What Motivates Royalty Free Stock Video Footage Buyers?

Peter Sargent | April 10, 2007, 04:39 PM

As I have mentioned here before, stock video footage is simply a different animal from stock images. This also holds true when considering the differences between royalty free (RF) and rights managed (RM) for images versus footage. The cannibalizing effect that RF has had on the images market is tremendous. And while RF footage libraries continue to emerge, the effects on the footage market will be quite different. For one, it is critical that providers understand what motivates RF footage customers and how that differs from RM footage buyers.

First, the market understands it is more difficult to produce high quality clips and potential buyers are often wary of “cheap” footage that may reflect its sub par quality.

Second, agencies and other buyers may require some exclusivity over the footage they use. Advertisers hate to take chances with footage that could be used by others (particularly competitors).

Third, video is becoming increasingly standards-based, whether the footage ends up on TV or on the Web. If the Web is going to look more like the TV in the future, there must be standards in place to ensure a quality viewing experience.

And finally (and perhaps most interesting), many buyers of stock footage may even PREFER more expensive footage. Why? It’s all about pass-through. Some ad agencies make commissions on everything that passes through their hands. Investments in stock footage can fall under “Media expense,” which is simply passed on to the advertiser. Plus, the agencies can charge a 17.5% premium on the price of the footage. The end result - greater contract value and greater profits. Ultimately, more expensive rights managed (RM) footage works well for them.

So why should anyone be offering RF footage? Well, there are still the budget-conscious buyers out there. But, they aren’t necessarily working at larger, more traditional agencies. Instead, the market is sustained by smaller agencies, post-production houses, interactive agencies, and amateur users who aren’t in a position to command a 17.5% premium on everything they touch for their clients. So while the proliferation of RF images continues to cannibalize RM images, the same cannot be said for RF footage. The market must recognize both a distinctly different set of motivations for RF versus RM footage as well as a distinctly different set buyers.