Author Topic: Getty's 20% (Read 16539 times)

gostwyck · « **Reply #25 on:** January 23, 2012, 18:02 »

^^^ Interesting thoughts Lisa. Without the exclusive content then Istock basically don't have a business that could compete in the current market. Come to think of it they don't really have that now anyway.

With JJRD having lost his job, amongst others, it is quite clear that there are no sacred cows at Istock that cannot be slayed under Rebbecca's regime. It does make you wonder what other changes might be afoot.

lisafx · « **Reply #26 on:** January 23, 2012, 18:07 »

Quote from: gostwyck on January 23, 2012, 18:02

With JJRD having lost his job, amongst others, it is quite clear that there are no sacred cows at Istock that cannot be slayed under Rebbecca's regime. It does make you wonder what other changes might be afoot.

Absolutely! I am starting to doubt that Istock's success is the ultimate goal (though Getty's surely is). The changes happening right now are things that would have been completely unthinkable to most of us even as recently as a couple of months ago.

ShadySue · « **Reply #27 on:** January 23, 2012, 18:07 »

Quote from: gostwyck on January 23, 2012, 18:02

^^^ Interesting thoughts Lisa. Without the exclusive content then Istock basically don't have a business that could compete in the current market. Come to think of it they don't really have that now anyway.

With JJRD having lost his job, amongst others, it is quite clear that there are no sacred cows at Istock that cannot be slayed under Rebbecca's regime. It does make you wonder what other changes might be afoot.

Oh, surely I can't believe I'm reading this from you or especially Lisa's speculation.

And not long after our beloved Lobo said, "Very few things are changing. We had layoffs for the first time in 12 years, that is the major change. We aren't recreating the policies on the site."
How could you imagine otherwise?

sharply_done · « **Reply #28 on:** January 23, 2012, 19:17 »

Quote from: lisafx on January 23, 2012, 17:52

Since we're making predictions, here's mine: Artist exclusivity and exclusive commissions and perks will become a thing of the past within a couple of years. I'm betting the "bug" preventing people from applying for exclusivity wasn't an accident and won't get fixed.

Exclusive artists with Vetta, TAC, and maybe some E+ will be invited to have those images all moved over to Getty as image exclusive (hasn't this already happened?), at the standard Getty 20%. The rest of their ports, presumed to be of low interest or over saturated subject matter, will be shuttled to TS, and also freed up to be uploaded to other micros.

Superstars like Lise and Sean may be able to negotiate special deals.

Non-exclusives will also be given the opportunity to create unique exclusive content for Getty collections.

Istock will probably not exist in two years. I imagine that the url will be redirected to TS and/or Getty.

Nobody freak out - this is just my guess about where things are headed. I would LOVE to be wrong!

As long as we're speculating, how's this: Commissions are lowered to 20% while at the same time making iStock an exclusive-only agency. This would reduce the iStock catalogue to ~1.5M images, which is more than robust enough to succeed, while at the same time reducing competition for sales by about a factor of 6. If the typical contributor experienced a (conservatively-estimated) four-fold increase in DLs, this would mean his/her income would at least double. iStock can control contributor income by limiting the number of contributors, allowing new members to join only if they have a proven sales record and can create files that the catalogue needs. 20% commission and closed-door/invitation-only membership: pretty much right along Getty policy lines.

The implications of this to independent contributors are pretty big: Indie income will drop by perhaps 20% (which seems to be a good number for an iStock average), and there'll now only be a 'Big3'.

gostwyck · « **Reply #29 on:** January 23, 2012, 19:43 »

Quote from: sharply_done on January 23, 2012, 19:17

As long as we're speculating, how's this: Commissions are lowered to 20% while at the same time making iStock an exclusive-only agency. This would reduce the iStock catalogue to ~1.5M images, which is more than robust enough to succeed, while at the same time reducing competition for sales by about a factor of 6. If the typical contributor experienced a (conservatively-estimated) four-fold increase in DLs, this would mean his/her income would at least double. iStock can control contributor income by limiting the number of contributors, allowing new members to join only if they have a proven sales record and can create files that the catalogue needs. 20% commissions and a closed-door/invitation membership - pretty much right along Getty policy lines.

The implications of this to independent contributors are pretty big: Indie income will drop by ~20% (which seems to be a good number for an iStock average), and there'll now only be a 'Big3'.

Sorry mate but 1.5M images is not going to cut it in this day and age, not when there's 18M elsewhere that are cheaper and you can actually search for them properly. Where does TS come in your theory? Such a move would essentially be Istock hoisting the white flag and they would barely exist within a couple of years. It's not going to happen because it obviously wouldn't work. The outcome would result in Istock becoming a small 'boutique agency' instead of a $300M per annum giant. How is that going to help H&F make a profit on their investment? An 80% cut of annual sales of say $50M (or even $200M) is a lot less than 30% of $300M.

PaulieWalnuts · « **Reply #30 on:** January 23, 2012, 22:45 »

Quote from: gostwyck on January 23, 2012, 19:43

Quote from: sharply_done on January 23, 2012, 19:17
As long as we're speculating, how's this: Commissions are lowered to 20% while at the same time making iStock an exclusive-only agency. This would reduce the iStock catalogue to ~1.5M images, which is more than robust enough to succeed, while at the same time reducing competition for sales by about a factor of 6. If the typical contributor experienced a (conservatively-estimated) four-fold increase in DLs, this would mean his/her income would at least double. iStock can control contributor income by limiting the number of contributors, allowing new members to join only if they have a proven sales record and can create files that the catalogue needs. 20% commissions and a closed-door/invitation membership - pretty much right along Getty policy lines.

The implications of this to independent contributors are pretty big: Indie income will drop by ~20% (which seems to be a good number for an iStock average), and there'll now only be a 'Big3'.

Sorry mate but 1.5M images is not going to cut it in this day and age, not when there's 18M elsewhere that are cheaper and you can actually search for them properly. Where does TS come in your theory? Such a move would essentially be Istock hoisting the white flag and they would barely exist within a couple of years. It's not going to happen because it obviously wouldn't work. The outcome would result in Istock becoming a small 'boutique agency' instead of a $300M per annum giant. How is that going to help H&F make a profit on their investment? An 80% cut of annual sales of say $50M (or even $200M) is a lot less than 30% of $300M.

Sharply has a very interesting and financially logical point.

And is 18M images really a benefit for buyers? Depends on the content but in free-for-all micro probably not. Is 18 different angles of an isolated apple from the same contributor better than 1 isolated apple?

KB · « **Reply #31 on:** January 23, 2012, 23:42 »

Quote from: lisafx on January 23, 2012, 18:07

I am starting to doubt that Istock's success is the ultimate goal (though Getty's surely is).

Is it? What happened to the (entirely believable, IMO) idea that H&F's only goal is to sell Getty within a (now quickly approaching) time-frame? They seem to have been doing things that certainly point in that direction, stripping expenses to the bone and making the bottom line growth look better year over year.

My own not so bold prediction is that they do manage to unload Getty this year. And if that happens, anything could result.

BaldricksTrousers · « **Reply #32 on:** January 24, 2012, 01:08 »

Quote from: PaulieWalnuts on January 23, 2012, 22:45

Sharply has a very interesting and financially logical point.

And is 18M images really a benefit for buyers? Depends on the content but in free-for-all micro probably not. Is 18 different angles of an isolated apple from the same contributor better than 1 isolated apple?

No he doesn't. It's (exclusive) wishful thinking. How does iStock benefit from reducing diversity and giving all the sales to any particular subset of contributors? In case you haven't noticed, they don't give a monkey's uncle for any contributors ... maybe not even for Lise Gagne now the old gang has lost control.

The marketing strategy is: "We've got what everyone else has got PLUS millions of images that they can't have". Throw out the independents and buyers have to go to other agencies for unique material that iS doesn't happen to have covered by exclusives.

BTW, sorry to say, but I actually found Lobo's comment about it being the first bunch of sackings after years of hiring very funny. You could almost translate it into something very familiar .... "Years ago, we decided to hire someone. Then we hired someone else. We couldn't sleep all night. We were scared that our rivals might start hiring people too, and then what would we do? But we needed workers so we just went for it, knowing even then, that keeping on hiring people just isn't sustainable. Eventually, the wage bill would exceed the earnings. And now that time has come. Unsustainability has caught up with us. So we're having to let them go. It hasn't been an easy decision. But it was inevitable it would come to this as soon as we started to hire people. However, we know how stressful work can be: so a job isn't going to be something that makes people happy."

BaldricksTrousers · « **Reply #33 on:** January 24, 2012, 01:16 »

Quote from: KB on January 23, 2012, 23:42

Quote from: lisafx on January 23, 2012, 18:07
I am starting to doubt that Istock's success is the ultimate goal (though Getty's surely is).
Is it? What happened to the (entirely believable, IMO) idea that H&F's only goal is to sell Getty within a (now quickly approaching) time-frame? They seem to have been doing things that certainly point in that direction, stripping expenses to the bone and making the bottom line growth look better year over year.

My own not so bold prediction is that they do manage to unload Getty this year. And if that happens, anything could result.

They were meant to have sold it already according to the timeline some top official gave when it was first acquired. When it reached the sell-by date and nobody bought it, they mortgaged it for a huge loan to pay themselves back. I doubt if it is saleable in the foreseeable future.

Jo Ann Snover · « **Reply #34 on:** January 24, 2012, 02:20 »

Quote from: sharply_done on January 23, 2012, 19:17

As long as we're speculating, how's this: Commissions are lowered to 20% while at the same time making iStock an exclusive-only agency. This would reduce the iStock catalogue to ~1.5M images, which is more than robust enough to succeed, while at the same time reducing competition for sales by about a factor of 6. If the typical contributor experienced a (conservatively-estimated) four-fold increase in DLs, this would mean his/her income would at least double. iStock can control contributor income by limiting the number of contributors, allowing new members to join only if they have a proven sales record and can create files that the catalogue needs. 20% commission and closed-door/invitation-only membership: pretty much right along Getty policy lines.

The implications of this to independent contributors are pretty big: Indie income will drop by perhaps 20% (which seems to be a good number for an iStock average), and there'll now only be a 'Big3'.

I don't think this is all that likely, but if Getty did go this route, I don't think it'd play out the way you think. And I would guess this would improve things for indies rather than hurt them (beyond the first couple of months of transition). If Getty went this route sales would drop significantly a soon as buyers used up existing credit bundles. All those buyers who can no longer do one stop shopping at iStock are going to migrate some portion (and the risk for iStock is that they migrate all) of their business elsewhere. It'll push any buyers sitting on the fence about whether they will stick with iStock off the fence - and most will do more shopping elsewhere for all the content iStock no longer has.

Given the drop in sales and the drop in contributors, the trick will be whether the remaining exclusives will see much of a boost. Whatever doesn't stay with iStock will move to the other agencies (and there'll be no indie content on TS any more so it won't migrate there) which may more than make up for the ever-declining indie income from iStock.

I also would think that exclusives would be required to participate in the partner program - otherwise there's virtually no volume of new content to support TS subscriptions.

But iStock in this incarnation wouldn't really be exclusive the way that word used to be used - Agency content on iStock, edstock, Hulton Archive, etdstock2 on iStock and all the iStock content on the Getty sites. Why would anyone shop at iStock any more - a TS subscription which gives you 10% off Getty Images content (how you get the Vetta/Agency stuff) would be a better way to get everything you need cheaper.

PaulieWalnuts · « **Reply #35 on:** January 24, 2012, 05:55 »

Quote from: BaldricksTrousers on January 24, 2012, 01:08

Quote from: PaulieWalnuts on January 23, 2012, 22:45
Sharply has a very interesting and financially logical point.

And is 18M images really a benefit for buyers? Depends on the content but in free-for-all micro probably not. Is 18 different angles of an isolated apple from the same contributor better than 1 isolated apple?

No he doesn't. It's (exclusive) wishful thinking. How does iStock benefit from reducing diversity and giving all the sales to any particular subset of contributors? In case you haven't noticed, they don't give a monkey's uncle for any contributors ... maybe not even for Lise Gagne now the old gang has lost control.

The marketing strategy is: "We've got what everyone else has got PLUS millions of images that they can't have". Throw out the independents and buyers have to go to other agencies for unique material that iS doesn't happen to have covered by exclusives.

BTW, sorry to say, but I actually found Lobo's comment about it being the first bunch of sackings after years of hiring very funny. You could almost translate it into something very familiar .... "Years ago, we decided to hire someone. Then we hired someone else. We couldn't sleep all night. We were scared that our rivals might start hiring people too, and then what would we do? But we needed workers so we just went for it, knowing even then, that keeping on hiring people just isn't sustainable. Eventually, the wage bill would exceed the earnings. And now that time has come. Unsustainability has caught up with us. So we're having to let them go. It hasn't been an easy decision. But it was inevitable it would come to this as soon as we started to hire people. However, we know how stressful work can be: so a job isn't going to be something that makes people happy."

Uh, yes, he does. Getty's thinking is, and has been, profitability. If they dumped non-exclusives, that buyer money could be redistributed among the smaller pool of exclusives which would raise exclusive's earnings. That would then allow them to drop commissions which would bring contributor earnings back down to what they were and give them another huge boost in profits. They could then say "see, even though commissions changed it hasn't affected your earnings" which is the pitch they've been giving every time they make a change. Very plausible.

The "exclusive plus everything else" concept seemed to be Istock's marketing strategy, not Getty's. Getty's strategy is to control and optimize content. Plus, there is a ton of content available elsewhere that's not on Istock so that concept is only partially true.

ShadySue · « **Reply #36 on:** January 24, 2012, 06:16 »

And at the very same time they were laying off people from iStock, they are bumming up TS (copied link from iStock forum) http://www.marketwatch.com/story/thinkstocks-image-offering-has-more-than-doubled-since-launch-2012-01-19
Of the scenarios speculated about here and in other threads, I'm guessing they're likely to kick V/A to Getty, and downgrade everything else to TS.
At that point, many people will pull some/all of their port either because they aren't going to sell full sized images for a pittance or because of the rampant cronyism that is V/A.
Not sure how they're going to jump on exclusivity. From the way they're refusing to accept people who want to become exclusive in the 250-500 dls bracket because they broke the acceptance rate thingy and haven't been able to/have chosen not to fix it within six weeks, they're not interested in encouraging people to become exclusive at an early stage in their stock career. Couple that with the fact that they don't debrief leaving exclusives, it clearly isn't a priority for them now.
But they've done worse than we've speculated in the past. There weren't many who foretold the RC bombshell - though I remember a few people saying it wasn't fair to reward people just because they'd been submitting pictures for a long time and had grown the company. Certainly, few expected them to renege on their 'grandfathered-in' promise.

BaldricksTrousers · « **Reply #37 on:** January 24, 2012, 06:32 »

If they dumped the non-exclusives the buyer money could (and almost certainly would) be redistributed to other agencies, since it would mean yet another price rise at an agency that experience suggests has already pushed prices too far and lost buyers as a result.

Charging higher prices for a less comprehensive product would be dumb. If they want to squeeze the exclusives' commission levels all they have to do is make the RC levels less acheivable. Simple.

The argument that independent content doesn't matter because nobody needs 1,000 isolated apples can just as easily be turned on its head to say that exclusive content doesn't matter because who needs 1,000 handshakes. In which case the rational move for buyers is to go for the cheapest option, whether that is TS or DP or SS or whoever.

But just as exclusives bring more than handshakes to the collection, independents do more than apples.

gostwyck · « **Reply #38 on:** January 24, 2012, 06:42 »

Quote from: BaldricksTrousers on January 24, 2012, 06:32

If they want to squeeze the exclusives' commission levels all they have to do is make the RC levels less acheivable. Simple.

Haven't they already done that? Judging by the reports from most exclusives sales appear to have fallen rather more than the RC targets have been reduced.

BaldricksTrousers · « **Reply #39 on:** January 24, 2012, 06:51 »

Quote from: gostwyck on January 24, 2012, 06:42

Quote from: BaldricksTrousers on January 24, 2012, 06:32
If they want to squeeze the exclusives' commission levels all they have to do is make the RC levels less acheivable. Simple.

Haven't they already done that? Judging by the reports from most exclusives sales appear to have fallen rather more than the RC targets have been reduced.

And they can keep doing it, can't they? As we know, the fault lies with the suppliers who have failed to work hard enough to supply what customers want, it's fairer like this. Isn't that what those who weren't losing out told us when the system first came in?

michealo · « **Reply #40 on:** January 24, 2012, 08:28 »

Quote from: BaldricksTrousers on January 24, 2012, 06:51

Quote from: gostwyck on January 24, 2012, 06:42
Quote from: BaldricksTrousers on January 24, 2012, 06:32
If they want to squeeze the exclusives' commission levels all they have to do is make the RC levels less acheivable. Simple.

Haven't they already done that? Judging by the reports from most exclusives sales appear to have fallen rather more than the RC targets have been reduced.

And they can keep doing it, can't they? As we know, the fault lies with the suppliers who have failed to work hard enough to supply what customers want, it's fairer like this. Isn't that what those who weren't losing out told us when the system first came in?

they are just exploiting the tragedy of the commons, they would be foolish not to

sharpshot · « **Reply #41 on:** January 24, 2012, 08:55 »

Quote from: sharply_done on January 23, 2012, 19:17

Quote from: lisafx on January 23, 2012, 17:52
Since we're making predictions, here's mine: Artist exclusivity and exclusive commissions and perks will become a thing of the past within a couple of years. I'm betting the "bug" preventing people from applying for exclusivity wasn't an accident and won't get fixed.

Exclusive artists with Vetta, TAC, and maybe some E+ will be invited to have those images all moved over to Getty as image exclusive (hasn't this already happened?), at the standard Getty 20%. The rest of their ports, presumed to be of low interest or over saturated subject matter, will be shuttled to TS, and also freed up to be uploaded to other micros.

Superstars like Lise and Sean may be able to negotiate special deals.

Non-exclusives will also be given the opportunity to create unique exclusive content for Getty collections.

Istock will probably not exist in two years. I imagine that the url will be redirected to TS and/or Getty.

Nobody freak out - this is just my guess about where things are headed. I would LOVE to be wrong!

As long as we're speculating, how's this: Commissions are lowered to 20% while at the same time making iStock an exclusive-only agency. This would reduce the iStock catalogue to ~1.5M images, which is more than robust enough to succeed, while at the same time reducing competition for sales by about a factor of 6. If the typical contributor experienced a (conservatively-estimated) four-fold increase in DLs, this would mean his/her income would at least double. iStock can control contributor income by limiting the number of contributors, allowing new members to join only if they have a proven sales record and can create files that the catalogue needs. 20% commission and closed-door/invitation-only membership: pretty much right along Getty policy lines.

The implications of this to independent contributors are pretty big: Indie income will drop by perhaps 20% (which seems to be a good number for an iStock average), and there'll now only be a 'Big3'.

I think a lot of that 1.5m are low quality images that don't sell much. The top exclusives are great but there's a lot that are just happy snappers that have a big portfolio that doesn't earn much. I think this move would bring a mass exodus of buyers, exclusives incomes would plummet and non-exclusives would see a nice boost. I agree on one point, there would only be a big 3

I think this is unlikely to happen, I'm sure they would make much more money by dumping contributor exclusivity and using image exclusivity. That might hurt the competition, as many non-exclusives would try image exclusivity. Wouldn't that be more like the way Getty do it?

loop · « **Reply #42 on:** January 24, 2012, 09:07 »

If they had wanted go in the direction of lowering comissions, they had a great opportunty just some weeks ago. It would have been enough to not lower heavily the RC targets. Many exlusives (an no exc) would have sunk to inferior levels. Instead, they decided to lower RC targets and in my opinion, they did that because they didn't want to lose exclusives and other contributors.

BaldricksTrousers · « **Reply #43 on:** January 24, 2012, 09:17 »

From the way they increased TS commissions early last year I think it is clear that Getty have a predetermined target and that they will adjust commissions up or down to maintain the required percentage/profit level.

The question is: were the original RC levels set to deliver the percentage take that Getty had determined it was going to have? Maybe they were, or maybe it would have been too much of a cut in one go and the shift is being phased in over two or three years.

ShadySue · « **Reply #44 on:** January 24, 2012, 09:24 »

Quote from: BaldricksTrousers on January 24, 2012, 09:17

From the way they increased TS commissions early last year I think it is clear that Getty have a predetermined target and that they will adjust commissions up or down to maintain the required percentage/profit level.

Maybe, or maybe they were trying to 'encourage' more people to voluntarily take part in the PP; but not enough people did, so they had to force indies in.

gostwyck · « **Reply #45 on:** January 24, 2012, 09:43 »

Quote from: BaldricksTrousers on January 24, 2012, 09:17

From the way they increased TS commissions early last year I think it is clear that Getty have a predetermined target and that they will adjust commissions up or down to maintain the required percentage/profit level.

The question is: were the original RC levels set to deliver the percentage take that Getty had determined it was going to have? Maybe they were, or maybe it would have been too much of a cut in one go and the shift is being phased in over two or three years.

Surely TS commissions were increased to attract more content? When that didn't work they had to make it mandatory for independents.

I don't think there was any original intention to 'stage' the RC levels. I'm sure, when they were introduced. that Istock had been growing every single month for it's entire existence and that was expected to continue for the foreseeable future. How wrong they were. Now they dare not admit how much sales have been falling and anyway, by not reducing RC targets appropriately, it is helping their now falling profits. Laying off 30 members of staff will help too.

lisafx · « **Reply #46 on:** January 24, 2012, 12:15 »

Quote from: KB on January 23, 2012, 23:42

Quote from: lisafx on January 23, 2012, 18:07
I am starting to doubt that Istock's success is the ultimate goal (though Getty's surely is).
Is it? What happened to the (entirely believable, IMO) idea that H&F's only goal is to sell Getty within a (now quickly approaching) time-frame? They seem to have been doing things that certainly point in that direction, stripping expenses to the bone and making the bottom line growth look better year over year.

Very good point. I was lumping Getty in with H&F, but if you separate them out, then of course H&F will be putting their own interests first.

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Author Topic: Getty's 20% (Read 16539 times)

gostwyck

lisafx

ShadySue

sharply_done

gostwyck

PaulieWalnuts

KB

BaldricksTrousers

BaldricksTrousers

Jo Ann Snover

PaulieWalnuts

ShadySue

BaldricksTrousers

gostwyck

BaldricksTrousers

michealo

sharpshot

loop

BaldricksTrousers

ShadySue

gostwyck

lisafx

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