MicrostockGroup

...how much do you reckon commissions have gone up by?

In Kelly's note on the iStock forums (www.istockphoto.com/forum_messages.php?threadid=328488&page=4) to correct the recent CNET article, he said that 'The fraction of a percent was definitely about the total change in royalties paid out, not the number of people it affected'.  The fraction given in the article was 0.1% (though looks like it's now been edited out of the article).  Presumably the change was downwards, but I don't think that was actually specified.

Given that since September...
- Non-exclusive royalties dropped from 20% to 15-20%
- Royalty rates for many exclusive contributors dropped down one or more levels.  Some contributors saw their royalty percentages go up.
- Vetta royalties dropped for all participating contributors, from 25-40% to 22-30%, while the Vetta price went up significantly.
- Agency sales were introduced at the same royalty level as Vetta but at a significantly higher price.
- There was an influx of external Agency content.  Don't know what iStock's commission for those is, but it's thought by many to be 80%.
- 100% royalty day was dropped
- The extra 10% royalty on Extended Licenses for exclusives was dropped
- Exclusive+ prices have gone up significanly, and the proportion of E+ files has gone up.
- Minimum subscription payouts went down significantly

Those are off the top of my head, I probably missed out a few important ones there.

Obviously we'll never know, but given that royalties paid out have changed by 0.1%, how much would you guesstimate that iStock's takings increased by?

Way back in 2007, iStock's average payout was 29% (as revealed by Bruce Livingstone and discussed by Lee Torrens here: http://www.microstockdiaries.com/peek-inside-the-financials-of-istockphoto.html).

That was back in the days when iStock was on an unsustainable trajectory, supposedly without the rising profitability that 'all businesses should have'.  Hmm, wonder how many iStock artists have been watching their profitability rising of late 

Not sure if I'd say that iStock have managed to claw the overall percentage back to 80% commission, but I'd definitely guess that the average payout is now a lot lower than 29%.

For me, a huge surge in commission must have come from Vetta and Agency sales, which have been pushed relentlessly with apparently very little or no concern for the consequences.

At some sizes the prices are more than eight times higher than files in the exclusive collection.  Add a massive price increase to a big royalty reduction, and the increased commission take must be staggering.

Having conceded that payouts have fallen slightly, I think any rise in RC targets would not be met kindly, to put it very mildly.  But hey, that never put them off before.  But they certainly might need to lock a lot more threads and ban a lot more users from the forums to give that illusion of a site where everyone has "sort of settled down".

Seems to me all they really care about is finding the balance where they can profit the most from our work.

Gear things too high and they risk artists leaving in significant numbers.  Gear things too low and they risk paying money to artists which they could have taken for themselves.

I assumed the .1% change was what IS paid to the contributors, and IS is taking more for now (and total downloads have dropped).

Completely agree - given the huge shift of balance from artist royalties --> iStock commissions since September, if Kelly's statement is true the conclusion must be that iStockphoto's commissions have soared.

Which would mean that iStock have 99 problems, but profitability ain't one.

And that iStock's artists have 100 problems, with falling profitability right at the top 

Kelly's method of judging 'falling profitability' was not about actual profits, but about the percentages paid out:

From the Royalty Change Follow-up thread (www.istockphoto.com/forum_messages.php?threadid=252322&page=1)...
Since roughly 2005 we've been aware of a basic problem with how our business works. As the company grows, the overall percentage we pay out to contributing artists increases. In the most basic terms that means that iStock becomes less profitable with increased success. As a business model, it’s simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed.

Well now that's fixed 

But on that same basis, even artists who are seeing their income rising should know that their profitability is falling.  In Kelly's words, "as a business model it's simply unsustainable".  Is that a long-term problem that needs to be addressed?  Maybe Kelly just forgot to tell us the 'Artists businesses should get less profitable as iStockphoto grows' bit.

Didnt vetta sales used to have a 10% bonus?  That went away so vetta artists actually are getting less on each sale