AGS3 Executive Summary
ACSIL Global Survey of Stock Footage Companies 3
The trade association ACSIL, which represents the commercial interests of companies who market and sell stock/archival footage to media entities, corporations, educational entities and other licensees of intellectual property rights, has conducted its third survey of the global footage industry. This ACSIL GLOBAL SURVEY (known here as the AGS3) utilizes data that was collected in the 4th quarter of 2014. With participation of 90 companies (our sample group), we used a two-parameter Weibell distribution model to estimate the likely global business at $552MM/year, up nearly 40% from the 2011 estimate of $394MM/year. While the footage business is still significantly lower in size than the $2BN/year stock photography business, it is growing at a more accelerated rate.
New players with inventive on-line digital distribution and transactional technologies entered the footage business over the past decade or so, and these companies (e.g., Shutterstock, Pond5) have effectively challenged the operational and pricing policies of footage sellers. They are now among the global leaders in revenue capture. The success of these technology-driven companies (as opposed to content-driven companies) has put downward pressure on the pricing policies of footage licensors, although it is interesting to note that even those entities that use pricing as a competitive advantage consider the downward pricing trend to be the most significant threat facing the industry. On the other hand, the overall demand for footage is as high as it has ever been, and the great majority of companies report either sustained or increased annual revenue; only 20% of the respondents reported revenue decreases and only 4% believe the footage industry is in decline. Clearly, the growing customer base is starting to overwhelm the resources of the footage companies, as over 50% of the respondents said they did not have sufficient headcount to handle their current workload.
The Top 10 earners now represent approximately 50% of footage revenue overall, and the AGS3 has tracked the responses from the Top 10 earners as a comparative to the overall sampling group of the AGS3. This provides a dedicated window into the operations, strategies, and expectations of the most successful footage companies today. For example, 67% of the total respondents reported that, while successful today, they were uncertain about the industry’s future, whereas 60% of the Top 10 Companies said the “industry is in solid shape and its long-term prospects are favorable.” Clearly, the more successful companies are bullish on the upsides of the footage trade.
ACSIL now has data from three global surveys: 2007, 2011, and 2015. Industry trends have been charted and tell the story of the footage industry’s transition from analog to digital, and it also tells the story of how the footage business responded to the recession of the late 2000s and how it rebuilt its operations thereafter. Headcount is a good illustration of the change, as the average amount of full-time employees see-sawed from 15 heads in 2007 to 8 heads in 2011 to 20 heads in 2015. Although the industry has returned to its 2007 employee levels, they are very different kinds of employees: for every two researchers in 2007, there is only one researcher in 2015, but there are more heads in business development and marketing than there were in 2007. Indeed, the move to push research to the customer has been a dramatic component of the most successful companies: 60% of the Top 10 have reported that their customers do all of their research and screening on-line, whereas only 20% of the total sampling group have done so. Not surprisingly the Top 10 also rate online research and screening capabilities as the most important factor that differentiates their footage company.
Television remains the most important market for both the Top 10 and the full sample group, and it is also the market with the most increases in sales activity. Other growing markets include theatrical, advertising, corporate non-broadcast, and Internet video. The Top 10 are mostly alone in reporting high growth in mobile, apps and out-of-home displays. Reporting on activities in different content categories is basically the same for the Top 10 as it is for the full sample group: there is a growing demand for contemporary stock footage and archival/historical footage, and other categories show small increases or no increases. Only the natural history content category showed declines in value: on a scale of 1-5, with 5 being the highest rating, natural history dropped from 3 in 2007 to 2.5 in 2011 to 2.1 in 2015. While dropping, it is still considered more valuable than news footage, which has remained at 1.9 in all three surveys.
Overall activity at the Top 10 Companies is up dramatically: 50% of the Top 10 Companies report over 100,000 web visits per month (vs. 8% for the sample group) and 80% of the Top 10 Companies are processing over 100 final footage orders per week (the highest category in the multiple choice question), whereas 47% of the sample group process the minimum of 1-10 final orders per week. While the Top 10 dominate in overall licensing revenue, the great majority of the respondents are also reporting increases in the critical performance metrics. While the big are getting bigger, the smaller are getting bigger, too.
Footage business units within larger media enterprises are losing the pole position among footage licensors. Representing 27% of respondents in 2007, their percentage (but not necessarily their total number) has dropped to 19% in the AGS3. The percentage drop is attributable to the overall increase in the amount of non-media companies entering the footage trade: technology and VC-backed start ups that are recognizing aggregation opportunities that exploit the new, vast supply of footage being generated by a wide universe of HD digital shooters.
Downward pricing and decreasing production budgets are cited as the most serious threats to the respondents, whereas piracy and “fair use” rights to use footage for free are the least noted of the threats. When asked in a free-form question what industry changes were being tracked by respondents, the most frequent response was “the democratization” of footage, noted by 27% of the respondents. Others anticipated changes coming from royalty free (14%), from direct to consumer initiatives such as ad-supported YouTube and Google sites (14%) and from 4K and super high definition formats (13%).
The AGS3, combined with the data from our surveys in 2007 and 2011, provides an important record of the industry migration to digital work processes and aggregated sales efforts. This is the most optimistic of the surveys to date, and may indicate that the “era of footage,” which has been predicted for at least a decade may be nearing. As this survey focuses entirely on footage sales at companies with dedicated units for the marketing and servicing of footage licenses, there are indications that the value of footage is increasing in ways that are not captured by this report. We are incubating research studies that examine new efforts to deliver footage directly to consumers and students and are also tracking a growing activity in footage-based programming in all media sectors. The ubiquity of video made possible now through easily accessible digital video production and distribution tools is transforming the business in ways that are not yet decipherable, but will be on display in the AGS4. That work begins now.