Can iStock Turn Midstock Sales Around?

[luissantos84]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

even that (which is a ton more than all stock agencies, talking about the ones with buyers) would still get us a few dollars and millions for him, its just a big business with tons of buyers and contributors

Jon will always be a Silicon Valley billionaire and we his little contributors, that will never change

[ethan]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

even that (which is a ton more than all stock agencies, talking about the ones with buyers) would still get us a few dollars and millions for him, its just a big business with tons of buyers and contributors

Jon will always be a Silicon Valley billionaire and we his little contributors, that will never change

I think it's Silicon Alley billionaire

'Valley' pertains to the Hayward, California area and surrounding areas in San Francisco, CA.

'Alley' pertains to New York.

[luissantos84]

correct ethan, cheers!

[cthoman]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

Actually, he might be poor if he paid us that much because the company wouldn't be making a profit. They could always raise prices though. I guess that is a question to ask yourself. If a company can't afford to pay you 50% with their expenses, are they charging enough to their customers.

[Shelma1]

I would guess, based on their history, that they tested different price points until they found the one that gave them the best returns. If you price too high you might lose customers, too low and you don't make enough profit.

[cthoman]

I would guess, based on their history, that they tested different price points until they found the one that gave them the best returns. If you price too high you might lose customers, too low and you don't make enough profit.

I'm not sure if I believe that based on what the micro landscape looks like, but it could be.

[gbalex]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

Actually, he might be poor if he paid us that much because the company wouldn't be making a profit. They could always raise prices though. I guess that is a question to ask yourself. If a company can't afford to pay you 50% with their expenses, are they charging enough to their customers.

They have publicly admitted that they have room to raise prices and have chosen not to do so, with the business objective of gaining market share.

This move affects its contributors livelyhoods because out expenses increase each and every year.

[gbalex]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

even that (which is a ton more than all stock agencies, talking about the ones with buyers) would still get us a few dollars and millions for him, its just a big business with tons of buyers and contributors

Jon will always be a Silicon Valley billionaire and we his little contributors, that will never change

Bruce has stated publicly that 50% is fair, he is one of the few people who has the data to determine a fair rate. 

I grew up in a company with a philosophy similar to Costco's thou they paid at a much higher scale. They believed that for a company to be truly successful you had to take good care of the people who powered it on a daily basis. That philosophy paid off. The company was merit shop or non union in a largely union industry. In its' 60 year history its employees never once considered unionizing because there they were taken care of and there was no need to organize. They did have much higher productivity levels compared to their unionized competitors and they took care of the companies interests because they cared about a company who cared about them.

In the end the above company is a Fortune 200 company with revenues of 3 Billion per year. The owner would be the first to tell you he did not accomplish this alone and you would be surprised to see how little he took from the company because he knew that his own success was tied to making sure his employees prospered.

You can see this same philosophy played out to a lesser degree between Costco and Walmart

Costco Shows You Can Have Low Prices and Decent Pay
http://www.moneytalksnews.com/2013/06/10/costco-shows-you-can-have-both-low-prices-and-decent-pay/#eDKpZVXml7QcYvfq.99

Costco strongly believes in investing in its employees. The average pay at Costco is $20.89 an hour, compared with $12.67 an hour at Walmart, Businessweek says.

At Costco, 88 percent of employees have company-sponsored health insurance, Businessweek adds. Walmart says �more than half� of its do.

Then there�s how much their CEOs make. Last year, Costco�s CEO got:

    a $650,000 salary.
    A $200,000 bonus.
    $4 million in stock options.

In contrast, Walmart�s CEO got:

    a $1.3 million salary.
    a $4.4 million bonus.
    $13.6 million in stock options.

Since 2009, Costco�s stock price has doubled and its sales have grown 39 percent. While some chains are being undercut by Amazon, Costco isn�t. During the recession, while retail rivals were cutting jobs, the company gave its employees a $1.50 raise that cost nearly $20 million, Businessweek says.

Snip

On Thursday Costco reported earnings of $473 million, or $1.07 per share, on revenue of $25.23 billion.

[gbalex]

I would guess, based on their history, that they tested different price points until they found the one that gave them the best returns. If you price too high you might lose customers, too low and you don't make enough profit.

As you know I have posted this many times and yet most ignore the facts.

Shutterstock has clearly stated that they know they could raise prices and they have chosen not to with the objective of keeping them low to gain market share.

Snip

Duck Swartz

Talking about your present strategy longer term?

Timothy E. Bixby - CFO

We think we can raise the prices over the long term but we�re primary in the growth mode right now and we would like to continue to cover as much of the world as possible and take as much as growth in the business that we can before we play with the pricing level.

We haven�t raised prices in many years and then been a great strategy so far to grow.

Snip
Jonathan Oringer - Founder, CEO & Chairman of the Board

It still multiples. So it's order of magnitude whether it's if you look at us compared to other stock marketplaces like an iStock or others, it's two or three or four times more expensive to not use Shutterstock. If you look at the higher end sort of more traditional marketed might be 6 or 8 or 10 times more expensive.

http://tinyurl.com/m6rlaq2

[Shelma1]

I would guess, based on their history, that they tested different price points until they found the one that gave them the best returns. If you price too high you might lose customers, too low and you don't make enough profit.

I'm not sure if I believe that based on what the micro landscape looks like, but it could be.

Just a guess. They seem to take a considered approach, testing things in spot markets before they roll them out. We do the same thing in advertising. Price tests are pretty common to determine best ROI.

[Shelma1]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

Actually, he might be poor if he paid us that much because the company wouldn't be making a profit. They could always raise prices though. I guess that is a question to ask yourself. If a company can't afford to pay you 50% with their expenses, are they charging enough to their customers.

They have publicly admitted that they have room to raise prices and have chosen not to do so, with the business objective of gaining market share.

This move affects its contributors livelyhoods because out expenses increase each and every year.

You could argue that it affects contributors' livelihoods by increasing their overall earnings because the company is growing, meaning more downloads. Perhaps that's why they're at the top of the earnings poll over to the right. Who knows?

[pancaketom]

Yes, SS and all the others also consider market share when they decide on pricing - which is a moot point to most contributors because they sell most everywhere.

[Mantis]

Yes, SS and all the others also consider market share when they decide on pricing - which is a moot point to most contributors because they sell most everywhere.

Jon has stated that he doesn't see a point in image exclusivity but it would sure make things interesting if they started with it - it would also give more power to the photographer as we could more easily boycott other sites and still retain our income (if the exclusive deal made sense).  It could make the agencies start to compete for the artists attention - wouldn't that be nice!

Jon made that comment awhile ago, kinda like when Bill Gates said we would never need more that 640k of memory.  Things change. Perhaps he is starting to "evolve". I can't personally see agencies surviving with any degree of profitability if something other than pricing doesn't change. I think image exclusivity will be the next big thing, and sooner than later.

[pancaketom]

I think agencies (the big ones) can have plenty of profitability with 70 to 85 and more percent of each sale.

[gbalex]

I think agencies (the big ones) can have plenty of profitability with 70 to 85 and more percent of each sale.

Even the smaller sites seem to be sticking around, thus they must also be profitable.

We can see from shutterstocks balance sheet that even with the high rents they are paying at some of the most expensive real estate in the world they are quite profitable.

So much so that they can afford to stiff contributors by not raising prices since 2008, they are so profitable they chose to keep pricing stagnant for many years so that they can low ball competitors to gain a majority of market share.

Now it is a simple fact that if they cared about contributors they would raise prices, they know full well that the market is not going anywhere and that it can bear modest increases.

Since it is clear these sites do not care about their contributors, it is time for us to care about ourselves and take steps to protect our interests.

[aldomurillo]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

Actually, he might be poor if he paid us that much because the company wouldn't be making a profit. They could always raise prices though. I guess that is a question to ask yourself. If a company can't afford to pay you 50% with their expenses, are they charging enough to their customers.

Well, I always wonder how apple app store can pay 70% to the developers and run a much bigger business than IS. Even vimeo's rate is 90%! They definitely have a bigger bandwidth demand etc etc. That makes the unattainable 45% IS royalty rate (and all the Microstock agencies rates) look a little bit unfair.

[BaldricksTrousers]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

Actually, he might be poor if he paid us that much because the company wouldn't be making a profit. They could always raise prices though. I guess that is a question to ask yourself. If a company can't afford to pay you 50% with their expenses, are they charging enough to their customers.

Well, I always wonder how apple app store can pay 70% to the developers and run a much bigger business than IS. Even vimeo's rate is 90%! They definitely have a bigger bandwidth demand etc etc. That makes the unattainable 45% IS royalty rate (and all the Microstock agencies rates) look a little bit unfair.

Apples and oranges. Every image has to be inspected and stored. The smaller the business the larger percentage of turnover the same advertising exposure costs etc. etc. etc.
If you want to know what % commission would wipe out profits you need to do the calculation from the published figures. Not that it matters.

[ferdinand]

ss will (probably) never introduce exclusivity - that would be race to the top with commission - fotolia, for example, to survive - would need to go with at least 80%  commission for contributors - and big question is - would ft survive in new circumstances

if it happens - only two agencies will survive - ss and is - btw - with dollar photo club fotolia is tempting  fate - if they don t change something with dpc - they will disappear one way or another

[gostwyck]

Don't you think it is about time to start demanding fair compensation?

what % should Jon pay us? 50%?

Actually, he might be poor if he paid us that much because the company wouldn't be making a profit. They could always raise prices though. I guess that is a question to ask yourself. If a company can't afford to pay you 50% with their expenses, are they charging enough to their customers.

Well, I always wonder how apple app store can pay 70% to the developers and run a much bigger business than IS. Even vimeo's rate is 90%! They definitely have a bigger bandwidth demand etc etc. That makes the unattainable 45% IS royalty rate (and all the Microstock agencies rates) look a little bit unfair.

Apples and oranges. Every image has to be inspected and stored. The smaller the business the larger percentage of turnover the same advertising exposure costs etc. etc. etc.
If you want to know what % commission would wipe out profits you need to do the calculation from the published figures. Not that it matters.

Not really. Apps have to be tested and conform with far more detailed criteria than images do. Electronic books operate under the same 70% royalty and of course it is the publisher that sets the price not the selling agent. Same with iTunes.

If the 'agency agreement' works for apps, books and music then there's no reason at all why it couldn't work for images. The difference is simply where the market for each started from. Steve Jobs needed to entice the music industry to sell their catalogues via his new format so made them a good offer and then that became the standard for apps and books.

You can't really work backwards to "know what % commission would wipe out profits" because the current business model with the existing pricing architecture isn't the only way it could work.

For example there was a time that IS was selling images for $1 and paying 20% to everyone ... and yet were apparently still profitable. At that time, had they wanted to, they could have increased the price of images to say $1.50 and given all the extra money to artists. That would have ensured a royalty of nearly 50% without having incurred a significant cost increase to IS. Of course they did increase the prices by far more than that ... but Brucie-babe just chose to keep most of the money for himself rather than rewarding artists fairly.

Those of us that were around when IS introduced exclusivity know that had IS been just a bit more generous with the terms at the time, say 50-60%, then we'd almost all have gone with them. SS, DT and FT would barely have got off the ground and the market today could have been radically different for both IS and their contributors. If only IS had viewed contributors as valuable partners, rather than worthless suppliers to be screwed as far as possible, then things could have been very different.

Of course that didn't happen so instead SS had to tread the narrow tightrope between paying their contributors as much as possible (to prevent them going exclusive with IS) whilst remaining competitive on pricing. The big problem (for us and them) happened when DT and later FT decided to also enter the subs market. The annual and monthly cost of a subscription is big enough for customers to be price-concious and we the contributors have ended up being the squeezed suppliers in the middle of a battle for market share between SS, DT, FT and more lately TS. None of them have dared to significantly increase the prices of sub packages for years because of this. To some extent we independent contributors are partly to blame too because we have our own portfolios, effectively competing against ourselves, at each of the various agencies.

I know Gbalex likes to blame SS for everything bad in microstock but he is wrong. SS simply steered their ship through the tricky waters better than anyone else.

[etudiante_rapide]

7 pages long and 7321 views l8er,
i ressurected this thread out the interesting blow by blow.

so, we r not happy campers.
two words come to mind

- CANVA
-STOCKSY

 

[ShadySue]

On June 2rd this year

... Yuri provided some interesting insights on what he feels is the future of Midstock.
�Having just spent 3 days at GI in New York and today in Seattle with the IT exes I believe that very interesting things are in the pipeline for IS. Did I have a say in the upcoming changes... Yes - for sure. That being said. The GI top exe dev guys are highly competent and more flexible and agile towards change that I would have imagined. We are working on a set of core site improvements that will dramatically improve user experience and ultimately sales. Only thing that I can say now: Give IS three months and see the changes for yourself.
�Shutterstock might be in for a bit more competition than they expected, especially if GI has me project managing the develoment team and we utilize the two things GI has that nobody else has: 1. The best images in the world. 2. The best editors in the world. The best images displays that the world has ever seen is just around the corner. Watch this space!�

Gee, thanks for nothing, Yuri.
My sales, and those of most who are reporting, here, there and on the Fb groups I'm in, are even below those of the dismal summer months.

[Mantis]

On June 2rd this year

... Yuri provided some interesting insights on what he feels is the future of Midstock.
�Having just spent 3 days at GI in New York and today in Seattle with the IT exes I believe that very interesting things are in the pipeline for IS. Did I have a say in the upcoming changes... Yes - for sure. That being said. The GI top exe dev guys are highly competent and more flexible and agile towards change that I would have imagined. We are working on a set of core site improvements that will dramatically improve user experience and ultimately sales. Only thing that I can say now: Give IS three months and see the changes for yourself.
�Shutterstock might be in for a bit more competition than they expected, especially if GI has me project managing the develoment team and we utilize the two things GI has that nobody else has: 1. The best images in the world. 2. The best editors in the world. The best images displays that the world has ever seen is just around the corner. Watch this space!�

Gee, thanks for nothing, Yuri.
My sales, and those of most who are reporting, here, there and on the Fb groups I'm in, are even below those of the dismal summer months.

I think Yuri meant HIS sales. He could give rats ass about us. And how is it that midstock and shutterstock are in that same message? Shutterstock is micro not mid. Yuri knows only one thing....what's best for him.

[PixelBytes]

On June 2rd this year

... Yuri provided some interesting insights on what he feels is the future of Midstock.
�Having just spent 3 days at GI in New York and today in Seattle with the IT exes I believe that very interesting things are in the pipeline for IS. Did I have a say in the upcoming changes... Yes - for sure. That being said. The GI top exe dev guys are highly competent and more flexible and agile towards change that I would have imagined. We are working on a set of core site improvements that will dramatically improve user experience and ultimately sales. Only thing that I can say now: Give IS three months and see the changes for yourself.
�Shutterstock might be in for a bit more competition than they expected, especially if GI has me project managing the develoment team and we utilize the two things GI has that nobody else has: 1. The best images in the world. 2. The best editors in the world. The best images displays that the world has ever seen is just around the corner. Watch this space!�

Gee, thanks for nothing, Yuri.
My sales, and those of most who are reporting, here, there and on the Fb groups I'm in, are even below those of the dismal summer months.

I think Yuri meant HIS sales. He could give rats ass about us. And how is it that midstock and shutterstock are in that same message? Shutterstock is micro not mid. Yuri knows only one thing....what's best for him.

Agree Yuri is only about Yuri, which is fair enough, but I CAN'T believe he is happy with the direction things have gone.  Hard to find anyone who doesn't think istock is a disaster now, and I think Yuri is no exception. 

[Red Dove]

They need to close the gap between these two:

WAFFLE - to speak or write at length in a vague or trivial manner

RESULTS - a tangible occurrence or events following a process or action e.g. sales or profit