First, a look at what the Evans-Lombe’s letter clarifies:

Boiled down to its essentials, the letter offers the following rationale for the $49 across-the-board web-use price:  On-line use of images is growing exponentially, but traditionally licensed imagery is missing out on the action because it’s too expensive and the licensing process too complicated for the typical on-line-use customer.  Getty came up with the $49 product to allow the rest of their collections to get in the game.

I find this reasoning fair within the context of the existing sales patterns Evans-Lombe cites.  As evidence of the rapid growth in demand for screen-resolution images, Evans-Lombe refers to iStockphoto’s 4.25MM downloads in the second quarter, most of which were for the lowest size, implying on-line usage.  One might raise the question whether the $49 price will result in enough increased volume to compensate for this relatively low price.  The photographer groups argue that Getty is undermining on-line usage fees exceeding $600 per image at RM pricing.  If what Evans-Lombe says about very few RM and RR images being purchased for on-line use is true, however, those $600 licenses are so few and far between that Getty and its photographers really have little existing revenue to lose by giving this product a try.

The fact that the file size is so small – less than half the size of the previously available smallest file size, Evans-Lombe points out – lends further validity to the argument that the new product won’t cannibalize existing sales.

Nonetheless, the new product raises troublesome questions for Getty as a company and fails to assuage several of the photographer associations’ gravest concerns.

Evans-Lombe uses the term “appropriate” when referring to price, more than once in his letter.  He does not explain how the company determined $49 to be “appropriate.”  Why not $59 or $99 or some other price?  We can only assume that Getty chose this price after much consideration and study of the market. At $49, we question whether the product creates much in the way of “up-selling” potential to the $1 micro-stock buyers.  The one is still forty-nine times more expensive than the other.  For most on-line uses where, as Evans-Lombe says, “… the volumes are very high and customers are frequently updating their communications on a daily basis…,” we suspect that’s a lot more than they’re willing to pay.  Though Evans-Lombe says nothing directly about up-selling to micro-stock customers, his reference to the huge volume of downloads on iStock shows Getty is looking hard at that group of customers.  Regarding the price, then, while Getty seems to be looking to bring low-budget buyers up to $49, it’s critics worry they may bring potentially higher-budget buyers down to $49.

How the company addressed the price level issue poses the same problem as how they addressed the complication issue by establishing a single price for on-line use.  One wonders whether they have sacrificed higher potential revenue for more simplicity than is necessary.  Might they have accomplished the same end while still charging higher fees for usage on sites with higher numbers of visitors, at least for images in the RM and RR collections?  Any web-site publisher worth his weight in salt is acutely aware of how many visitors come to his site each week or month.  A simple tiered pricing model based on traffic with radio buttons allowing the buyer to choose a license for sites with, for example, up to 100K visitors per month, over 100K and less than 500K, and over 500K, or some such stepped pricing, would solve the complication issue and still allow for value-related pricing.  (Such price options could function on the web-site much like single image RF pricing. And we know clients have no problem whatsoever with the simple RF pricing model.)  With this single-price product for RM and RR collections, Getty implies that all on-line uses are created equal which we know they are not.  The company may have missed a greater long-term opportunity in its haste to take advantage of an immediate one.

On this point, Getty has made one concession to the protesting photographer groups: it has set a time limit of three months on the $49 product for images from its RM and RR collections.  The comment quoted above, however, about the on-line users frequently updating their communications on a daily basis, diminishes the significance of that adjustment.

Of greater concern is the over-all long-term effect this product will have on how clients perceive the value of stock photography in general.  Micro-stock may have already started a devaluation of stock imagery in the minds of customers.  If what Getty says about more and more imagery use moving on-line is true – and I don’t doubt it – then they may have hurt their own future revenue potential from this product with such a low price.  They may have done damage in a more general way to themselves and the industry at large, as well.  Leading clients to believe that a great image used on a web-site with 1MM visitors per month has less value than a great image used in a brochure with a print run of 5K can only erode the perceived value of stock imagery over-all.  The question then becomes, will volume increase enough to compensate for the decrease in per-unit value?  Getty seems to be betting it will. For the sake of Getty’s photographers and for the health of the industry in general, I hope they’re right.