65. Stock Photos

Summary

The Economics of Everyday Things: Episode 65 – Stock Photos

Host: Zachary Crockett
Guest: Yuri Arkurz, CEO and Founder of People Images
Release Date: September 30, 2024

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1. Introduction to Stock Photography

In this episode, journalist Zachary Crockett delves into the ubiquitous world of stock photos—those seemingly generic images that populate our daily lives, from customer service chatbots to investment brochures and gym advertisements. Crockett sets the stage by highlighting the omnipresence of these images and questioning their economic and creative underpinnings.

Notable Quote:
"In daily life, you're surrounded by perfectly generic images."
— Zachary Crockett [01:05]

2. The Evolution of Stock Photography

Crockett traces the history of stock photography, explaining how it has transformed over the past century. Originally, newspapers and magazines commissioned photographers to capture specific images. However, in the mid-20th century, companies began to archive broad collections of photos, allowing businesses to license images for various uses. This method was cumbersome, relying on extensive catalogs and manual selection processes.

Notable Quote:
"They sent out these big catalogs where you had to go page by page and choose your file number."
— Yuri Arkurz [03:56]

3. The Rise of Microstock

The late 1990s and early 2000s marked a revolution in stock photography with the emergence of microstock agencies like Shutterstock and Adobe Stock. These platforms democratized the industry, enabling amateur photographers to upload and sell their work. Microstock introduced lower prices and fewer restrictions, expanding the market but also intensifying competition.

Notable Quote:
"Customers started choosing cheaper files with less restrictions."
— Yuri Arkurz [05:09]

4. Business Model and Economics

Stock photography operates on a licensing model where customers pay for the rights to use images, either through subscriptions or individual purchases. Photographers earn royalties based on sales, typically ranging from 15% to 40%. However, with millions of images available, the average payout per image is minimal, often just a few cents.

Notable Quote:
"Most stock photographers earn around 30 cents every time someone licenses one of their images."
— Yuri Arkurz [08:26]

5. Creating Stock Photos: Process and Challenges

Yuri Arkurz emphasizes the meticulous process behind producing high-quality stock photos. From concept development to execution, every shoot requires extensive research, planning, and investment. A single office-themed shoot, for example, can cost around $5,000 and yield over 100 images, with a break-even point of two to three years.

Notable Quote:
"We look at how much a shoot will bring in in its whole lifetime and have a rough idea about when it's going to break even."
— Yuri Arkurz [17:05]

6. The Role of Models in Stock Photography

Selecting the right models is crucial for creating relatable and versatile stock images. Unlike traditional modeling agencies that favor high-fashion looks, Arkurz seeks models who pass his "weekend test"—individuals who appear approachable and trustworthy. Diversity in ethnicity, age, and body types is also a priority to meet the varied demands of clients.

Notable Quote:
"The weekend test is essentially just that. You look at a person and just judging from their looks. You have to now decide really quickly if you would want to spend a whole weekend on a stranded island with that person."
— Yuri Arkurz [18:08]

7. The Future of Stock Photography: AI and Competition

The stock photography industry faces new challenges from free stock photo websites and advancements in artificial intelligence (AI). Tools like DALL-E and Midjourney can generate images based on text prompts, potentially reducing the demand for traditional stock photos. However, Arkurz believes that human creativity and the nuanced needs of professional designers still give human photographers an edge.

Notable Quote:
"AI is definitely a big shakeup. Is it a threat for the industry? Yes and no."
— Yuri Arkurz [24:41]

8. Notable Stories and Anecdotes

Throughout the episode, Arkurz shares intriguing anecdotes, such as stock photos inadvertently becoming internet memes. One such instance involved a photo of a woman smiling into the camera, which became the "Good Girl Gina" meme. Although unauthorized uses can lead to copyright issues, Arkurz views these viral moments with amusement rather than pursuing legal action.

Notable Quote:
"You can forget about trying to monetize that. It's not going to happen. You're going to have to just laugh."
— Yuri Arkurz [21:45]

9. The Intricacies of Keywording

To succeed in a saturated market, effective keywording is essential. Arkurz explains that each photo must be meticulously tagged with specific and sometimes obscure keywords to enhance visibility in search results. This process requires extensive knowledge and attention to detail, often involving research into specialized subjects like botany or weaponry.

Notable Quote:
"It's a very nerdy enterprise to be a keyword person. You've got to have this enormous, vast amount of common knowledge spelled perfectly, and then know all kinds of strange words and weird things."
— Yuri Arkurz [22:36]

10. Conclusion: Navigating a Competitive Landscape

Despite the increasing competition and technological disruptions, the stock photography industry remains dynamic. Successful photographers like Yuri Arkurz continually adapt by understanding market trends, investing in high-quality productions, and maintaining a robust portfolio. The blend of artistic vision and economic strategy is pivotal in navigating the challenges of this ever-evolving field.

Notable Quote:
"The better approach is to try to get ahead of your competitors by keeping a constant eye on trends."
— Yuri Arkurz [10:12]

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Produced by Zachary Crockett and Sarah Lilly, mixed by Jeremy Johnston, with contributions from Daniel Moritz Rabson. Special thanks to listeners Callie Kumnick and Dylan James for their support.

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This episode offers a comprehensive exploration of the stock photography industry, shedding light on its economic principles, creative processes, and the challenges posed by modern technological advancements. Whether you're a budding photographer or simply curious about the images that shape our everyday experiences, Episode 65 provides valuable insights into the hidden economy behind stock photos.

Transcript

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[Zachary Crockett]

In daily life, you're surrounded by perfectly generic images. If you're messaging with a customer service chatbot on the Internet, you might be greeted by a photo of a smiling woman who's wearing a headset. If you're flipping through a brochure of investment options at a bank, you'll see a shot of a diverse group of people in suits in a brightly lit conference room. And if you pass a bus stop advertisement for a local gym, you might catch a glimpse of a runner racing off into the sunset.

[Yuri Arkurz]

Our stuff is the secret background of the whole world.

[Zachary Crockett]

That's Yuri Arkers. He's the CEO and founder of a company called People Images, and he's one of the most prolific stock photographers in the world.

[Yuri Arkurz]

Essentially any big city. If you walk for 10 minutes, you'll probably see five or six of my shots. Pretty much all the big brands at some point or another have used our files.

[Zachary Crockett]

When a company needs an image that embodies a particular vibe in a bland but professional way, it often buys a stock image, an existing photograph that can be licensed for commercial use. There are millions of stock photos for sale on websites like Shutterstock and Adobe Stock depicting nearly every subject you can dream up. If you need a photo of an elderly Japanese woman on a tractor or a heavy set man in a blue shirt eating a donut, a stock photographer like our KERS probably has you covered.

[Yuri Arkurz]

The total database we have right now is 600,000 images.

[Zachary Crockett]

But with commissions shrinking and new kinds of competition on the rise, it's getting harder and harder to make money in the stock photo game.

[Yuri Arkurz]

It's gotta be the right balance, it's gotta be well lit, it's gotta have good composition. And even if you have all those elements put together, you're probably gonna get sales for about a year and then it's over.

[Zachary Crockett]

For the Freakonomics radio network, this is the economics of everyday things. I'm Zachary Crockett. Today stock photos. 120 years ago, if a newspaper or magazine needed a generic photo, say a shot of the White House or a family enjoying a picnic, you would have to send a photographer. But in the mid 20th century, a number of companies stepped in to let them outsource that service. They assembled archives of photos with broad applications and provided them for a fee. This model became the norm for journalism, advertising, corporate communications and and other businesses in need of basic images. Back then, the ordering process was a bit cumbersome.

[Yuri Arkurz]

They sent out these big catalogs where you had to go page by page and choose your file number. You would call and say, I want this file number, XY2467. And then you would be sent a film with that file that you could then scan and put in your print.

[Zachary Crockett]

In the 1990s, Archives of Physical photos were transferred onto computer servers and stock agencies sold CDs with preloaded images. There was a limited amount of space available on those CDs and the photographers who made the cut were handsomely rewarded.

[Yuri Arkurz]

The photographers that were in this little elite clan, they were making massive amount of money. They were selling at very high prices. And then on top of that, it would be rights managed. Which means that if you wanted to print it just a tiny bit more than what you said you wanted it in, you pay extra or you put it on a brochure, then you pay extra. So it's very tightly managed and incredibly tedious for the consumer.

[Zachary Crockett]

But in the 2000s, stock photography experienced a revolution. Websites started popping up that allowed anyone to upload and sell their photographs.

[Yuri Arkurz]

Customers started choosing cheaper files with less restrictions. They might be paying a dollar per download versus $1,200 or $600.

[Zachary Crockett]

This new model was called Microstock. And it opened the door for amateur photographers like Yuri Arkurz. While he was a student in Denmark in 2006, he started posting his photos to one of the bigger micro stock websites, Shutterstock.

[Yuri Arkurz]

I was studying psychology, so I needed the money. I was a dirt poor. I decided, okay, I'm going to put three months of my time just into shooting as much as I possibly can.

[Zachary Crockett]

Good timing, an eye for the right images and a lot of work led to quick success.

[Yuri Arkurz]

I would see my shots in the street or on newspapers and things like that. I was ecstatic. And then it went so fast. I went from making $500 one month, $4,000 the next month, $12,000 next month. I remember having gone from having a hobby to making about $40,000 a month. That was about two years in. And at that point I had some pretty tough decisions because this was obviously more money than I was going to make as a psychologist. I'd have to be Dr. Phil to make that kind of money.

[Zachary Crockett]

Today, Arkurz runs a 20,000 square foot production studio in Cape Town, South Africa. His company, people images, does three to four shoots every day and employs more than 100 people photographers, stylists, editors, lighting crew members. And he's amassed an archive of more than 600,000 stock photos and 250,000 stock videos, which he sells on many different online platforms.

[Yuri Arkurz]

The dope stock Shutterstock dreamstime123rf free pick istock deposit photo these sites host hundreds.

[Zachary Crockett]

Of millions of stock photos across nearly every category imaginable. There are doctors gleefully showing charts to patients, close ups of men in suits shaking hands and dogs lounging in hammocks. Search for the word marriage on Shutterstock and you'll get 3.4 million results. Sunset more than 14 million. For Shutterstock, the business model is fairly simple. Customers pay a monthly subscription fee for a set number of downloads, or they can buy images individually. A standard license grants buyers broad rights to use the photo anywhere in the world, forever. For the photographer, the payout comes in the form of a royalty, a percentage of the sale price for each photo. That payout ranges from 15% to 40%, depending on how many photos the photographer sells in a given year.

[Yuri Arkurz]

They've been fairly successful agencies in implementing all kinds of tier systems and brackets and levels to try to not pay out as much as they need to. If you don't keep feeding the beast and upload all the time, it's very hard to get up those ladders, so to speak, and get the high royalties. Then that can take you five years to get all the way up to the top of that, then the sales will be very small.

[Zachary Crockett]

Most stock photographers earn around 30 cents every time someone licenses one of their images. Arcurs, who is at the top of the food chain, says his average payout works out to around $1. And on a typical day he'll log more than 10,000 sales, while Arkurz has more than half a million photos. Only a few of them attract a lot of buyers.

[Yuri Arkurz]

About 10% of the whole portfolio will be 90% of the sales. It's a very congested market with a lot of competition. A lot of files will be on a stock site and circulate it for a couple of weeks, and then the algorithms will determine that it hasn't got enough markers in terms of clicks, views, and downloads to keep being surfaced, and then they'll just dump it in the background.

[Zachary Crockett]

One financial measure of a stock photographer is return per image, or rpi. It's how much revenue each image generates every month, Averaged across the photographer's entire portfolio. It includes the thousands of photos that don't sell at all.

[Yuri Arkurz]

An rpi gives you a rough indicator of how successful your assets are. So if your RPI sits around $1 per asset per month, then you have an incredibly high rpi. I think the average will be cents to the dollar.

[Zachary Crockett]

If you want to be a successful stock photographer, you can't just upload random shots of your grandma eating a hamburger. You have to know what's going to sell.

[Yuri Arkurz]

You can look at what's popular on sites. The only problem with doing that is that you're essentially replicating something that's already there. So that's a source of inspiration you want to minimize.

[Zachary Crockett]

The better approach, says rk, is to try to get ahead of your competitors by keeping a constant eye on trends.

[Yuri Arkurz]

You've got to be good at reading between the lines a little bit in terms of what's happening in the media. Elon musk is shaking hands with Trump. Okay, noted. Politics. Let's shoot that. And then now you just need to put your creative mind to work and start to imagine. Okay, if I'm going to write an article about politics, what kind of pictures do I need? Okay, I might need a picture of people putting in their ballots in the voting station. Okay, I'm going to take that shot. They might be in doubt. Okay, I'm going to take that shot. They might be convinced by their friends. Okay, I'm going to try to stage a scene that looks like that.

[Zachary Crockett]

The artistry of a good stock photo lies in knowing how to visualize an abstract concept.

[Yuri Arkurz]

Let's say we're focusing on making a factory. Ask yourself, what kind of shots would the owner of the factory want? Well, he would probably want his staff lined up outside the factory with the factory in the background. And they look confident and they're dressed nice. All right, so we'll shoot that. You'll probably want some detail shots, some hands, some fingers doing some really intricate and difficult things. He would want to show off the.

[Zachary Crockett]

Machinery, but stock photos need to have many applications. Arkhurst's hottest selling asset at the moment, for instance, is a photo of a woman taking a break from a run with her hands on her knees. She's standing in front of her bright blue sky, smiling and gazing hopefully toward the horizon.

[Yuri Arkurz]

That can be used for so many things. It's kind of uplifting. It's got positivity. It's a picture that could be used in a commercial for a bank, but also an insurance policy or you know, want to take some time off or get in shape. So it's got all these utilizations open. That's really good for sales.

[Zachary Crockett]

Photos like this look pretty simple on the surface, but creating them requires pricey photo shoots, models with a specific look, and some technical wizardry.

[Yuri Arkurz]

It is not like the good old days where you could just take a bunch of young people, put them in a suit and put them around the table and off you go. Those days are over.

[Zachary Crockett]

That's coming up.

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[Zachary Crockett]

The Economics of Everyday Things is sponsored by NetSuite. What does the future hold for business? Ask nine experts and you'll get ten answers. Bull market Bear market rates will rise or fall. Can someone please invent a crystal ball? Until then, over 40,000 businesses have future proofed their business with NetSuite by Oracle, the number one cloud ERP bringing accounting, financial management, inventory and HR into one fluid platform with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. When you're closing the books in days, not weeks, you're spending less time looking backwards and more time on what's next. Whether your company is earning millions or even hundreds of millions. NetSuite helps you respond to immediate challenges and seize your biggest opportunities. Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com everydaythings the guide is free to you at netsuite.com everydayThings netsuite.com everydaythings the economics of Everyday Things is sponsored by Indeed. With Indeed, there's no need to search for canvas candidates you'll just match Indeed doesn't just help you hire faster 93% of employers agree Indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey. Ditch the busy work. Use Indeed to connect with candidates faster by scheduling, screening and messaging. Leveraging over 140 million qualifications and preferences every day, Indeed's matching engine is constantly learning from your preferences, so the more you use Indeed the better it gets and listeners of this show will get a $75 sponsored job credit. To get your jobs more visibility@ Indeed.com everydaythings just go to Indeed.com everydaythings right now and support our show by saying you heard about Indeed on this podcast. Indeed.com everydaythings Terms and conditions apply. Need to hire you Need Indeed. Once Yuri Arkhurst settles on a concept for a stock photography series, he and his team usually spend at least two days researching the topic. Arkhurs takes realism very seriously. If he's producing a series of shots of a computer engineer at a desk, he'll make sure that real code is displayed on the monitor. If he's staging a rock concert, he'll hire a band to play on stage and put on a real show. And if it's an office themed shoot, he'll ask the models to give actual PowerPoint presentations.

[Yuri Arkurz]

Obviously it is staged, but it would be very difficult to pinpoint that this is staged. You want to catch the model in the middle of a sentence, actually talking. So when you direct a set like this, you want to give them talking points. You want to actually have them talk about what's on whatever display media they're using and make sure that they don't just say nonsense. They actually try to explain stuff on.

[Zachary Crockett]

The day of the shoot. There's a strict plan for every shot because wasted time is expensive.

[Yuri Arkurz]

You need a location, you need a fairly big crew because you're going to be setting up in the morning. You need lights, you need catering, you need four, five, six models. You need at least one producer, probably a focus puller camera operator.

[Zachary Crockett]

A recent office themed shoot RKURZ did, for instance, cost around $5,000 and yielded 106 images. That's an investment that won't immediately be earned back.

[Yuri Arkurz]

We look at how much a shoot will bring in in its whole lifetime and have a rough idea about when it's going to break even. Generally the break even point for shoots is about two to three years. Which unfortunately means that if you want to start out in this industry, you need a pretty big loan.

[Zachary Crockett]

Another challenge is finding the perfect model. Traditional modeling agencies usually can't give arcs what he's looking for.

[Yuri Arkurz]

The model type that they have is a very like high fashion model type, Runway model look. We can't use that at all. For us, a skinny person is a problem. It is not a good asset to have on one of our shoots because it stands out. There is a general misconception that prettier people sell better, but that's actually not the case. The case is that people that look trustworthy sell well.

[Zachary Crockett]

Arkhurst looks for people who pass what he calls the weekend test.

[Yuri Arkurz]

The weekend test is essentially just that. You look at a person and just judging from their looks. You have to now decide really quickly if you would want to spend a whole weekend on a stranded island with that person. It's the guy next door, girl next door. They have some appeal and they look just approachable.

[Zachary Crockett]

Because stock photos attempt to replicate real life, there's a demand for people of all ethnicities, races, sizes, shapes and ages.

[Yuri Arkurz]

Some of the best selling models are older people with good faces. Senior models sell extremely well and are very willing to suit.

[Zachary Crockett]

To find models, Rkurz puts out casting calls on social media. He puts a sign out in front of his studio in Cape Town for walk ins and will sometimes stop people on the street who he thinks have the right look.

[Yuri Arkurz]

One of the best places to get a really good diverse group of models is farmers markets. They're amazing, really stylish, trendy, healthy people.

[Zachary Crockett]

Stock photography models don't get royalties for the photos they're featured in. They're typically paid a day rate. But sometimes they get another payoff in the form of celebrity.

[Yuri Arkurz]

You can get a lot of funny fame stories from the models that have been circulated the most. One of our top selling guys, he's called Rodrigo. He's everywhere in Brazil and they love him for it. So he's become this little local celebrity. If you look at the same pretty face or handsome guy for 10 years straight, it almost becomes a personal relationship, I guess.

[Zachary Crockett]

Photos purchased through micro stock agencies like Shutterstock can be used for any purpose, so long as it's not used to promote illegal, pornographic, malicious, or defamatory material. So stock photography models never really know where they'll end up. They might be on a billboard in Slovenia or an Internet ad for a senior home in Kentucky. Sometimes this can lead to problems. Years ago, a government agency in Germany purchased one of Ark's photos and used it in a campaign for HIV awareness.

[Yuri Arkurz]

It was actually one of our skinnier models, one of our guys who just in one shot happened to look a little bit sickly, if you will, and then they photoshopped it a little bit and they made it look even worse. We have had many cases where models have come back and said, hey, what is this? I didn't agree to this. And then we have to chase down whoever did it and get them to take it down. And sometimes it requires lawyers letters. It's not the most pleasant side of the industry.

[Zachary Crockett]

In a few cases, RKZ photos have gone viral online. In 2009, he took a shot of a young woman with her head in the palm of her hand, smiling into the camera on Reddit. It became the template for Good Girl Gina, a meme often overlaid with text, about what a great girlfriend she is. The model who goes by Emma Catherine is now an Internet legend.

[Yuri Arkurz]

She got very famous from that one shot. So, yes, he's been very happy about it.

[Zachary Crockett]

The image has been used thousands of times, and almost none of those meme makers bought a license, which means that what they're doing could be a copyright violation. But RK says it's not worth the trouble of pursuing legal action with anonymous memers on the Internet.

[Yuri Arkurz]

You can forget about trying to monetize that. It's not going to happen. You're going to have to just laugh. But I kind of enjoy it, to be honest. I'll forfeit the royalties for the greater good of the meme world.

[Zachary Crockett]

Now, most stock photos don't get turned into memes, which means our curs has to do some work to get them noticed. When a buyer searches for, say, an image of a flower in a field, they'll find hundreds of thousands of options on Shutterstock or Adobe. One of the most important steps for a stock photographer is indexing each photo, adding keywords that give their work a better chance of showing up on the first few pages of search results. Arcurs employs a team of indexers. They attach extremely specific and sometimes abstract keywords to every image.

[Yuri Arkurz]

It's a very nerdy enterprise to be a keyword person. You've got to have this enormous, vast amount of common knowledge spelled perfectly, and then Know all kinds of strange words and weird things.

[Zachary Crockett]

What kind of weird keywords are we talking?

[Yuri Arkurz]

I mean, one picture can be of a certain flower taken in some weird place in the world, and now you have to download an app and scan that flower, find out what the real name is, where it is, and then suddenly you find yourself looking into botany for two hours. And then the next picture might be a rifle, a hunting chute. So now you have to dive into weapons and is it loaded or not? Magazines and distance and scopes and position they're sitting in. If you do common and really high ranking keywords all the time, you're not going to sell because you're competing against too many files. So the more specific your keywords are, you have a way better surfacing chance.

[Zachary Crockett]

Even with the best concepts, models and keywords, the business of stock photography is getting tougher. There are now websites that offer stock photos for free, and they're operating on an entirely different business model than sites like Shutterstock.

[Yuri Arkurz]

The business model is to disrupt enough and be enough, an annoyance that somebody's going to have to buy you out. What they're really good at is making two or three pages of content look nice, but the rest of the portfolio behind it is actually pretty junkish.

[Zachary Crockett]

More recently, stock photographers are under threat from machine learning. Technology Tools like Dall E and Midjourney allow users to type in a prompt and generate increasingly realistic images of any subject. Nvidia, OpenAI and Meta all have partnerships in place that allow them to use stock photo libraries to hone their machine learning capabilities or generate images. But at least for now, Arkurz still thinks that he and his human peers have the upper hand.

[Yuri Arkurz]

AI is definitely a big shakeup. Is it a threat for the industry? Yes and no. It is a lot easier still to buy on a stock site than to start writing prompts and getting something to really generate the shot you're after. You're looking at probably two, 300 generations to get one shot, and that's about two and a half hours of work to get to that. Let's say you want to change something. You know, I want this hand that's shown to the right side to just be a little bit more to the left with some copy space above it. You can write all the prompts in the world you want, but you are not going to get the AI to understand that. So these kind of smaller changes that a professional needs are very hard for an AI to execute. For now, it's just not refined enough to satisfy a really finicky art designer out there and we haven't gone down in income because of it.

[Zachary Crockett]

And there's one more thing that an algorithm cannot do. Partake in the joy of seeing its handiwork out in the wild.

[Yuri Arkurz]

I used to tell people I took that shot and they would just look at me like I was some kind of looney toonie. Like, okay, there's a screw loose here. It can be pretty hilarious sometimes.

[Zachary Crockett]

For the Economics of Everyday Things, I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz Rabson. Also, huge shout out to our listeners, Callie Kumnick and her boyfriend Dylan James. Callie made her own special episode of the Economics of Everyday Things and gave it to Dylan for his 24th birthday. If you've got something cool like this to share, or if you have a suggestion for an episode, feel free to email us at everydaythingsreakonomics.com all right, until next week.

[Yuri Arkurz]

Keywording yeah, if you've done that for three years, you are the person nobody wants to play against in Trivial Pursuit.

[Zachary Crockett]

The Freakonomics Radio Network the Hidden side of Everything Stitcher.

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