iStockphoto.com is a Royalty Free stock photo site.  It does not sell imagery Rights Managed.  You may have heard these terms before, but what do they mean, and what is the difference between the two?

To start, they both refer to licensing agreements.  When you purchase an image at iStockphoto, what you are actually buying is a license that gives you certain rights to use a specific piece of content, here a digital image, movie clip, flash composition or audio clip.  The license gives certain rights to you, the buyer, and withholds certain rights, some of which can be purchased with an extended license.  You may think of the iStockphoto license as Royalty Free with a touch of Rights Managed built in.

I recently update some online documentation about these licenses, and I’m going to include that text here.

Royalty Free

Royalty Free refers to a type of contract between a two entities (the licensor and licensee), that is employed when licensing the rights to use content, such as photographs. The term Royalty Free means that that once the content is licensed under a set of guidelines, the licensee is normally free to use it in perpetuity without paying additional royalty charges.

The Royalty Free license contrasts with the Rights Managed license, wherein the buyer usually receives the right to use the content in very specific ways, with restrictions placed on things like period of time used, geographic region, industry, size published, etc. Rights Managed because the licensor is specifically managing the publishing rights for the content.

For an image that has been licensed as Royalty Free, the licensor is unable to provide a history of usage to a prospective licensee. This may negatively affect the licensee, because they cannot be assured specific content is not being used in a certain geographical region by a competitor, for example. There are examples of the same Royalty Free content being used in large promotional advertising campaigns by competitors, one notable such incident involves EverywhereGirl.

The concept of Royalty Free comes from copyright, a statute that allows authors and publishers of works to be the sole arbiter of the exploitation of that work, and to set fees associated with that work. The economic incentives afforded by copyright give artists one way to make a living through their creative works.

Typically, the royalty charged for content under a Royalty Free license is based on the physical attributes of the content. For example, the larger pixel size of a digital image, the larger the fee, since the licensee gains more benefit from an image with more resolution. The typical charge for an image that reproduces well at a two page magazine spread size may incur a charge of up to $500, wheras a blog-sized image may run much less. Likewise, a longer piece of music, or a more complex Flash work could command higher prices.

Royalty Free does not mean a user is free to take and use whatever content they find available to them. It only refers to a specific licensing contract between two entities. The licensor, usually the content creator, always retains all copyright to the content, including the ability to distribute it, or allow redistribution. Each licensing contract is different. Some may allow reselling of items that include that content, such as a t-shirt or calendar with an image, and others do not. The terms of the license should be researched, to be assured if the license includes the rights desired by the licensee.

Rights Managed

Rights Managed refers to a type of contract between a two entities (the licensor and licensee), that is employed when licensing the rights to use content, such as photographs. The term Rights Managed means that the seller of the license is specifically giving permission to the buyer to use the content in a certain way. This typically includes restrictions on the length of time, the medium, the size, the format and the location the content can be used (in). The more flexible, or beneficial rights one purchases, the more expensive the license.

The Rights Managed license contrasts with the royalty-free license, wherein the buyer usually receives the right to use the content in perpetuity, with much more flexible restrictions. Royalty Free because they normally do not need to come back to pay more royalties for additional rights for other uses.

Typically, for an image that has always been licensed as Rights Managed, the licensor is able to provide a history of usage to a prospective licensee. This can benefit the licensee, because they can be assured specific content is not being used in a certain geographical region by a competitor, for example. The history can also provide the licensor with the opportunity to make additional income from offering the licensee an option such as exclusivity within a specific region or industry. If the image does not have a recorded history (it may have initially been sold Royalty Free, for example), the licensor would not be able to provide such an opportunity. Again, the Rights Managed license is merely a set of restrictions placed on the content’s use. At its base, it is not a guarantee of exclusivity in any sense.

The concept of Rights Managed comes from copyright, a statute that allows authors and publishers of works to be the sole arbiter of the exploitation of that work, and to set fees associated with that work. The economic incentives afforded by copyright give artists one way to make a living through their creative works.

An example of how Rights Managed works benefit you and the content’s publisher might be that you simply have a local business’ newsletter which is printed monthly, and which prints 400 copies. A fee for this small use might be $100, because the benefit the business receives from the use is small, so the fee is comparable. This same image, used editorially in a national publication, reaching 15 million people might have a fee of between $500 and $1000, for the same image. The concept here is that when the benefit to the organization increases, so too does the fee paid to the publisher.

Some standards exist for the royalty charges for the various restrictions. Fotoquote is a piece of software that can provide sample royalty charges for photography content based on any number of category restrictions.

3 Responses to RM vs. RF

  1. […] Source and Read More: seanlockephotography.com […]

  2. […] in the way you can use an image.  “Widely differing prices” means anything from an Royalty Free image you purchase for 1 credit (around $1) at iStockphoto.com, to an image you license from […]

  3. […] content with under a Royalty Free license.  This is in contrast to a Rights Managed license.  I wrote about the difference a while back, but essentially, they are general industry recognized categories for how someone pays […]

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