We saw some years back with the rapid introduction and growth of Microstock photography. This familiar trend is pointing towards a similar rise: that of Free stock photos.
The community is abuzz in anticipation of the consequences this will have on the industry.
We can trace this back to October 2015, the Digital Media Licensing Associations (DMLA) annual conference in the Big Apple. The theme of the conference was ‘Unplug, Connect and engage’ with a special session dedicated to the business of “Free”. Free stock photo websites and their rise to prominence.
Since the word ‘Free’ is synonymous to ‘zero compensation’ or just put plainly ‘without any cost’, attendees were blown away at how much revenue was generated by some of these ‘Free photo’ websites. How can a free photo website generate any money? How?
The panellists, representatives from Morgufile, Mitch Martinez and Freepik (the big boys), put this widespread conviction to rest, as they went as in-depth as they could into providing the method behind the magic.
They had us at Free
The appeal of Free; generates such a high volume of traffic that by monetizing just a part of it, they are capable of covering not only the lack of licensing fees but manage to outperform most traditional stock photo agencies when it comes to profit.
To break it down further, there are two models to convert this traffic into revenue sources.
- Advertising fee
- Affiliates fee
Advertising is straightforward, wherein the traffic is enticed to click on banner ads and each click generates a fee paid by the advertiser. Normally calculated by the thousand, CPM (The “M” in denotes the Roman numeral for 1,000).
To put it into perspective, Unsplash (a successful free photo site) claims 1.63 billion views a month.
Affiliate fees work when traffic is routed to the more traditional photo agencies that charge per licence. The free site offers a low-quality image, whereas the paid image is of much higher quality. Every time a purchase is made, the free site receives between 15-20% of the sale price.
The combination of these two revenue streams enable any such free site business to great financial health.
The funny side of things
It is ironic to say the least that certain free photo sites are heavily reliant on traditional stock agencies and the affiliate revenue they earn from there. No traditional stock agency, no free photo website.
Surprisingly, the main purpose of many free photo websites is not to ensure users find the right free image, rather it is more to sell advertising and redirect traffic elsewhere.
It is also amusing that some of these websites were started with a completely different intention. Unsplash, till recent, was just a marketing arm of Crew with its sole goal of generating traffic and directing it to the Crew website! It was later that the founders saw the success and potential in it and sold Crew to solely focus on this instead.
Other traditional stock houses like Getty Images have dabbled in similar strategies, with their free photo website Freeimages, just being used as a referral medium.
Where to from here?
The main threat is of companies setting up their own free photo websites with no intention of generating revenue from the actual sale of photos, rather just using them to redirect traffic to their own websites. This convenience and opportunism could very easily divert a chunk of the traffic and more importantly buyers, away from microstock and traditional photo agency related sales.
At the end of it all, while the money keeps rolling in, the allure of anything free coupled with the internet’s unlimited content, it is hard to see free photo websites going anywhere. Even though they serve as small segment of the market, they are sure to gain importance in a company’s photo collection along with becoming an integral part of a good SEO (Search Engine optimisation) strategy. So far it has not manifested into a large enough threat to the traditional photo agencies and microstock, but it has the potential to sneak up from behind and spring a surprise.