Stock Photos: Royalty-Free or Rights-Managed and why you should know the difference!

I must admit that when I first became a freelance stock contributor, I was clueless about how licensing of stock images works. Granted it’s not the most sexy of subjects, but spending some time understanding how stock photography licensing works, even at a basic level, will both allow you to earn more money and potentially keep you out of a lot of trouble.

High Court, London
The goal is to keep you out of here!

As the stock photography industry has evolved, different licensing models have emerged. Two main types of licenses are used in stock photography include:

  • Royalty Free (RF);
  • Rights Managed (RM).

Let’s deal with each one at a time.

Royalty-Free License

RF licensing is the ‘bread and butter’ of the Microstock industry and  most customers’ preferred option. Without getting too technical, a RF licensing agreement is when a relatively low one-time licensing fee or long-term subscription plan is paid to the Agency by the customer. In return, the customer has a wide range of uses for that image, perpetually (meaning that such uses don’t expire).

The basic RF usage would allow the customer to use the image on a website’s landing page and/or blog post and/or physical book (<500k ‘physical reproductions’), etc. with no need to renegotiate a new license each time. However, if the customer has greater marketing plans and wishes to use an image for merchandising for sale or 500k+ ‘physical reproductions’, for example, he/she would need to purchase an extended license at an additional premium. So far so good.

Rights-Managed License

RM licenses are the tailor-made option for the client and thus generally more expensive. If you want a tailor-made suit, you’re gonna have to pay more for it than one that’s off the shelf.

Under this licensing model, the image is licensed for a ‘single use’. Agencies offering this model use a complex formula to determine the price, depending on the customer’s intended use. For example:

  • Use on billboards is more expensive than in books;
  • Commercial use, such as advertising, is more expensive than editorial;
  • Size of the print run, e.g. the number of newspapers or brochures;
  • Position within the publication – use on the cover of a book would cost more than an image inside a magazine;
  • Size of the image, meaning that a double paged spread would cost more than a quarter page;
  • Duration of usage, e.g. a licence for a long-running exhibition would be more expensive;
  • Exclusivity option (not available under RF);
  • Territory – worldwide would cost more than locally or nationally.

This is the preferred option for a publisher, for example, that wishes to license an image exclusively (for a defined period) to use in a thriller book cover which will go out worldwide in millions of copy. No way in hell does the client want a similar image going viral or worse, being used on a cover of a competitors’ book.

man on bench
This would make for a nice book cover, in my opinion, and a client may wish to protect such image from competitors by purchasing a RM license under an exclusive-use basis

After the use, if the client wants to re-use the image for the same purpose or a different purpose, he/she would need to renegotiate such licence, thus earning the contributor another dose of royalties.

Selecting either RF or RM

Most Microstock site, by default, only allow contributors to license their images as RF. However, as your photographic skills progress and the quality of your images inevitable improves, you may consider licensing your more ‘premium’ images as RM at sites which allow you to  make that choice. These include most ‘Midstock’ sites. Just remember that if you do decide to license to multiple agencies, to maintain the license type consistent throughout to avoid any legal issues.

I’ve tried to be as brief and less technical as possible in the above. For much more information on RF/RM pros and cons, purchase a copy of the Brutally Honest Guide to Microstock Photography, so purchase a copy today!

Also available on kindle:

Until next time!

Alex

10 comments

  1. […] Now for the juicy bit where I give you some advice. In my book, I go into great lengths to outline which types of images should not be licensed at Microstock sites where customers may license them under subscription plans. Once the quality of your images improves, I would highly recommend that these ‘premium’ images should be licensed as Rights-Managed at Midstock agencies to earn higher commissions. […]

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  2. […] From the perspective of buyers, the success of Microstock can be attributed to the stress-free Royalty-Free model, where relatively few restrictions are placed on the (re)usage of images. This is in contrast with the traditional Rights-Managed model where usage is strictly controlled, at least in theory. I wrote an article about this a few weeks ago – available here. […]

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