Stock photography is basically images taken "on spec". This means the photographer takes pics of various objects, people, or situations, & sells them after the pics have been taken. They are not on a specific photography task, in lieu they are taking images of subjects they'd like to take pics of.
Stock images are primarily used in printed commercials, brochures, magazines, & sites, though there's lots of other ways stock pics can be used.
Stock photography is licensed in several different ways. The two most popular are Rights Managed, & Royalty Free Stock Photography.
Rights Managed photography is the use of stock images that are licensed for a specific, limited time & purpose. If an advertiser for example, needed a stock photograph for one specific commercial campaign, they could license a photograph for that specific use. & they'd be limited to using the photograph only for that campaign. They'd even be charged based on the size of the commercial campaign they intended to make use of the stock photograph for.
In the event that they desired to make use of the same photograph again, they'd must pay another fee. & that fee might be different, if the campaign use & sizes are different. These recurring fees are called royalties, & with rights managed stock photography they can be hefty. Ranging from hundreds to thousands of dollars for the limited use of one photograph.
Royalty free stock photography lets you pay a license fee two times, then use the photograph multiple times. There's usually limitations on this sort of stock photography, however the restrictions are not very as narrow as rights managed photography is. A designer or advertiser could license one photograph for example, & use it in hundreds of different commercial campaigns, without incurring additional fees. In other words: No royalty fees require to be paid.
Usually royalty free stock images can be licensed for as little as $50 up to several hundred dollars depending on the licensing source & rights given.
One of the most popular forms of photography for little & web based businesses, is royalty free micro stock photography. This is a variation on the royalty free model, but it is known as "micro stock" because designers & advertisers pay a dollar or two per picture license.
This type of stock photography has become popular with web-site owners , because it is a very cheap way to get top quality images for use on their sites. Quality stock images can be licensed for as little as $1 in smaller, web friendly sizes. & prices go up to about $3 or $5 for larger, print quality photograph sizes.
Since these images are royalty free, designers can use them multiple times for that two times low cost. Be sure to check the licensing restrictions though. Royalty free does not automatically mean "public domain" or "copyright free", & each micro stock photography site has their own particular use restrictions on the images you license.