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There are countless website articles and discussions in various forums which detail the pros and cons of RAW VS JPEG in far more depth than I will go into here. This page merely outlines what RAW is to the beginner, explaining why it is better, and why RAW is not a 'necessary' element of microstock photography today.
RAW is simply a mode in which photographs can be taken. File sizes are larger than JPEG's, image compression is 'lossless' (meaning no detail is lost through compression) and additional software is required for processing. There is no debate as to whether RAW is better (it is) but people do often debate whether or not one should be shooting in RAW. In the end it boils down to preference.
When submitting photos to the microstock photography sites, a small amount of compression IS acceptable, as images dont need to be submitted in a lossless format (ie TIFF). All microstock sites require photographers to submit photos as JPEGs, saved at the highset quality setting of course, which is 12 in Photoshop.
From a digital photographers perspective, the greatest benefit in shooting RAW is that you have a greater ability to manipulate your stock photos after they have been taken, and the majority of photographers prefer RAW for this reason.
The photo below was taken in JPEG mode. The crop on the left is how the JPEG looked, taken straight from the camera. The greener more vibrant crop on the right is how the photo looked after processing. When photos are manipulated or enhanced, extra noise is created. In microstock photography, noise is bad news!

By enhancing the photo on the right a great deal of extra noise was created and this noise was clearly visible when the photo was viewed at 100%. Too much noise means your photos will be rejected by the microstock photography sites. So, I used a photoshop plugin called Noise Ninja which removed the excess noise.
The advantage of shooting in RAW, is that RAW files can be enhanced more than JPEGs. The JPEG above (right) could not have been enhanced much more than it was (without creating crazy levels of noise!) With a RAW file I could have have made the beans far greener! I didnt need to though. When shooting in controlled studio conditions, a JPEG can usually be 'enhanced enough' afterwards.
RAW gives the photographer about 2 stops of extra control. Whilst nothing beats taking the photo correctly in the first place, there will be times when a RAW file will enable you to correct an incorrectly exposed photo, which may have been unrecoverable if it had been shot as a JPEG. If you shoot outdoors, or in situations where the light is constantly changing and the consistency of your photos is reduced, then RAW may be the best choice for you.
JPEG (quality setting 12) really isn't as bad as some people make it out to be! You may find that the size of your JPEG files will grow, after resaving your photos in photoshop. This is because JPEG setting 12 in photoshop contains nearly no data loss at all, and images saved at this setting can almost be compared to a RAW file, regarding the 'virtually lossless' data preservation. Only you can decide for yourself whether or not you need to shoot in RAW mode. Either way, you should be using a noise removal tool. Its not that the microstock photogaphy sites prefer 'low noise' - they prefer 'no noise!'
Im summary, perfectly adequate results can be achieved by shooting in JPEG mode. My photos aren't perfect, but every photo on this site was shot as a JPEG, and shooting in studio conditions I have no problem working with JPEG's.
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