What I learned at Microstock Expo
• CEPIC: First Microstock Expo in Berlin was a success
• Pictorial Online

The feedback we’re receiving from attendees is surprisingly consistent. Lots of enthusiastic feedback praising the program & speakers, the professionalism of the production, and the great hotel. Most of all, many people are using the word “fun” which is something we worked hard to embed in all aspects of the event.

Audience watching the action at Microstock Expo 2011

Check out some of the comments we pulled from Facebook and Twitter on the Microstock Expo post-event blog post.

Thanks to all the attendees who’ve provided feedback so far. Please keep it coming.

Microstock Expo 2012

The decision to repeat the event was made around the time the sponsorship sold out.  At that time we knew there was interest and everything that followed confirmed that.

There’s still some big decisions to make about 2012, such as where in the world to do it, what time of year, and weekend or during the week.  But we’ve already decided to include tracks for photo, video and illustration, with more hands-on workshops and longer portfolio review sessions.

If you’re not already subscribed to the Microstock Expo mailing list, be sure to do so to get the updates on the video and hear the announcements for the next event.

Thanks again to everyone involved and I look forward to welcoming you again to #MEXPO 2012!

Lee Torrens and Amos Struck at the conclusion of Microstock Expo 2011

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

The tool has two purposes:

One: Earnings by Lightbox

By grouping individual files into lightboxes you can see the combined earnings of all the files together, just like at Dreamstime.  This is useful for analyzing our own portfolios by any different metric.  Unfortunately that’s it.  The tool stops short of providing more useful measures such as how long the files have been online or downloads per day – critical factors if we are to really understand how our photos are performing.

Two: Promote your Lightboxes

The lightboxes, or “Catalogs” can be promoted via a link which automatically integrates your affiliate code, much like the Twitter and Facebook integrations that Shutterstock pioneered. Promoting catalogs in this way is the same as the My.Fotolia service launched in 2007 and shut down last year due to lack of participation and traffic.

Where Are They Going with This?

The announcement, full of spin at a level usually reserved for customers, touts this feature as unique. That may have been true for the promotion part as Fotolia shut down their version last year, but it’s really no different to creating a lightbox at any other agency and adding your affiliate code to the link. And it’s not true for the earnings-by-lightbox part as Dreamstime have had that functionality for years.

Most of the new functionality benefits Shutterstock much more than it benefits contributors. Personally I can understand that – we’re all here to maximize our own profits – but I object to it being marketed to me as the “most requested” function along with near-deceptive claims about their affiliate program.  There’s a very long list of contributor functionality higher on the priority list than this, and affiliate programs with ongoing referral payments are many times more lucrative than Shutterstock’s one-time payout.

The video also highlights the nice drag and drop functionality. If used on the release matching page, that technology would save contributors considerable submission costs.

So while this new update is very welcome, it’s not unique, and actually quite overdue.  It’s a big disappointment after the original and useful Keyword Trends Tool launched in July.

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

Pavel Orekhov opened the conference with an enthusiastic address, introducing the conference and the international speakers, and expressing his delight at how Russia was increasing its participation in the international stock photography market. As a gift to attendees, he provided a promotion code for Pressfoto contributors to receive 100% royalties from now until the end of the year.

The first presentation was by intellectual property expert Natalia Gulyaeva from Hogan Lovells (CIS). There were many interesting points, though please keep in mind these are specific for the Russian Federation and came through a real-time translation so I may not have got them perfectly accurate.

• Some people say that IP protection in Russia is impossible, but my experience is different.
• Compensations is rising. Over €12million were awarded to rights holders by Russian courts in 2010.
• Photographers or copyright owners must keep all original contracts or notarised copyies
• They must also produce the receipt for the camera used to shoot the photo.
• All original RAW and JPEG files must be stored where they cannot be accessed by unauthorised people.
• Always use a copyright symbol, but it doesn’t mean that it’s not protected by copyright if it’s not there.
• Record the infringement – if it’s online you can view the offending material in the presence of a notary public.
• Other photos taken in the same shoot are excellent proof that the photo is yours.
• You must prove that photos are artistic and not just any amateur snapshot – this is done with experts testimony.

Manager of Nikon Professional Services, Valery Akekseev, provided a very interesting background on how the Nikon legend was born. This was followed by a surprisingly entertaining description of the service and how it works in Russia, complete with stories of why Nikon has developed the features it has and the benefits of registering your Nikon equipment online.

Dittmar Frohman

iStockphoto‘s Dittmar Frohman presented on the Past, Present and Future of microstock. Despite explaining how he couldn’t provide any numbers, a few interesting ones were mentioned. Most interestingly were the weekly royalty payout amount now up to $1.9million, and that only 2,000 of iStockphoto’s 100,000 contributors were Russian.

He skillfully dodged tongue-in-cheek questions about how the search algorithm works, and took head on a question about whether beginners could still get started at iStockphoto. He also hinted that receiving payments in the Russian Federation will become easier in the future in response to a question about the topic.

Robert Davies

Robert Davies of picNiche / picWorkflow gave an analyst’s view of microstock full of insightful charts and advice on how contributors could earn more money in microstock. He demonstrated how the long tail pattern and 80/20 rule applied everywhere in microstock. He also suggested that earning more is more about ‘selling’ than producing more photos, through analysis, targeted production, marketing yourself with methods such as blogging, talking to buyers, and creating a Creative Commons collection to drive traffic from Flickr to your portfolio on the most lucrative agencies.  He was also enthusiastic about the opportunities for microstock photographers with video footage.

His charts showing how the picNiche rating for important search terms had risen consistently until around 2009 after which they almost all started declining. He explained that this is caused by increases in supply – essentially proving that the microstock market matured in 2009. Interestingly the trends for Music and other arts, energy, gay topics, negative emotions, are all still rising, presenting opportunities for microstock contributors.

His presentation is online here or verbally annotated on YouTube here.

Andres Rodriguez

After lunch Andres Rodriguez took the stage to present the story of his 7 years in microstock.  After describing his background and how he got started in microstock, he provided a detailed look of the current industry.  He said that it’s unfortunate that the industry seems to be all about volume these days, comparing it to when he got started – a time with iStockphoto had only 100,000 images and BigStock had only 10,000. Now it’s saturated, he says.

Standards are also rising.  You need to have technically perfect images to pass review in microstock.  Although in the traditional industry, he says, they’ll tolerate technical mistakes if the image is good.

Moving into tips for microstock photographers, he stated that models don’t need to be expensive.  People enjoy being photographed and seeing their photos in use, so they’re happy to work for copies of the photos if you approach them in the right way.  They’re also more natural.  Similarly, he hardly ever pays for locations because a few hundred dollars rarely makes a difference to a business, but getting free images of their business is usually very appealing.

Advising beginners, Andres explained that if he was starting again he would focus on just the top agencies.  He pays the person who uploads and submits his images 20 cents per image per agency.  If an agency returns less than 20 cents extra for each new image he adds, he stops uploading.  He encouraged contributors to use Microstock Charts to track your RPI.

Andres sees future opportunities in video, particularly making both video and still images in the same shoot.  He also sees more collections at different price points being a bigger part of the future than they are now.

Andres’s presentation can be downloaded here in Keynote format (4.4MB).

Irina Terentieva

Following Andres was Irina Terentieva from Russian microstock agency Lori.ru.  She gave an interesting insight into the microstock business in Russia from the agency perspective, tailed for the audience of microstock contributors.  She included tips on what to shoot, how to shoot it – things like always shooting people doing an action, or when shooting objects, shoot them with a person doing an action.

Dmitriy Karpov

Dmitriy Karpov, Chairman of the British Higher School of Art & Design ended the day with a fascinating insight into image technology, business, art and sociology. He explored and demonstrate the current trend of intentionally incorporating glitches, distortions and artifacts into images.  Citing the rise in fashion of old, cheap cameras and the my-camera-is-worse-than-yours trend (the sort replicated by many an iPhone app), he provided examples of such images in use by big publications and top brands, including Coca Cola.

He also demonstrated some amazing photo compositions and new art, explaining how art is replacing old technical flaws, and even new ones. As an example he showed a painting of images influenced by distorted digital satellite signals.

Day 2

The second day kicked off with a 4-hour stock shoot workshop from Andres Rodriguez.  Andres took us from end to end, starting with planning the shoot, preparing the models, props and sets, through shooting all the way through to retouching and preparing the files for submission.

After an introduction, Andres started with the shoot planning while the models were having their makeup done. He started with a mind-map for the shoot, looking at what models he had and what types of shots he could build from that.  He also listed props, and started creating groups of shots based on combining models with props, all the time explaining why he was choosing certain shots – based on how they sell in microstock – and helpful things to keep in mind when planning.

During the shooting portion of the workshop Andres explained how he worked with the models, why he used the camera settings he used, and how placement of props and styling impact how a stock photo will sell.

Between shooting the models, Andres swaps cards so his sister / model / assistant, Adriana, can show the photos on the screen.  Andres jumps in to explain how and why he crops, color-corrects and adjusts the images to make them more usable for designers.

Simon Krzic’s Microstock Video Workshop

Top microstock video contributor, Simon Krzic, gave an extremely detailed workshop explaining everything a microstock contributor needs to do to succeed with video.

Flipping between presentation slides and example videos, he ran through all parts of his stock video production business.  From planning and strategy, through equipment and shooting, to managing models and distribution.

The audience were super enthusiastic with their questions, keep Simon on his feet – speaking through a translator.

Simon revealed a lot about his operation, including a demonstration of his custom database for managing models, equipment and props, as well as behind-the-scenes photos of his shoots, showing impressive grip setups, his 300kg crane, and of course, his camera equipment. Showing the finished video clips from the same shoots of the behind-the-scenes shots tied the two together, creating a complete picture.

The details and specifics of his production processes were truly impressive, leaving most of us shaking our heads in amazement.

That’s all for my coverage of STOCKinRUSSIA 2011. With so much amazing content this year, I’m looking forward to seeing what gets delivered next year!

Veer have just announced their plan to introduce subscriptions with details on the royalties for contributors.  While few microstock contributors still like subscriptions, most of us realize they’re a necessary component for microstock agencies.  So Veer’s announcement doesn’t come as much of a surprise, and there’s little resistance in principle.  However, the devil is in the details.

Subscription Details

The contributor royalty ranges from $0.10 to $3 per download for the standard license.  An ‘Extended Plan’ subscription includes Unlimited Reproductions and the Extended Protection Plan guarantee, with royalties ranging between $0.13 and $3.75.

The download quota is 30 file per day, but prices have not yet been announced.

If you didn’t receive the email notification, just log into Veer to see the details.

The Good Bits

• Microstock subscribers download an average of around 9 files per day. Depending on who you ask it could range out to 5 or 15.
• Taking that average of 9, the average royalty rate we’re likely to receive will be $0.33.  While not great, this is above the rate at some agencies with higher sales volumes than Veer.
• An opt-out has also been provided, with limits, which is a positive step and not common these days.

The Not-so-Good Bits

• Obviously the $0.10 subscription royalty figure features highly on the not-so-good list.
• What’s also quite upsetting is the $0.13 – $3.75 royalty for Unlimited Reproduction rights, which when sold by credits gives us a $35 royalty.
• The opt-out is also only available until October 21.

Why No Minimum

The royalty structure that Veer has chosen – linking royalties to the quantity of downloads of the subscriber – is the iStockphoto model, a variation of which is also in use at PantherMedia.

However, iStockphoto has a minimum royalty which keeps the minimum well above the $0.10 that Veer is offering.

To understand how easy and safe it would be for Veer to do the same, you need to understand the basic concepts of how microstock subscriptions work.

Microstock Subscriptions are All About Averages

If a Shutterstock customer uses their entire quota, downloading files only from contributors on the highest royalty, Shutterstock pays out $294.50 on a $249 subscription.  Their revenue is even lower if a customer buys more than one month at a time.

How can Shutterstock – and every other microstock subscription – afford to pay contributors so much?

The answer is because the reality is very different to the theoretical maximum.

Shutterstock customers don’t download their maximum daily quota and many don’t download any files at all on the weekends.  The average is much lower, and probably not too far from the average of 9.

Let’s assume Veer won’t price their subscription below the industry standard of $250. It has a higher quota, so one wouldn’t expect it to be cheaper.  They could guarantee a minimum $0.26 per download ($250 / 31 days / 30 files) to break even.

And then their profits come from:

• lower average download rates
• paying relatively few royalties on the weekends
• not every month has 31 days

Instead, the current Veer royalty structure guarantees them a minimum monthly profit of $157 per subscriber ($250 – $93) assuming they price at least the industry standard rate.  And we contributors bear the cost of enthusiastic subscribers who download a high portion of their quota.  Ouch!

The Opt-Out

Contributors can opt out by sending an email (yes, you read that correctly).  Instructions are in the announcement email, or via the announcement when you log into your account.

The opt-out must be received by October 21.  After that you will be unable to opt out and new contributors will not be able to opt-out either.

Most contributors I’ve spoken to, and those who’ve posted in MSG thread, are opting out.

Veer have been very generous with me in the past which has created a lot of good will, but I think it’s vital they get the message that this subscription plan doesn’t work for us.  For that reason I’ve opted out too.

Veer Before and After Subscriptions

Veer doesn’t have the selling power of other microstock agencies, they’re also very slow to review content, and still have a few quirks in their system.  But the average royalty per download, until now, is well above average.  Extended License royalties are also well above average.  This is what makes Veer a respected and well-liked agency in the microstock industry.

But all that will go away if the current subscription plan is implemented as it is.

It Wouldn’t Take Much

By simply implementing a minimum royalty, which is not an un-safe bet for Veer, and raising the Unlimited Reproductions royalty to a more realistic level, Veer could quite easily maintain their ‘slow but lucrative and friendly’ reputation among microstock contributors.  Without changes, this subscription plan will create a new low for the industry with Veer right there at the bottom.

Update 2011-09-30:  Veer got the message and it wasn’t what they were expecting. So they’ve updated the subscription plan, raising the minimum royalty to 25 cents and the maximum to $4.95.  The unlimited reproductions subscription has been eliminated, and a facility to buy that extended license with credits will be implemented, where contributors earn $35.00 for those rights. Contributors who previously opted-out have the opportunity to opt back in – see the details in the announcement email.  The reaction to this update from the microstock community has been overwhelmingly positive. Hats off to Veer for listening and responding, and creating what is possibly the most lucrative subscription royalty in microstock!

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

The issue is quite complicated, but given the high impact on microstock photographers of having our photos distributed with our copyright information stripped out, it’s worthwhile understanding.

How Microstock Agencies Strip Metadata

Most microstock photographers embed metadata in the JPG files they submit to microstock agencies. In addition to embedding the title, description and keywords, most also embed their own copyright information in the appropriate fields.

Microstock agencies strip this data out when they create the different sized versions for download, the watermarked previews and the thumbnails. The fields that are stripped, and from which sizes/version metadata is stripped, varies from agency to agency, but all current top microstock agencies strip metadata.

Note that nobody is overly concerned about the stripped title, description and keywords. It’s the stripping of the copyright metadata that disconnects the photos out in the world from the photographer who owns them.

Why Microstock Agencies Strip Metadata

Thumbnail photos and previews are served a lot, so smaller files sizes (files without metadata) make websites load faster as well as saving storage and bandwidth costs.

Robert also says in his post that in the past the only software that could automatically resize photos had no option to retain metadata.

Is it Illegal?

After reading through Bob’x post and the responses he’s included, it seems to me that what microstock agencies are doing is not against the DMCA, simply because they are not intending to create or conceal an infringement.

And according to Robert’s research, the European equivalent is still hobbled as member states haven’t yet implemented the appropriate laws.

The response from Dreamstime on Robert’s post also states that their contributor agreement specifies that metadata is stripped as part of the resizing service they provide for contributors. Ouch!

But while it may not be illegal, it’s certainly against all industry groups’ best practice specifications, is harmful to contributors’ copyrighted assets, and simply just not a cool thing for agencies to do to their contributors.

What can Agencies Do?

Software is now available to automatically process images on ingestion and retain the metadata. With a not-too-difficult upgrade, microstock agencies could update their systems to retain metadata in submitted photos.

It’s easily understandable that thumbnails need to have a small file size given how often they’re served. They’re also barely usable given their size. It’s a similar situation with previews given how regularly they’re served and the protection provided by the watermark.

What can We Do?

While we microstock contributors tend to request or demand a lot from the microstock agencies that license our content, we need to do our part too. Here’s some things you can do to help the situation:

• Make sure you embed your copyright information in the metadata of all the files you submit to microstock agencies
• Demand that new agencies who solicit your portfolio have a written policy of metadata retention
• Ask the agencies you already use to start retaining your metadata and consider re-generating old images where they have stripped it

What’s Your Stance?

Let’s take a quick poll to see what everyone else thinks:

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage

After publishing my report for agencies, I’m now spending more time talking about this part of the business. That has now culminated in a huge opportunity that I’m very excited about. This year I’m hosting three sessions on the program at the PACA International Conference.

What Are the Most Valuable Discussions Today?

I’ve picked three topics that I feel are at the core of what makes the difference between growth and contraction for stock photo agencies today. They’re aligned for an audience of primarily traditional, non-microstock, agencies. And the content is based in microstock, the area of knowledge where I can add the most value.

PACA + Microstock?

For anyone still not familiar with PACA, they’re a member based association representing stock photo agencies, libraries and distributors. Their annual conference is the highlight of the industry calendar. It’s both a networking mecca and an educational conference where experts from within and beyond the industry share knowledge on topics of the day.

While focussed on North America, PACA counts most of the world’s bigger stock photo companies among its members.  Shutterstock and Dreamstime are also both members, as is iStockphoto parent Getty Images.

This year the conference is open to photographers and buyers to help broaden the conversations. ASPP, ASMP and other photographer organizations are  involved in the program and helping bring in photographers to participate.

My Sessions

Time to Replace your Gut Instincts with Real Numbers and Logical Analysis
Are your customers telling you they want one thing but buying something else? How do you know? Is there benefit in profiling stock photo customers by numbers – how many are there, how much do they spend, how frequently do they buy, and what do they buy?

Kelly Thompson Getty Images	Rahul Pathak LookStat	Lanny Ziering SuperStock

ROI and Social Media (Notice how ROI comes first!)
Are you increasing profit with social media, or just increasing brand value, customer satisfaction and other intangible assets?  How can you track social media revenue and effectiveness?  How do you know if the people you are reaching are potential buyers, and if not, where can you find them?  What are the most effective tools and techniques being used by stock photo libraries today.

Viteszlav Valka Pixmac	Par Gandhi Getty Images

Ingestion 2.0 – How to get your contributors back
Where did all our contributors go?  What can a stock photo library do to lower the cost of doing business for contributing photographers? What technologies is everyone else using to reduce, displace or eliminate ingestion costs?  What do photographers want, and how do they evaluate where to place their content?

Alan Capel Alamy	Alfonso Gutierrez AGE Fotostock	Jean-Marie Guyon CandyBox Images

Other Parts of the Program

The rest of the program is also looking great.

The keynote address will be given by Kathy Ryan from The New York Times Magazine.

Tom Kennedy, former Director of Photography for National Geographic and Washington Post Managing Editor of Multimedia, will be speaking about ‘Understanding the Changing Media Landscape’, sponsored by ASMP.

Gail Mooney, photographer and filmmaker, will talk about the innovative distribution methods she used for her “Opening our Eyes” documentary, sponsored by ASPP.

James Pierson, Program Manager of Trust & Safety at Linden Lab, makers of Second Life, will be presenting on copyright infringement.

Important Lessons

Two of the most evident lessons microstock has learned from the traditional agencies are distribution and collections.

For the first five or so years of microstock there was no distribution.  Microstock agency portfolios were silos.  Distribution in the traditional market has, for the life of the microstock business model, been a complex web, often described as “everyone distributing everyone”.  That distribution is now fully integrated in the microstock market too.

For a similar period of time microstock agencies didn’t have collections either.  Fotolia was the first to introduce a separate collection with Infinite, and now iStockphoto has its content split across six different collections.

What’s At PACA for Stock Photo Businesses?

It’s where most of the industry distribution deals are negotiated and re-negotiated.  Beyond distribution it’s also where most businesses find their platform providers and recruit staff members.

The program also makes it the place where stock photo businesses keep up to date with developments, and hear about new technologies, new ideas and new market opportunities.

And this year with some sharing of knowledge from different areas, it may also be where all parts of the stock photo industry come a little closer together.

Get in touch with me if you’re going to be there and we haven’t already connected about it.  It’s October 21-23 in New York City. Registration is available here.

Let the networking begin!

Microstock video? Check out Clipcanvas.com to Sell Stock Videos or sign up to Download Stock Footage