In a rather swift move, 500px has announced a drastic change in their licensing and royalty payouts of their ‘Marketplace' (formerly ‘Prime'). The cut is more than half from 70 to 30 per cent of the licensing fees, at least for non-exclusive images.
Thr 500px Email contains lots of details and a two weeks notice
As was stated in the email, 500px has learned a lot from licensing images for the last two years. As our partner site StockPhotoSecrets had presented back then, the 500px Prime market was planned to be a premium market with prices starting at $250 and royalties paid to contributors a market leading 70%. Well, even back then this came as a turn of events after the original announcement of the Prime market was proposing a 30% royalty rate which was heavily criticized by professional photographers like in this article at Fstoppers.
In a few steps in between, 500px has gone through some changes in those two years: Besides the “starting at $250” licensing, a web size resolution version of images was added to target the smaller buyers and better compete with comparable offers like Stocksy United or Offset. In a rebranding, ‘Prime' was renamed ‘Marketplace'. And the collection was split into a “Core Collection” and the “Prime Collection”, at the same time reducing the prices of the ‘Core' images.
So this new announcement isn't the first step but most definitely the steepest one, both on the contributor and on the customers side:
As can be seen from the chart, after the several steps of price reductions, 500px now changes the standard license to allow less uses and sell Extended License Add-ons instead, as it is well known from microstock agencies. The prices of Extended License range from $99 for a Multi-Seat use to $499 for Items for Resale. It also includes an “Extended Legal Warranty” as only known from iStock in the past. Kelly Thompson was recently hired to lead the 500px Marketplace as a VP for the company and was formerly the COO of iStock during the first wave of changes there. Coincidence?
What are the consequences for contributors?
As can be seen from the new price and royalty chart, the change will be massive especially for the non-exclusive images submitted to 500px Marketplace – the royalties will go down from 70 to 30 per cent across the board. Basically the payment is cut in half, after the average royalty paid was already reduced through the price reductions last year.
For exclusive images, the royalty rates still seem a viable option: 60% of all standard licenses sold but a reduced 40% for Extended Licenses. It could be argued that Extended Licenses typically require a higher administration for the company as those usually are the customers needing individual solutions, so there might be some justification in this.
The new offer might still be attractive for the advanced travel and landscape photographers that seemingly have dominated 500px from the start as a community through their Prime and Marketplace. As can be seen from the 10 Best Selling Images in 2015 in their blog (and their stunning selection here in our photography trends article), 8 of the top 10 images fit these categories. Only the top two images are “young business” images – remarkably both of them were shot by photographers involved in the 500px business as Founder and Curator, respectively.
In the travel and landscape area, photographers were significantly struggling over the past few years with the enormous competition arising in these areas in the mass market agencies like Shutterstock or iStock. For those photographers, submitting exclusive images to 500px at the higher royalty rate could indeed still be the better choice than submitting to microstock. But we don't see how business or lifestyle photographers who are still in high demand and have no problems getting contracts with higher royalty rates than 30 per cent could justify the decision to submit their images under the new terms.
Some Contributors are….. “unhappy”
We are looking forward to find out how this is going to play out. As some contributors have announced their account closures, it is hard to get measurable data if there is any impact on the overall volume of images available through the market. How do you see the situation? Will you stay with 500px?