A short history of the Stock Photo Industry – Jim Pickrell

Stock photography is the licensing of rights to existing photographs at fees usually below the cost of producing such photographs. It is based on the idea that if a photo can be licensed many times for fees that might be less than the cost to produce such an image the seller can still cover his costs and make a profit, and the buyer gets the photos he needs for less than it might cost to hire a photographer to produce photos for his specific purposes. Buyers include: book publishers, specialty publishers, magazines, advertising agencies, filmmakers, web designers, graphic artists, interior decor firms, corporate creative groups, and other entities that utilize photography to fulfill the needs of their creative assignments.

This article will explore how technology has changed the stock photo industry and yet, at its core, how the industry and customers needs have remained exactly the same for the last century. There have always been two important reasons for the industry to exist. First, when possible, customers prefer to buy something they can see rather than hiring someone to produce new images that they hope will be satisfactory. And, second, customers need photos at a price that is less than what it would cost to hire a professional photographer to create the image.

It is hard to determine exactly when the first stock photo was licensed, or when there was enough demand that companies could make a business of licensing rights to stock images. One of the keys is having a large enough collection that certain parts of it will always be in demand because there is no way to predict how much demand there will be for any given image in any particular period of time.

For most photographers the licensing of rights to stock images starts as a supplement to other lines of business. Since it is a sideline, finding the time to successfully promote and market the available images is often difficult and tends to take the photographer away from his primary and favored activity of taking picture. Thus, the need for agents who would represent many photographers developed early.

Commercial and Advertising Photography
A convenient point to begin my examination of the stock photography business is the 1920s when H. Armstong Roberts founded his agency. The agency continues today under the name RobertStock. Before Mr. Roberts got into still photography he was a script writer working in the motion picture industry in Southern New Jersey. He became familiar with the idea of production and understood how the movie industry arranged photo situations to tell stories. He understood the importance of planning shoots carefully, rather than shooting candidly, to make sure the resulting images told the story he was trying to tell. He also recognized the need of using the best equipment and models. His early efforts were similar to silent movie type productions, but designed to produce still images that told a story in one photo, rather than a moving picture.

Mr. Roberts focused on the commercial side of the business and recognized that certain generic subjects were used over and over in advertising. He also noted that small and specialized advertisers needed such pictures to promote their products and services, but could not afford the costs of mounting such productions for their own needs alone. In addition, it was of little concern to these potential buyers if someone else used the samd picture so long as it wasn’t being used by a direct competitor. All most commercial buyers wanted was a print that would reproduce will and cost less than what they would have to pay a photographer to take the picture on assignment. Stock photographers could make the images available for less than what assignment photographers would charge because they hoped to sell each image many times.

Subjects that were in demand at the time were: men, women, smiling children, people using cigarettes, cigars, bread, beer, butter, milk, soft drinks, soap, washing, using a toothbrush and shaving. Local manufacturers and sellers of such products needed such pictures for marketing and promotion. Other concepts that were used over and over again were: Spring, Fall, Winter, Thanksgiving, Christmas, office workers, people using the telephone, mother and baby, father changing a diaper and families in all kinds of activities including buying a new home or a new car. All or these and more needed to show happy people enjoying life and how the products improved their lives. An insurance company might use a picture of a bride and groom to say, “Now’s the time to get insurance.”

In the early years pictures of models with Irish features tended to sell best. And the use of people with similar features tended to be self perpetuating because photographers looked for models that looked like the pictures that has sold in the past.

Bob Roberts, grandson of H. Armstrong Roberts, says that from the beginning 50% of the revenue came from advertising sales, although there was also demand for some of the same type of imagery for editorial and product uses such as magazines, books, calendars and greeting cards. During this time period everything was shot on 4x5 (or larger) film and was almost exclusively B&W.
Editorial Side
There was also demand for editorial image, but for the most part different agencies focused on this segment of the market. Editorial users were often looking for photographers to shoot assignments more than they were looking for stock images and many agencies got assignments for their photographers as well as selling stock. Editorial users often wanted a series of pictures that told a story rather than single image illustrations. The needs of editorial users were often more specific and less generic than those of commercial buyers.

Culver pictures began collecting photographs of people, places, events, occupations, entertainment and artifacts in 1926. Popular subject categories include: business, family, history, personalities, transportation, recreation & sports, science & invention, movie stills and performing arts.

Dr. Otto Bettmann established his editorial oriented collection when he emigrated to the U.S. from Germany in 1934 carrying two steamer trunks containing 25,000 prints, books and negatives. He had begun his professional career at the Prussian State Art Library in Berlin as a curator of rare books and built a personal collection which he turned into a business when it became necessary for him to re-locate to the U.S. In 1972 he acquired the Underwood & Underwood Collection a rich resource of negatives and prints from the late 19th century to World War I. By 1995 when Bill Gates acquired the Bettmann collection it contained almost 17 million images.

Black Star Publishing Company was founded by German immigrants 1935. This company focused on obtaining assignments for the photographers it represented. However, since their customers were only buying first rights, they built a library and made stock sales, but stock was minor part of the business into their into the 1950s. Freelance Photographers Guild (later FPG International) was founded in 1936 and specialized in producing photo-essay material for magazines.

Other agencies with an editorial focus were Pictorial Parade founded in 1935 in Europe and the Hulton collection founded in 1938 by Edward Hulton, the publisher of numerous magazine titles. Also founded in 1938 was Frederick Lewis Stock Photos. Textbooks, encyclopedia and travel were a big part of the market for stock from these collections.

Some agencies like Bettman, Culver and Hulton focused on collecting, storing and cataloging pictures that they owned and seldom was it necessary for them to pay a royalty when they licensed rights to an image. Agencies like Black Star and FPG that specialized in representing photographers for assignments, filed the images produced and normally paid a 50% royalty when they were able to license rights to a stock image.
In the 30s most images were shot on 4x5. The first Rolleiflex was produced in 1928, offering a smaller film size, lower production costs and more shooting flexibility, but the 4x5 Speed Graphic remained the primary camera for most professional photography through the 1950s. In 1934 the first 35mm film was introduced but it was aimed at the amateurs and considered too grainy for most professional use.

Finding The Buyers
Most of the editorial companies established their headquarters in New York, London or Paris where most major publishing firms were located. Mr. Roberts, on the other hand, established his headquarters in his home town of Philadelphia and before WWII had representative offices with files of prints in: New York, Chicago, Boston, Detroit, Los Angeles and St. Louis as well as representatives in England, Germany, France and Italy. Potential buyers would either visit one of the offices to review the files, or request a selection of images for consideration. When Roberts decided to keep a particular photograph from a shoot he would make 25 to 28 8x10 prints. The prints that were not going to the offices were mailed to certain good customers. The company also had on-the-road sales people who visited potential customers all over the country, got listings of advertising agencies from local yellow pages and then sent these potential image buyers catalogs. In 1930 Roberts produced the first catalog of stock images and the company continued to produce up to 100 page catalogs and marketing brochures, largely black and white, right through the 1970s

Using Color
In 1935 Kodachrome ISO 10 was introduced in a 35mm format. Given its slow speed it was not very practical for stock photography as pictures needed to either be shot in bright sunlight, or with very expensive lighting productions in order to produce satisfactory results. Also, there was no good way to distribute high quality multiple copies of color pictures which was a key to making a stock photo operation work. According to Bob Roberts his grandfather spent a fortune before WWII trying to figure out how to bring color photography into stock, but was unsuccessful.

Making good quality duplicates of color transparencies was the major problem. The key to success in stock is having a way to simultaneously distribute multiple copies of each selected image. Not until Kodacolor was introduced in 1941 was it possible to make multiple color prints of negatives. Stock photographers started shooting color negative material, mostly on 4x5 and making large numbers of prints for distribution, but this was still costly and black-and-white remained the primary media for stock images for some time. It was not until the advent of Ektachrome in 1946 that it began to be practical to produce and distribute color material at a reasonable price that would be satisfactory for reproduction. Even then it took until almost the 1960’s before there was significant use of color in stock photography.

ASMP Founded
Another major milestone in the stock photography business came in the early 1944 when the Society of Magazine Photographers, later named the American Society of Magazine Photographers was founded. The leaders of ASMP were some of the leading photojournalists of the day and the major goal of the organization was to improve the artistic, ethical and material standards of the profession.

At the time there were no minimum day rates and most magazine jobs were shot on speculation. Life, Time, Colliers and the Saturday Evening Post were among the major picture magazines with Life being the biggest user of photography. Every editorial photographer wanted to be published in Life, and consequently the magazine had great power to enforce low payment policies and not pay for secondary uses. At the same time, in order to have previously unpublished photographs of every major news event each week, Life found it necessary to use the services of many photographers around the world.

In 1948, Collier’s magazine started assigning picture spreads on “a semi-speculative basis.” The Society fought for the right to represent magazine photographers in matters of wages and working conditions, was licensed by the State of New York in 1951 to act as a labor union and in that year established a Code of Minimum Standards that, while not legally enforceable, spelled out what the Society believed to be fair pay rates for freelance magazine photographers. Many of the leading photographers who were members of ASMP refused to work for magazines that would not agree to the standards and one by one magazines began to conform to the standards.

The establishment of the Code began to insure that photographers would be paid reasonable and consistent rates for assignments and that they would be paid each time a photograph was used.

Despite this improvement in getting paid for every stock use most photographers and editorial agencies were still focused on getting assignments. During the period from the 40’s to the 70’s most editorial stock pictures were originally shot as part of an editorial assignment for some publication so the photographer could at least cover his basic expenses. The outtakes from such assignments were then made available as stock, but the revenue generated from stock was usually not a major part of a photographer’s income. Photographers were encouraged to get some kind of minimum guarantee before embarking on an assignment. Seldom would photographers produce images purely on speculation and the mantra of ASMP well into the 80s was “don’t shoot on speculation.”
40s to 70s.

In 1946 Kodak Ektachrome was introduced enabling still photographers to process color film themselves rather than having to send it to a Kodak processing lab as was the case with Kodachrome. This film had a much higher ISO than Kodachrome and it became the standard for many professional photographers even though it was not nearly as sharp as Kodachrome ISO 10. For this reason most customers insisted on 4x5 or at a minimum 2 1⁄4 x 2 1⁄4 film in order to obtain quality reproduction. Even into the late 70s and early 80s many printers were complaining that they couldn’t produce high quality reproductions from 35mm transparencies and the photo buyers would insist on 2 1⁄4 x 2 1⁄4 at a minimum.

During the 50s there was some use of color, but still relatively little. For the most part the printing industry required a 10 to 14 day lead time to prepare and proof color separations. This made it impossible for many publication to use color on anything but long lead time feature projects. Color shots tended to be more staged due to the limitations of the materials and the large format equipment. In the editorial arena it was generally felt that B&W was the better medium for telling picture stories.

Parade and Family Weekly, and other Sunday Supplements did tend to use color because they had long lead times.

In some cases agents would carry packages of images around to various editors as they tried to sell pictures. However, it wasn’t long until the agencies simply housed the images and the editors called with a specific request or sent a staff member to research the agency files. The standard percentage split at this time was 50/50 with the photographer covering all the costs of production and the agency covering all the costs of storing the images, marketing, negotiating rights, tracking of the images and collection.

In 1954, the first high speed black & white film Kodak Tri-X was introduced making it possible to take black and white pictures under much lower light conditions and to produce more action photos. This quickly became the favored film of editorial photographers.

One thing that would eventually drive magazine editors to use more color was competition with TV, but in 50’s this was not a factor. The first color TV broadcast was in 1953, but TV’s were rare and prohibitively expensive in the 1950s. All color broadcasts were live until 1958 when videotape was introduced. NBC was the only network with regular color programming in the 1950s and NBC did not become a 100% color network until 1966.
As world markets for still photography grew some editorial photographers decided they could earn more by taking pictures on speculation and making them available to various magazines at a “space rate” than they could get by doing day rate assignments for Life or other publications.

Stock production also had the advantage of being something the photographer could do on his own schedule rather than waiting for a magazine to give him an assignment.
Primary agencies representing photographers also began to make the same type of arrangements Roberts had made in the 30s to expand the distribution of the images they represented. They sought out agencies or distributors in other parts of the world to represent the work of their photographers in the selling agency’s territory. In the event of an image being licensed, typically the selling agency retained 30% to 40% of the gross license fee and the remainder was split between the photographer and his primary agency.

During this period there were relatively few publishing outlet compared to today because the era of the specialist magazine didn’t really begin until the 70s and 80s. Prior to that time, (from the 40s through the 60s) most magazines that used stock pictures tended to be general interest publications.

National Geographic and monthly magazines used color photographs in the 50s, but it wasn’t until the early 60s that news magazines started using color on breaking stories. In order to reproduce color they had to have access to transparencies and usually preferred a large format original transparency.

Also, during this period there was comparatively little stock photography used in advertising. In general, stock was thought by the advertising community to be “seconds” of low quality. Part of this was because most of the color being shot was 35mm and the advertising community wanted 4x5 or 8x10 for the sharpness. But, comparatively few photographers were shooting stock with these large format cameras given the cost of materials and the lack of flexibility because virtually all shots had to be carefully staged. The U.S. copyright law also inhibited the production of stock during the period because it was often assumed that once a customer paid for a picture the customer owned the picture despite verbal or contractual agreements to the contrary. Thus, it was often difficult for a photographer to license rights to a picture more than once. European copyright laws may have been stronger in favor of the creator at that time.

1976 Copyright Act
The 1976 Copyright Act changed everything in the U.S. The creator was made sole owner of the copyright unless he or she signed a “Work For Hire” agreement, which virtually no photographer would do. As a result photographers had much more control over the use and re-use of their images. It became much easier for photographers to license multiple rights to a given image.

For many years, stock photography consisted largely of outtakes ("seconds") from commercial magazine assignments. By the 1980s, it had become a specialty in its own right, with photographers creating new material for the express purpose of submitting it to a stock house. Agencies attempted to become more sophisticated about following and anticipating the needs of advertisers and communicating these needs to photographers. Photographs were composed with more of an eye for how they might look when combined with other elements; for example, a photo might be shot vertically with space at the top and down the left side, with the conscious intention that it might be licensed for use as a magazine cover. Leading agencies during this time included The Image Bank, Four by Five, Comstock Images, FPG, The Stock Market and Masterfile.

Print Catalog Era
Previous to the print catalog era, buyers had either visited agencies or libraries to pour through file cabinets of images in order to find the one they needed, or they would ask researchers to make a preliminary selection of the subject needed and send them the selection for final consideration.

In the late 70’s a few advertising photographers began to recognize that there were certain types of images that were used over and over in brochures and print ads. In many cases the buyer didn’t care if someone else had used the same image to advertise another product or service as long as the image fulfilled the buyer’s specific need. These photographers began to recognize that if they carefully produced images of the quality normally used in advertising using professional models and good production values they could sell the images many times and offset much higher production costs than might be the case for the editorial photographer. These images overcame the advertising communities’ objection that “stock images” were seconds of low quality. A leading proponent of this strategy was Tom Grill who worked for Four by Five (later named Superstock) and was a partner in founding Comstock.

Another part of this strategy was to produce marketing brochures and catalogs that showed a selection of images and mail these catalogs to thousands of potential buyers. Catalogs had been previously used somewhat by Roberts and others to show calendar and greeting card images to prospective customers, but in general they did not contain a lot of the people and lifestyle imagery that was of greatest interest to the advertising community.

In the 80’s the use of print catalogs began to grow, despite the fact that they were hugely expensive to produce. More and more companies began to release catalogs on an annual basis, and in some cases more frequently. At first these advertising catalogs were mailed free of charge to every potential photo buyer in the U.S. that the companies could identify. The catalogs were expensive to produce and distribute, but the return-per-image was so much higher than the average image in the file that the expense was justified. Before long the companies began to offer catalogs and sets of dupe images to other distributors around the world. The leading company in this movement was probably The Image Bank which at one point had about 70 distributors around the world.

The catalogs also began to get thicker and thicker offering the customers more and more choice of images for their consideration. At one point a distributor in Europe reported that one of his major customers had more than 450 different catalogs in its library.
By the late 80s, print deadlines were getting tighter, and many buyers no longer had the luxury of time to do this research. Thus, more and more they turned to making their selection from what was available in the print catalog.

Photographers discovered that if they could get images into one of the better print catalogs it would generate much more revenue than images that were only available in the general file. As a result photographers became willing to either pay large per-image fees for placement of their images in a print catalog, or give up an additional percentage of the sale on catalog images. But, as the buyers had more and more catalog images to choose from the return per-image began to decline due to oversupply.

Also, during this period photographers began to offer dupes of their best images to multiple agents around the world to have the potential to simultaneously make multiple sales for various non-competitive uses in various parts of the world. Some photographers started making “dupes in camera” by shooting multiple frames of each situation. Making film dupes was costly, but generated sufficient additional revenue to be worthwhile, particularly for those who couldn’t get many images into the print catalogs. Later, when digital delivery became possible film duping became redundant. Digital dupes were much easier to move around the world and of higher quality.

By the early 90’s probably 80% of the pictures used for commercial purposes were those that could be found in print catalogs. And the commercial market was equal in size, if not somewhat larger than the editorial market in terms of gross revenue. At this point many libraries that focused on the commercial/advertising market might have had 500,000 to several million images in their files, but 80% or more of their revenue came from the 15,000 to 20,000 selected images that were in their various print catalogs.

Methods of Licensing Rights
In the last fifteen years several new systems for licensing rights to stock images have been developed. There are now four different ways that images are priced and licensed -- Rights Managed, Royalty Free, Subscription and Micro Payment.

Prior to the 90s some editorial images were sold by subscription, but the principal method of licensing rights to stock images for commercial/advertising use was based on usage. The size of the use, the placement of the image (cover or inside), the circulation of the product, how long the image was to be used, and the country or region where it would be used were all considered when establishing a usage fee. It was also possible to purchase exclusive rights which prevented competitors from using the image for a specific period of time. Exclusive sales can command many thousands of dollars, both because they tend to have high-exposure and because the seller is gambling that the image would not have made more money had it remained in circulation on a non-exclusive basis. This method of licensing later became known as Rights Managed (RM). Certain extensive RM uses may be priced at $20,000 or more and some very small uses may be priced under $200. Getty Images current average price for an RM license is $578.

Images of people that have not been model released must be licensed as RM because they cannot be used in advertising. They can be used for news and educational purposes, but there needs to be some means to control who uses each image and how it is used and RM licensing is the only system that allows for such controls.

The Royalty Free (RF) licensing system offers a photo buyer the ability to use an image in an unlimited number of ways for a single fixed price license fee. RF license fees tend to be lower than RM. However with royalty free licensing there is no option for getting exclusive usage rights and many other customers may simultaneously use the same image. There are some minimal restrictions over how RF images can used, but basically there is no control.

Originally, sellers of RF images were very rigid in their pricing structures and maintained the same price for usage in all markets worldwide. Recently, they have become