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Earlier than the internet (and up till mid-Nineties), distribution of pictures to consumers was difficult. Smaller stock agencies that couldn’t sell some supply of pictures began selling them to OTHER stock companies with better distribution channels (normally, the early web adopters). As a result of these pictures have been often lower quality, the priority was that these photographs won’t promote. To ensure that the deal to make financial sense for all parties, the photographer was paid a one-time royalty for the transaction, the primary agency got a single, lump-sum fee from the secondary agency, and that second agency was now on the hook to make some money. Typically they did, however typically they didn’t. But they may only conform to take this danger so long as they were not obligated to pay royalties again to the photographer. These were royalty-free photographs.
