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Author Topic: Friday's RC target announcement and iStock's strategy behind it  (Read 38910 times)

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Slovenian

« on: June 01, 2011, 10:04 »
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Probably everybody who's reading this now knows everything about the 2 delays, so I'll just focus on my observations, thoughts and conclusions as to why they chose this date:

1. They introduced P+ in May, so they could make indies happy, boosting their earnings and have a reason to set the bar even higher and make independents believe that P+ will help then reach their goals. I doubt P+ sales from the first weeks will continue indefinitely, so this is a great maneuver by IS. They're going to face less resistance by blinding some of the in dependants, manipulating them with this strategy.

2. The 27.5. best match change. They stopped favouring contributors with heavy AC/V ports. They prepared most of us for the announcement bringing bad news with a bit of good news in the last week. People tend to forget some of the bad things from the past if they get good news, especially multiple good news.

3. They waited for contributors to start the May stats thread, which they knew that it's going to be relatively more positive (at least a lot more than the April thread), because of the measures they took and were mentioned above.

What do you think? They're not that bad at psychology, right? Yes, they angered a lot of people last September, but it was well worth it for them and also calculated to still bring (big) profits at least in short term.


« Reply #1 on: June 01, 2011, 10:20 »
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I'm not sure any of that matters. When I look at my bottom line, it's about half of last year. Considering my royalty reduction was a wash with a price increase, that can only mean my sales have tanked. So neither me or IS are making more or benefited from the changes. I'm just one contributor though.

« Reply #2 on: June 01, 2011, 11:31 »
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I think there's a 50/50 chance they'll actually announce this year's RC targets on Friday (per Joyze's promise 3 weeks ago on May 13th).

I think there's a good chance they'll be the same as last year because even though sales have nosedived for some people, they'll hope they can pocket some extra cash without too much fuss from the contributors they care about.

Argument will be that  they could have raised the targets but were being nice guys and kept them the same.

« Reply #3 on: June 01, 2011, 11:36 »
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I share the same opinion as Jsnover.
Anxiously waiting!

Slovenian

« Reply #4 on: June 01, 2011, 12:24 »
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I wonder where are you getting your optimism from? ??? Because from Sep-May, everything was totally * up, they made a couple of welcoming changes for the reasons that I mentioned before. And best match is the same today as it was for the last 2,5 months, A/C heavily favoured. Yet another reason to be less optimistic.

In reality they should of course lower the targets or even better, get back to the same canister level that already payed the lowest royalties in the industry anyway (to indies at least)

« Reply #5 on: June 01, 2011, 12:57 »
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The previous royalty system was idiotic and indeed unsustainable!
It will never return. (And that's a good thing!)
If the targets and percentages are reasonably set (what is "reasonable" is, is open for debate) it is a perfect system.
The only flaw I see in it is that different media types have different targets instead of only one.

« Reply #6 on: June 01, 2011, 13:05 »
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I agree with OP and has the same concerns. However, I hope iStock realizes that they cannot afford to allienate the contributors anymore and will not raise the RC target. Just my wishful thinking.

Slovenian

« Reply #7 on: June 01, 2011, 13:11 »
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The previous royalty system was idiotic and indeed unsustainable!

No royalty system is unsustainable for an agency, if they take 70% of the money that buyers pay for our work.

I know u're really ambitious, growing fast (port, earnings etc), but think about what will happen in a couple of years when you hit the wall (most people hit it after 3-4 years, also those that started in 03). It's just stupid capitalistic mentality to expect indefinite growth. It's impossible, we all got this message 3 years ago, when the recession hit;)

« Reply #8 on: June 01, 2011, 13:22 »
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The previous royalty system was idiotic and indeed unsustainable!
Yes, paying 20% to contributors was totally unsustainable. It all makes sense now.  ;D

« Reply #9 on: June 01, 2011, 13:32 »
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The previous royalty system was idiotic and indeed unsustainable!
It will never return. (And that's a good thing!)
If the targets and percentages are reasonably set (what is "reasonable" is, is open for debate) it is a perfect system.
The only flaw I see in it is that different media types have different targets instead of only one.

The old system was completely sustainable. iStock had a guarantee that it would get no less than 60% of the gross. In reality, given what a small portion of the large pool of contributors ever really get serious about building a saleable portfolio, their take wouldn't ever get that low.

The new system is clearly much more profitable for them - a grading on a curve scheme where they can guarantee no more than a certain number of people get each percentage. The assumption was that they want the overall payout to be 20% to contributors and 80% to them.

What you should be alert to is that (a) any system they put in place today they can change completely tomorrow and (b) the clear indication of intent to minimize payouts to contributors wherever possible makes for a challenging business relationship. Look at what they've just done to Getty contributors, forcing their content onto Thinkstock whether they like it or not (they can drop selling via Getty if they don't like it).

If you find more and more of the sales of your content uploaded at iStock is sold through other outlets that don't give you RCs to maintain your royalty percentage, how fair will you feel that is? without opting out of Vetta/Agency completely, you can't control where they sell your Vetta/Agency content which is increasingly going to be a major avenue for iStock contributors to keep their earnings up in an era of decreasing downloads.

Look at Sean Locke's last two monthly reports. Downloads down about 20% over the prior year in spite of an increase of about 2K images in his portfolio. You can dismiss the rest of us as lazy idiots if you wish, but Sean is the model microstocker.

It's easy to be very optimistic when you're benefitting from the current system, but for heavens' sake, keep your eyes and ears open.

lagereek

« Reply #10 on: June 01, 2011, 13:37 »
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Really,  who cares, really?

« Reply #11 on: June 01, 2011, 14:39 »
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The previous royalty system was idiotic and indeed unsustainable!
It will never return. (And that's a good thing!)
If the targets and percentages are reasonably set (what is "reasonable" is, is open for debate) it is a perfect system.
The only flaw I see in it is that different media types have different targets instead of only one.

The old system was completely sustainable. iStock had a guarantee that it would get no less than 60% of the gross. In reality, given what a small portion of the large pool of contributors ever really get serious about building a saleable portfolio, their take wouldn't ever get that low.

The new system is clearly much more profitable for them - a grading on a curve scheme where they can guarantee no more than a certain number of people get each percentage. The assumption was that they want the overall payout to be 20% to contributors and 80% to them.

What you should be alert to is that (a) any system they put in place today they can change completely tomorrow and (b) the clear indication of intent to minimize payouts to contributors wherever possible makes for a challenging business relationship. Look at what they've just done to Getty contributors, forcing their content onto Thinkstock whether they like it or not (they can drop selling via Getty if they don't like it).

If you find more and more of the sales of your content uploaded at iStock is sold through other outlets that don't give you RCs to maintain your royalty percentage, how fair will you feel that is? without opting out of Vetta/Agency completely, you can't control where they sell your Vetta/Agency content which is increasingly going to be a major avenue for iStock contributors to keep their earnings up in an era of decreasing downloads.

Look at Sean Locke's last two monthly reports. Downloads down about 20% over the prior year in spite of an increase of about 2K images in his portfolio. You can dismiss the rest of us as lazy idiots if you wish, but Sean is the model microstocker.

It's easy to be very optimistic when you're benefitting from the current system, but for heavens' sake, keep your eyes and ears open.

No it was not. It essentially meant the longer they wait, the less percentage IS gets, Which means IS's keep paying out an ever growing percentage of their income as time goes bye. That is what is unsustainable with it. It was a stupid system to begin with and it is a good thing it has been fixed.
The second biggest problem with the previous system is that it does not award those who deserve it.  If for instance I am the next SJLOCKE, I have a good and growing portfolio it will still take me a whole lot of time to reach 25K d/l's in order to get to the 40% mark, it will take me much less to get to the 120K RC's mark.
The 3rd problem is motivation.
1. I know if I will work harder and give IS my best work it will greatly reduce the time it will take me to reach the higher RC levels. In the older system, it was more of how long you have been a member of IS.
2. If (for example) I am a professional photographer with high-end gear decide to contribute to IS, start building my portfolio and sell a few hundreds of files a month. You OTOH (again just for example) are an amateur weekend snap shooter but who was lucky enough to know of IS 5 or 6 years ago and now have over 25K downloads, but today, well you are way out of your league, you still sale here and there maybe a few dozens a month but you still earn your 40% just because you are an old timer .
Please explain to me why on earth shoud the Pro make 25% or 30 % and the amateur deservers 40% ???

Sean is actually doing great! He should be great full! Why ? easy:
IS's total portfolio grew MUCH more then 20% over this year, right? (Correct me if I am wrong!)
But Sean's portfolio grew by "only" 20% !  that means his total portfolio market share went DOWN and but his earning remained the same lucky guy!

Regarding your comments on Getty and the partner program, I completely agree.
Don't get me wrong, I ain't no IS fanboy, I promise you I curse them every day, but I also don't think everything is doom and gloom nor do I think everything is one great conspiracy to suck up more $$$ for contributors.

Please don't put words in my mouth. I didn't call anyone lazy or any other name calling, I am just giving out my honest opinion, even though I know it will not win the popularity vote.

I apologize for my (many) spelling mistakes, and am well out of energy after this long post.

Slovenian

« Reply #12 on: June 01, 2011, 15:07 »
0
The previous royalty system was idiotic and indeed unsustainable!
It will never return. (And that's a good thing!)
If the targets and percentages are reasonably set (what is "reasonable" is, is open for debate) it is a perfect system.
The only flaw I see in it is that different media types have different targets instead of only one.

The old system was completely sustainable. iStock had a guarantee that it would get no less than 60% of the gross. In reality, given what a small portion of the large pool of contributors ever really get serious about building a saleable portfolio, their take wouldn't ever get that low.

The new system is clearly much more profitable for them - a grading on a curve scheme where they can guarantee no more than a certain number of people get each percentage. The assumption was that they want the overall payout to be 20% to contributors and 80% to them.

What you should be alert to is that (a) any system they put in place today they can change completely tomorrow and (b) the clear indication of intent to minimize payouts to contributors wherever possible makes for a challenging business relationship. Look at what they've just done to Getty contributors, forcing their content onto Thinkstock whether they like it or not (they can drop selling via Getty if they don't like it).

If you find more and more of the sales of your content uploaded at iStock is sold through other outlets that don't give you RCs to maintain your royalty percentage, how fair will you feel that is? without opting out of Vetta/Agency completely, you can't control where they sell your Vetta/Agency content which is increasingly going to be a major avenue for iStock contributors to keep their earnings up in an era of decreasing downloads.

Look at Sean Locke's last two monthly reports. Downloads down about 20% over the prior year in spite of an increase of about 2K images in his portfolio. You can dismiss the rest of us as lazy idiots if you wish, but Sean is the model microstocker.

It's easy to be very optimistic when you're benefitting from the current system, but for heavens' sake, keep your eyes and ears open.

You couldn't put it better. Great read!

« Reply #13 on: June 01, 2011, 16:30 »
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Please explain to me why on earth shoud the Pro make 25% or 30 % and the amateur deservers 40% ???

I actually can't figure out why everyone doesn't get 40%.

helix7

« Reply #14 on: June 01, 2011, 16:32 »
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The previous royalty system was idiotic and indeed unsustainable...

Please tell me this is a joke. You couldn't possibly really believe that "unsustainable" line they were feeding us.

70% (average) going back to the house is unsustainable? Come on.

« Reply #15 on: June 01, 2011, 16:39 »
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Nor agreeing at all with this  aeonf idea that, althoungh no expressed in this way, seem to suggest: "old timers are bad, amateur  and lazy, new ones are great and professional". Nothing more wrong, it can be easily seen looking at the different portfolios.
« Last Edit: June 01, 2011, 16:40 by loop »

« Reply #16 on: June 01, 2011, 16:46 »
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The previous royalty system was idiotic and indeed unsustainable...

Please tell me this is a joke. You couldn't possibly really believe that "unsustainable" line they were feeding us.

70% (average) going back to the house is unsustainable? Come on.

Once again to make myself clear, I am NOT talking about the percentages themselves. I was ONLY talking about how you can achieve a higher one / better canister.  That indeed was unsustatinable!
Loop: that is NOT what I said and NOT what I am thinking. Pleae don't put words in my mouth or thoughts in my head!  
Quite silly realy, most if not all of the top dogs are old timers! I don't think anyone could say anthing bad about them!
All I am sating is JUST because you are an old timer DOESN'T mean you should earn more then a talented new comer.
« Last Edit: June 01, 2011, 16:53 by aeonf »

ShadySue

« Reply #17 on: June 01, 2011, 17:25 »
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Quite silly realy, most if not all of the top dogs are old timers! I don't think anyone could say anthing bad about them!
All I am sating is JUST because you are an old timer DOESN'T mean you should earn more then a talented new comer.
The real old-timers, well before my time, supported the site when they were exchanging files for free (2 for 1 or something like that?) then for 10c. It could be argued that they deserve to be paid more than the johnny come latelys who just jumped in when the model was more viable for them.

« Reply #18 on: June 01, 2011, 17:27 »
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No, you dind't say it and I didn't say you said it. But it was almost suggested in the tone.
Old timers were there opening the way while other "professionals" were making fun of them. Being the first (on buying google shares, or on opening a RF site) always will have some advantges, in this and in any other field.

Added, while editing the spelling: Rigth, ShadySue.
« Last Edit: June 01, 2011, 17:29 by loop »

« Reply #19 on: June 01, 2011, 17:53 »
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Quite silly realy, most if not all of the top dogs are old timers! I don't think anyone could say anthing bad about them!


This just isn't true. As but one example, see CEFutcher who joined in April 2008 was diamond just over 2 years later. Or see laflor who started in early 2009 and became diamond a year later in 2010. There are many other examples of recent successes.

There are many  (largely invisible) old timers who are stuck at bronze or silver and are unlikely to live long enough to reach diamond. The difference between those folks and those who did reach diamond was the quality and quantity of their uploads. The idea that the iStock ship was sinking under the weight of masses of old timer diamonds collecting large percentages without contributing actively is, I think, just a myth. I don't have any way to gather the statistics to back that up, but I think you probably don't either.

You keep repeating that the old system meant an ever-decreasing profit for iStock and that isn't true. No one under the old system could earn more than 40% royalty no matter how long they hung around.

60% of the gross should have been very sustainable for iStock - it just wasn't enough to feed Getty whose other businesses were in decline or H&Fs need for a return on their investment in buying Getty.

The one thing that was missing from the old system was some notion of compensation levels being based on the income you brought in - with multiple collections at varying prices, it would have been wrong to count a 150 credit download as the same as a 1 credit download. So they could have blended the models to use credits not downloads and made something sustainable and fair.

There's no arguing with you that the old system is gone, but it's gone because of greed, not because of a lack of sustainability.

« Reply #20 on: June 01, 2011, 19:08 »
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Please explain to me why on earth shoud the Pro make 25% or 30 % and the amateur deservers 40% ???

I actually can't figure out why everyone doesn't get 40%.

yep, why should it matter, when you are pro or amateur? or how long on the site? an image is image, IS accepted so obviously think it has worth.

the flaw in the motivation argument is I don't think you will reach the top RC ranks. It looks to me (and I haven't gone into it heavily - so maybe mistaken) the best match is skewed towards those on lower commission, so as your commission increases you will get worse best match placement, less sales and drop back down.

ShadySue

« Reply #21 on: June 01, 2011, 19:34 »
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the flaw in the motivation argument is I don't think you will reach the top RC ranks. It looks to me (and I haven't gone into it heavily - so maybe mistaken) the best match is skewed towards those on lower commission, so as your commission increases you will get worse best match placement, less sales and drop back down.
Huh? The best match is heavily skewed towards vetta and agency files, which are limited to exclusives, so higher commissions.

traveler1116

« Reply #22 on: June 01, 2011, 22:22 »
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the flaw in the motivation argument is I don't think you will reach the top RC ranks. It looks to me (and I haven't gone into it heavily - so maybe mistaken) the best match is skewed towards those on lower commission, so as your commission increases you will get worse best match placement, less sales and drop back down.
Huh? The best match is heavily skewed towards vetta and agency files, which are limited to exclusives, so higher commissions.
I think you mean lower commission %, agency and vetta get less than regular files.

« Reply #23 on: June 02, 2011, 00:30 »
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the flaw in the motivation argument is I don't think you will reach the top RC ranks. It looks to me (and I haven't gone into it heavily - so maybe mistaken) the best match is skewed towards those on lower commission, so as your commission increases you will get worse best match placement, less sales and drop back down.
Huh? The best match is heavily skewed towards vetta and agency files, which are limited to exclusives, so higher commissions.

ok sorry I totally ignored vetta and agency.
It seems though diamond and black diamond people have taken drops (or perhaps it is only a few us being vocal :)), while bronze etc are saying it's now great. Searches based around the stuff that I do seem to be bigger port people have their best sellers at the back, with low selling images at the front, while it is reverse for people with smaller ports / bronze etc. (like I said though I haven't gone into it heavily - just impressions)

« Reply #24 on: June 02, 2011, 03:14 »
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I have a question for all of you who think the new system is bad:
Lets say all of the RC targets where now slashed in half. so for example to hit the 40% mark you would need 60K credits instead of 120K, 5.25K for 30% etc' etc'
and for the sake of the arguement all non-exclusives had a fixed 20% income, or a ladder of 20%-25% instead of 15%-20%.
Would you STILL think the new system is not fair and/or bad ?

And JS: Great so you found 2 top dogs which are not old-timers, how does that make my statment not true ?!?
"Quite silly realy, most if not all of the top dogs are old timers! I don't"

Fine, so I take the "all" back. Still, the VAST majority of MS head-honchos are old-timers.


 

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