Microstock photography, also known as micropayment photography, is a part of the stock photography industry. What defines a company as a microstock photography company is that they (1) source their images almost exclusively via the Internet, (2) do so from a wider range of photographers than the traditional stock agencies (including a willingness to accept images from "amateurs" and hobbyists), and (3) sell their images at a very low rate (anywhere from $.20 to $10) for a royalty-free (RF) image.
The pioneer of microstock photography was Bruce Livingstone, who created iStockphoto, originally a free stock photo site that quickly became an industry phenomenon. Livingstone sold iStockphoto to Getty Images in February 2006 for $50 million US dollars. Many other sites sprang up in the years after iStockphoto's inception. Some of the larger ones are Dreamstime, Fotolia, 123RF.com and Shutterstock, founded in 2003 by entrepreneur Jon Oringer.
After a few years of initial growth, the microstock industry began a period of mergers and acquisitions. The acquisition of iStockphoto by Getty Images in 2006 was followed by acquisition of StockXpert by Jupiterimages during 2006. Consequently Jupiterimages was bought by Getty Images in 2009 which resulted closure of StockXpert in 2010 because of being non-strategic for Getty compared to iStockphoto. BigStockPhoto was purchased by Shutterstock in 2009.
Starting from limited RF license all agencies added various Extended Licenses; sites based on "pay per download" principle introduced subscription and vice versa Shutterstock which was the only 100% subscription-based microstock agency introduced a pay-per-download scheme and later acquired BigStockPhoto to extend their presence in pay-per-download niche. Newcomer Cutcaster.com extended the pricing model by introducing a model where contributors could set their start price or could choose to use a pricing algorithm and they allowed a buyer to pay the price shown or bid on the content and name their price. Microstock prices were significantly adjusted several times by the respective agencies in the last 3 years across multiple sites. Many microstock agencies started to sell video in addition to static pictures; and some started to sell sound clips.
2011 marked the first signs microstock photographers becoming a field of professionals. Photographers with large, market-relevant, or high-quality portfolios now often collaborate with each other and negotiate with less-established agencies for better commissions or search positioning, and the increasing popularity among photographers of photography portfolio management solutions to increase their throughput and improve metadata quality to better align with principles of SEO in image search algorithms.
Practices and controversy 
Each microstock agency uses a different pricing and payment scheme. In some instances the same photo can have several prices. Photographers can upload the same pictures on multiple sites or, with some agencies, become an exclusive supplier and receive an increased commission and additional benefits.
There is no fee to post photos on a microstock agency website. However, microstock agencies do not accept all submitters or all photographs. Each employs a team of reviewers who check every picture submitted for legal issues and technical quality, as well as artistic and commercial merit. Photographers add keywords that help potential buyers filter and find pictures of interest.
Some professional photographers who do not participate believe that microstock devalues the practice of photography, and that the business model is unsustainable. They see the growth of microstock sites as reducing their own incomes.
- Stephen Shankland, "With site revamp, Fotolia adds vector art", ZDNet News, June 1, 2007
- "Jupiterimages acquires Stockxpert.com and Stock.xchng
- "Jupitermedia Announces Completion Of Sale Of Jupiterimages To Getty Images and Change Of Jupitermedia Name to WebMediaBrands". Getty Images. 2009-02-23. Retrieved 2009-08-13.
- "Shutterstock Announces Closing of Initial Public Offering and Exercise of Underwriters' Option to Purchase Additional Shares". Shutterstock. 2012-10-16. Retrieved 2013-01-18.
- Eric A. Taub, "When Are Photos Like Penny Stocks? When They Sell", New York Times, June 5, 2007
- Robert Levine, "Photo wars: A $2 billion business gets rough", Business 2.0 magazine, April 2, 2007