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Author Topic: Istock Second "Explanation" to Contributors  (Read 15988 times)

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anc

« on: September 09, 2010, 10:00 »
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Istock posted a second "Explanation" to its contributors - the link is here:

http://www.istockphoto.com/forum_messages.php?threadid=252322

This is the bit that irritates me:

"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."

If they want Istock's profit to increase each year why don't they advertise to potential customers more. Concentrate on raising everyone's profit - istock's and contributors. Concentrate on getting more people buying from Istock.

Next year are they going to lower contributor royalties again because they need to increase their profitability next year too?

Basically what they are saying is "We get one pizza a year -- and whereas before you used to be given two slices of pizza from us, now we will just give you one." -- instead of being like - "Okay how can we get more pizza for both of us"
« Last Edit: September 09, 2010, 10:02 by anc »


« Reply #1 on: September 09, 2010, 10:09 »
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Ok, they could not increase contributors' margins anymore, keep the existing members' share and change/cancel increases only for people who would achieve higher ranks or choose exclusivity from now.  But cut the already mere 20% is just ridiculous.

« Reply #2 on: September 09, 2010, 11:43 »
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So, what they're saying is that they are the most mismanaged business in the industry because they can't maintain the same royalty rates in the rest of the industry despite having higher prices.  ???

I also like how they don't even really mention non-exclusives.

m@m

« Reply #3 on: September 09, 2010, 11:49 »
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I also like how they don't even really mention non-exclusives.

It's all mind over matter, they don't mind, we don't matter.  ;)

« Reply #4 on: September 09, 2010, 11:50 »
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I also like how they don't even really mention non-exclusives.
Thomson did, in his second announcement. He admitted non-exclusives would suffer the hardest blow.

donding

  • Think before you speak
« Reply #5 on: September 09, 2010, 11:53 »
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So, what they're saying is that they are the most mismanaged business in the industry because they can't maintain the same royalty rates in the rest of the industry despite having higher prices.  ???

I also like how they don't even really mention non-exclusives.

That's because we aren't all that important. It is the exclusives where they make a lot of the top dollars. I was just thinking about what they said in that statement which may pound that nail deeper into their coffin. Was it a smart thing to say their profits were going down from a business point of view?

« Reply #6 on: September 09, 2010, 12:05 »
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Istock posted a second "Explanation" to its contributors - the link is here:

http://www.istockphoto.com/forum_messages.php?threadid=252322

This is the bit that irritates me:

"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."


Wow. This is a biggest piece of BS I ever heard. Obviously, whoever wrote this has trouble with basic math, or counting on us to have failed math in 4th grade. How is it even possible that "overall percentage" increases when they always paid contributors 20% of the sale??? Did they increase our percentage without telling us somehow in the last years? Well of course not. The percentage remained the same. The amount of money they paid to contributors increased, but so did their profits, correspondingly! in the 20:80 ratio. If they used to pay contributors 2 million, they were making 8. If now they their payouts are 20 million, they are making 80! How is that becoming less profitable with increased success? And why making millions and millions of dollars a year is not enough for them?

« Reply #7 on: September 09, 2010, 12:09 »
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Istock posted a second "Explanation" to its contributors - the link is here:

http://www.istockphoto.com/forum_messages.php?threadid=252322

This is the bit that irritates me:

"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."


Wow. This is a biggest piece of BS I ever heard. Obviously, whoever wrote this has trouble with basic math, or counting on us to have failed math in 4th grade. How is it even possible that "overall percentage" increases when they always paid contributors 20% of the sale??? Did they increase our percentage without telling us somehow in the last years? Well of course not. The percentage remained the same. The amount of money they paid to contributors increased, but so did their profits, correspondingly! in the 20:80 ratio. If they used to pay contributors 2 million, they were making 8. If now they their payouts are 20 million, they are making 80! How is that becoming less profitable with increased success? And why making millions and millions of dollars a year is not enough for them?


LOL it is just crazy.. they earn 80% from the non and around 60% from the exclusives no? they must have a lot of expenses or something is wrong there..

Xalanx

« Reply #8 on: September 09, 2010, 12:11 »
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Istock posted a second "Explanation" to its contributors - the link is here:

http://www.istockphoto.com/forum_messages.php?threadid=252322

This is the bit that irritates me:

"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."


Wow. This is a biggest piece of BS I ever heard. Obviously, whoever wrote this has trouble with basic math, or counting on us to have failed math in 4th grade. How is it even possible that "overall percentage" increases when they always paid contributors 20% of the sale??? Did they increase our percentage without telling us somehow in the last years? Well of course not. The percentage remained the same. The amount of money they paid to contributors increased, but so did their profits, correspondingly! in the 20:80 ratio. If they used to pay contributors 2 million, they were making 8. If now they their payouts are 20 million, they are making 80! How is that becoming less profitable with increased success? And why making millions and millions of dollars a year is not enough for them?


Their "overall percentage increase" is referring probably to the fact that contributors changed canisters and therefore commission percentage. But its crap anyway, in my opinion. Their business is not unsustainable, at least NOT BECAUSE of contributors increasing canisters.

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #9 on: September 09, 2010, 12:17 »
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Istock posted a second "Explanation" to its contributors - the link is here:http://www.istockphoto.com/forum_messages.php?threadid=252322This is the bit that irritates me:"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."


Wow. This is a biggest piece of BS I ever heard. Obviously, whoever wrote this has trouble with basic math, or counting on us to have failed math in 4th grade. How is it even possible that "overall percentage" increases when they always paid contributors 20% of the sale??? Did they increase our percentage without telling us somehow in the last years? Well of course not. The percentage remained the same. The amount of money they paid to contributors increased, but so did their profits, correspondingly! in the 20:80 ratio. If they used to pay contributors 2 million, they were making 8. If now they their payouts are 20 million, they are making 80! How is that becoming less profitable with increased success? And why making millions and millions of dollars a year is not enough for them?


You are thinking only about non-exclusives. Given enough time with the old model, say 20 years as an example, even exclusives who uploaded 100 images their first month and then quit could go from 20% to a 40% diamond just from total downloads over time. I get what they're saying. Over time their average profit decreases as more people move up canisters. Which every exclusive eventually will. I understand what they're getting at but don't agree with the goals they've set. I think their estimates are off. We'll see if they change them.

« Reply #10 on: September 09, 2010, 12:26 »
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Istock posted a second "Explanation" to its contributors - the link is here:http://www.istockphoto.com/forum_messages.php?threadid=252322This is the bit that irritates me:"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."


Wow. This is a biggest piece of BS I ever heard. Obviously, whoever wrote this has trouble with basic math, or counting on us to have failed math in 4th grade. How is it even possible that "overall percentage" increases when they always paid contributors 20% of the sale??? Did they increase our percentage without telling us somehow in the last years? Well of course not. The percentage remained the same. The amount of money they paid to contributors increased, but so did their profits, correspondingly! in the 20:80 ratio. If they used to pay contributors 2 million, they were making 8. If now they their payouts are 20 million, they are making 80! How is that becoming less profitable with increased success? And why making millions and millions of dollars a year is not enough for them?


You are thinking only about non-exclusives. Given enough time with the old model, say 20 years as an example, even exclusives who uploaded 100 images their first month and then quit could go from 20% to a 40% diamond just from total downloads over time. I get what they're saying. Over time their average profit decreases as more people move up canisters. Which every exclusive eventually will. I understand what they're getting at but don't agree with the goals they've set. I think their estimates are off. We'll see if they change them.


What do you think would be reasonable levels?

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #11 on: September 09, 2010, 12:37 »
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Istock posted a second "Explanation" to its contributors - the link is here:http://www.istockphoto.com/forum_messages.php?threadid=252322This is the bit that irritates me:"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."


Wow. This is a biggest piece of BS I ever heard. Obviously, whoever wrote this has trouble with basic math, or counting on us to have failed math in 4th grade. How is it even possible that "overall percentage" increases when they always paid contributors 20% of the sale??? Did they increase our percentage without telling us somehow in the last years? Well of course not. The percentage remained the same. The amount of money they paid to contributors increased, but so did their profits, correspondingly! in the 20:80 ratio. If they used to pay contributors 2 million, they were making 8. If now they their payouts are 20 million, they are making 80! How is that becoming less profitable with increased success? And why making millions and millions of dollars a year is not enough for them?


You are thinking only about non-exclusives. Given enough time with the old model, say 20 years as an example, even exclusives who uploaded 100 images their first month and then quit could go from 20% to a 40% diamond just from total downloads over time. I get what they're saying. Over time their average profit decreases as more people move up canisters. Which every exclusive eventually will. I understand what they're getting at but don't agree with the goals they've set. I think their estimates are off. We'll see if they change them.


What do you think would be reasonable levels?


Don't know yet. I haven't run the numbers. But according to istock the last four months of the year equal the first 8 months in terms of credit volume sales. So supposedly this end of year boost should put people way higher in redeemed credits than people believe. If that's true it would double my current redeemed credits level by the end of the year which I find hard to believe. We'll see.

« Reply #12 on: September 09, 2010, 12:37 »
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Istock posted a second "Explanation" to its contributors - the link is here:http://www.istockphoto.com/forum_messages.php?threadid=252322This is the bit that irritates me:"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, its simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed."


Wow. This is a biggest piece of BS I ever heard. Obviously, whoever wrote this has trouble with basic math, or counting on us to have failed math in 4th grade. How is it even possible that "overall percentage" increases when they always paid contributors 20% of the sale??? Did they increase our percentage without telling us somehow in the last years? Well of course not. The percentage remained the same. The amount of money they paid to contributors increased, but so did their profits, correspondingly! in the 20:80 ratio. If they used to pay contributors 2 million, they were making 8. If now they their payouts are 20 million, they are making 80! How is that becoming less profitable with increased success? And why making millions and millions of dollars a year is not enough for them?


You are thinking only about non-exclusives. Given enough time with the old model, say 20 years as an example, even exclusives who uploaded 100 images their first month and then quit could go from 20% to a 40% diamond just from total downloads over time. I get what they're saying. Over time their average profit decreases as more people move up canisters. Which every exclusive eventually will. I understand what they're getting at but don't agree with the goals they've set. I think their estimates are off. We'll see if they change them.


Yes I was thinking about non-exclusives, that's true. I've been a diamond non-exclusive on Istock for quite a while and wasn't following their incentives for exclusives... WHICH THEY INTRODUCED THEMSELVES! Just after being bought by Getty, surprise-surprise... Their obsession with exclusivity caused lower upload limits and acceptance rate for non-exclusives, even if they were good sellers, which was ridiculous and against all common sense. And NOW they are making non-exclusives pay for their short-sighted decisions! Well they are making all contributors pay. Wonders of corporate culture...

« Reply #13 on: September 09, 2010, 12:44 »
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"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, its simply unsustainable

I haven't seen my 20% increase anywhere in the last five years I have been a member. This is a very invalid argument for us independents.

michealo

« Reply #14 on: September 09, 2010, 12:54 »
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.
« Last Edit: September 09, 2010, 12:58 by michealo »

vonkara

« Reply #15 on: September 09, 2010, 13:00 »
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They pay the lowest in all industry. The problem is not the contributor share, it's the management it seem
« Last Edit: September 09, 2010, 13:51 by Vonkara »

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #16 on: September 09, 2010, 13:01 »
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.

What happened? Did you figure out your variable costs post didn't add up?

« Reply #17 on: September 09, 2010, 13:48 »
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Why couldn't Istockphoto just leave their 20% as a base and added more to contributors with more yearly sales? I am sure that would have been fine with most people. And it wouldn't make them "less profitable". Simple as that. If you don't take greed into account.

« Reply #18 on: September 09, 2010, 14:11 »
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What if they did a per image approach instead. I really don't know what kind of effect this would have on anyone, but it is interesting to think about. I think non exclusives should still get a flat 20%, anything below that is just pathetic. But here are some numbers I pulled out of my ass for exclusives.

1-20 downloads = 25% commission
21-200 downloads = 30% commission
201-1000 downloads = 35% commission
1001-5000 downloads = 40% commission
5001+ downloads = 45% commission

« Reply #19 on: September 09, 2010, 14:23 »
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What if they did a per image approach instead.
That's the DT approach, and it works well. A buyer doesn't buy a contributor or a canister, but an image.

vonkara

« Reply #20 on: September 09, 2010, 14:27 »
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What if they did a per image approach instead.
That's the DT approach, and it works well. A buyer doesn't buy a contributor or a canister, but an image.

I would love to see something like the DT image levels on Istock

What if they did a per image approach instead. I really don't know what kind of effect this would have on anyone, but it is interesting to think about. I think non exclusives should still get a flat 20%, anything below that is just pathetic. But here are some numbers I pulled out of my ass for exclusives.

1-20 downloads = 25% commission
21-200 downloads = 30% commission
201-1000 downloads = 35% commission
1001-5000 downloads = 40% commission
5001+ downloads = 45% commission

That would be something more simple than what it actually is. I can't believe that for now on, I can't focus on doing fonts or anything that could be bought in Xsmall size. It's ridiculous how it harm some images popularity

« Reply #21 on: September 09, 2010, 14:32 »
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Why couldn't Istockphoto just leave their 20% as a base and added more to contributors with more yearly sales? I am sure that would have been fine with most people. And it wouldn't make them "less profitable". Simple as that. If you don't take greed into account.

I have to wonder the same thing. 20% isn't that much. This explanation doesn't really hold water for non-exclusives. They make more off of exclusives sales because of the price difference. Even at 45%. Why take even more from the contributors that can't increase their earnings? Also, they say 76% of exclusives won't lose. What percent of their contributors are exclusive?

« Reply #22 on: September 09, 2010, 14:37 »
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That's the DT approach, and it works well. A buyer doesn't buy a contributor or a canister, but an image.
I would love to see something like the DT image levels on Istock
It's a sustainable solution since on level 1 (at entry) images, they can recuperate the review costs and the database overhead. As the image goes up in levels, the marginal cost will become lower for the site. Thomson was right, the IS model was unsustainable in the long run but he addressed it the wrong way, both for IS and for its contributors.

« Reply #23 on: September 09, 2010, 15:11 »
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The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

They will continue to drop the % for non-exclusives until they all leave (or work for free).  In the process they will drive exclusives down also to 20% like the rest of Getty and throw a few unreachable goals to keep the mice turning the wheel.

Once that is done, the door to iStock will be exclusive only and 20% (or less starting out).

That is my prediction.  Only time will tell.

As others have said, its not about "losing" money or being about to "sustain" the business; its about their long term (or short) goals and how they can get there.

« Reply #24 on: September 09, 2010, 15:13 »
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I posted a topic on my idea, continue discussing it there:
http://www.microstockgroup.com/istockphoto-com/royalty-structure-idea/

Don't want to hijack this thread.

« Reply #25 on: September 09, 2010, 15:15 »
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Why couldn't Istockphoto just leave their 20% as a base and added more to contributors with more yearly sales? I am sure that would have been fine with most people. And it wouldn't make them "less profitable". Simple as that. If you don't take greed into account.

I have to wonder the same thing. 20% isn't that much. This explanation doesn't really hold water for non-exclusives. They make more off of exclusives sales because of the price difference. Even at 45%. Why take even more from the contributors that can't increase their earnings? Also, they say 76% of exclusives won't lose. What percent of their contributors are exclusive?

My guess is that they put the screws to independents in hope that exclusives would feel better about what's happening to them.  It's a kind of "Don't Raise the Bridge; Lower The River" approach to supplier relations.  "You think you have it bad?  Hah!"  Didn't work, though.

« Reply #26 on: September 09, 2010, 15:38 »
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Their business modell is not working - they said it - because the royalty percentage of exclusives is contantly raising and it is too much for them now. I accept cuz I see why is it happening. So what they do? They cut the royalty of the independents even below the base level? Is this fair?

« Reply #27 on: September 09, 2010, 15:48 »
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Their business modell is not working - they said it - because the royalty percentage of exclusives is contantly raising and it is too much for them now. I accept cuz I see why is it happening. So what they do? They cut the royalty of the independents even below the base level? Is this fair?

Of course it's not fair. Twenty effing percent is grossly 'unfair' as it is. Why do you 'accept' them stating that their business model is not working? That is obviously utter bollocks too. The only thing that is 'unsustainable' is the insatable greed of Istock's management.

If you let them get away with this one then it'll just get even worse next year ... and so on.

« Reply #28 on: September 09, 2010, 15:50 »
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The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

They will continue to drop the % for non-exclusives until they all leave (or work for free).  In the process they will drive exclusives down also to 20% like the rest of Getty and throw a few unreachable goals to keep the mice turning the wheel.

Once that is done, the door to iStock will be exclusive only and 20% (or less starting out).

That is my prediction.  Only time will tell.

As others have said, its not about "losing" money or being about to "sustain" the business; its about their long term (or short) goals and how they can get there.

This is exactly how I see it, too.

ap

« Reply #29 on: September 09, 2010, 16:05 »
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The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

They will continue to drop the % for non-exclusives until they all leave (or work for free).  In the process they will drive exclusives down also to 20% like the rest of Getty and throw a few unreachable goals to keep the mice turning the wheel.

Once that is done, the door to iStock will be exclusive only and 20% (or less starting out).

That is my prediction.  Only time will tell.

if that is the case, it's in every photographer's interest to be proactive and promote other agencies to take istock's place.

« Reply #30 on: September 09, 2010, 16:09 »
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In the most basic terms that means that iStock becomes less profitable with increased success.

I've never heard that any company can become less profitable with increased success...

« Reply #31 on: September 09, 2010, 16:31 »
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In the most basic terms that means that iStock becomes less profitable with increased success.

I've never heard that any company can become less profitable with increased success...

I don't know much about stock but I guess when the royalties go down, it would be hard to raise right?...

« Reply #32 on: September 09, 2010, 16:51 »
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I just had a .16 sale there, I guess next year maybe I'll be getting .12 sales or something like that. ouch.

What is unsustainable is the bonuses for the executives. If they can't run their business with 80% of the take, that is pathetic. They really should be able to be profitable with 60%. I'd gladly trade with them... I hope they get reamed by their suppliers and buyers over this nonsense.

--=Tom

« Reply #33 on: September 09, 2010, 16:59 »
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Their business modell is not working - they said it - because the royalty percentage of exclusives is contantly raising and it is too much for them now. I accept cuz I see why is it happening. So what they do? They cut the royalty of the independents even below the base level? Is this fair?

Of course it's not fair. Twenty effing percent is grossly 'unfair' as it is. Why do you 'accept' them stating that their business model is not working? That is obviously utter bollocks too. The only thing that is 'unsustainable' is the insatable greed of Istock's management.

If you let them get away with this one then it'll just get even worse next year ... and so on.

Well, what I say might sound a bit dispassionate... but I belive it is true.
They know their business better. I accept what they say because it sounds logical. I can understand why do they want to change the current royalty stucture and I agee the direction they have choosen. I just don't like the numbers they attached to it. And I tell you why... because I don't mind/buy what a company tells. As I don't mind how they calculate my royalty... I do not mind if they make a lot more money on my images as I do. This is how the world goes. But there is one thing I do care, because it is the only real thing: how much income my whole portfolio is making for me in a months with that given agency. All the rest are just reasoning and complications.
I am worried cuz I think my income will be lower if they lower my royalty percentage. Yes, they will lower it for sure cuz there is no chance I'll reach that 1,4mil credits. But who does?
Currently all the other agencies are going up while IS is going down when I look at my monthly figures (from the very 1st place they felt back to the 3rd) and this is not a good sign together with a royalty decrease.
« Last Edit: September 09, 2010, 17:02 by NitorPhoto »

« Reply #34 on: September 09, 2010, 17:07 »
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WE ARE NOT HELPLESS WE HAVE THE MEDIA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!  PLEASE ALERT YOUR LOCAL MEDIA!!!!!!!!!!!!!!!  EVERY   VOICE COUNTS!!!!!!!!!!!!


http://news.cnet.com/8301-30685_3-20015830-264.html?part=rss&subj=news&tag=2547-1_3-0-20&refresh=1284065078008

http://techcrunch.com/2009/06/24/microstock-photography-is-getting-big-istockphoto-projects-200-million-in-revenues/


eheheeh I will call TVI (portuguese tv channel) :P

« Reply #35 on: September 10, 2010, 02:54 »
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I've never heard that an agency takes even greater percentage of earnings from their partners (in this case contributors) just because a "joint business" is growing....
« Last Edit: September 10, 2010, 02:56 by borg »

RT


« Reply #36 on: September 10, 2010, 03:45 »
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But there is one thing I do care, because it is the only real thing: how much income my whole portfolio is making for me in a months with that given agency.

This is my way of thinking also.

« Reply #37 on: September 10, 2010, 04:41 »
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The facts that there wasn't any reference to the change in yesterday's Contact Sheet for contributors, and that no more answers have been provided in the forum, could indicate they could be planning some softening changes (and that wouldn't be a fast or easy task, because they should satisfy many people, newbies, veterans, independants, exclusives without losing some increase in their margins, as they pretend).

But maybe I'm wrong.
« Last Edit: September 10, 2010, 04:43 by loop »

« Reply #38 on: September 10, 2010, 04:53 »
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The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

They will continue to drop the % for non-exclusives until they all leave (or work for free).  In the process they will drive exclusives down also to 20% like the rest of Getty and throw a few unreachable goals to keep the mice turning the wheel.

Once that is done, the door to iStock will be exclusive only and 20% (or less starting out).

That is my prediction.  Only time will tell.

As others have said, its not about "losing" money or being about to "sustain" the business; its about their long term (or short) goals and how they can get there.

+++++1  And we have a winner!
The sad irony is they are modeling the profitable segment of their business after the unprofitable segment.  They don't care about losing non-exclusives or the casual contributor because they are planning on doing their "crowdsourcing" through Flickr.

lagereek

« Reply #39 on: September 10, 2010, 06:56 »
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AND??  what future exclusive ( unless lobotomized) do you think is going to trust any agency acting in this way when their heads could be on the block next time?

forget it,  Getty wants more money, its as simple as that. There are many, many Diamond independants raking in a fortune to IS!  now if they were to force them out, they would obviously go somewhere else, increasing the competition even more, i.e. one companys loss is another ones gain.

You might think IS, is stupid but I dont think theyre insane.

RT


« Reply #40 on: September 10, 2010, 07:07 »
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The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

Exclusivity in RF means nothing these days, the images on Getty's main site aren't all exclusive and haven't been for a long time, I can't see any reason why they'd want iS as an all exclusive agency.

I agree with lagereeks statement "Getty wants more money"

« Reply #41 on: September 10, 2010, 07:54 »
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The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

Exclusivity in RF means nothing these days, the images on Getty's main site aren't all exclusive and haven't been for a long time, I can't see any reason why they'd want iS as an all exclusive agency.

I agree with lagereeks statement "Getty wants more money"

OK Getty wants more money.  They don't want to pay more than 20% to any contributor.  They want to maintain the illusion of Exslcusivity for marketing purposes and therefore need to maintain some spread between exclusive and non-exclusive content.  They aren't trying to get rid of independent contributors; they just don't care if they keep them.
Seriously there are major parts of this decision that seem to defy logic.

« Reply #42 on: September 10, 2010, 08:39 »
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What's this "Agency" stuff? Is it top drawer work or crap that Getty can't sell elsewhere. Also, is the royalty locked in at 20% or above for these new contributors, forcing IS to claw it back from their current slaves? Whenever I see something like this I wonder at the back story...having listened to years of corporate speak I know the top suits only ever give you a scratch and sniff, never the real thing.

« Reply #43 on: September 10, 2010, 09:00 »
0
The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

They will continue to drop the % for non-exclusives until they all leave (or work for free).  In the process they will drive exclusives down also to 20% like the rest of Getty and throw a few unreachable goals to keep the mice turning the wheel.

Once that is done, the door to iStock will be exclusive only and 20% (or less starting out).

That is my prediction.  Only time will tell.

As others have said, its not about "losing" money or being about to "sustain" the business; its about their long
term (or short) goals and how they can get there.

I feel that you are correct. This is probably the ultimate goal.

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #44 on: September 10, 2010, 22:38 »
0
The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.
They will continue to drop the % for non-exclusives until they all leave (or work for free).  In the process they will drive exclusives down also to 20% like the rest of Getty and throw a few unreachable goals to keep the mice turning the wheel.Once that is done, the door to iStock will be exclusive only and 20% (or less starting out).That is my prediction.  Only time will tell.
As others have said, its not about "losing" money or being about to "sustain" the business; its about their long term (or short) goals and how they can get there.

I'd agree with this. They now can move the goals whenever they want. And the goals won't be going down.

« Reply #45 on: September 11, 2010, 03:17 »
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The facts that there wasn't any reference to the change in yesterday's Contact Sheet for contributors, and that no more answers have been provided in the forum, could indicate they could be planning some softening changes (and that wouldn't be a fast or easy task, because they should satisfy many people, newbies, veterans, independants, exclusives without losing some increase in their margins, as they pretend).

But maybe I'm wrong.
I think they were just afraid that even more people would know about it. Not everyone reads the forums.

RacePhoto

« Reply #46 on: September 13, 2010, 00:22 »
0
In the most basic terms that means that iStock becomes less profitable with increased success.

I've never heard that any company can become less profitable with increased success...

The people who wrote "Getty wants more money" are right, but here's their logic, which I understand but like you, can't agree with on the whole. It's flawed math as well.

The more that we make sales, if someone is an exclusive, the higher percentage the artists get, so more sales means lower percentages for Getty. However, as you pointed out, increased sales also mean more profits, even if they are at a lower rate. So their unsustainable rhetoric is pure BS. They make up the difference on volume! The problem is that people are making money and selling images (hey interesting concept, isn't that what we're supposed to do and the original claim?) but because they are reaching the higher canisters over time, Getty's cut is going down. Remember they are getting more sales volume, more income, just that they are forced to share a little higher percentage.

Independents don't count for anything, There are few exceptions, but IS and Getty couldn't care less if Ind. stay or leave. At 15% it's obvious that Getty isn't trying to enhance artists interests with potential profits. The message they are sending is, you can leave or stay, we don't care enough to pay you more than 15%!

Think about it for a minute. If independents were of value to IS, they would be encouraging us with income potential, not driving us away with lower commissions.

« Reply #47 on: September 13, 2010, 01:58 »
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The point is simple.  They are working on trying to make iStock exclusive only and pay 20%.

Exclusivity in RF means nothing these days, the images on Getty's main site aren't all exclusive and haven't been for a long time, I can't see any reason why they'd want iS as an all exclusive agency.

I agree with lagereeks statement "Getty wants more money"

Well, but Getty results, with this formula, aren't and haven't been for years good at all. Maybe the should stick with the formula that really works.

RT


« Reply #48 on: September 13, 2010, 04:53 »
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Well, but Getty results, with this formula, aren't and haven't been for years good at all. Maybe the should stick with the formula that really works.

What do you mean their results haven't been good for years?

« Reply #49 on: September 13, 2010, 05:15 »
0
Well, but Getty results, with this formula, aren't and haven't been for years good at all. Maybe the should stick with the formula that really works.

What do you mean their results haven't been good for years?

Well I think they have faced financial trouble and operating at loss, the same as Corbis and others. Actually it would be better Getty copying the formula of istock, than viceversa (what they tend to do now).

RT


« Reply #50 on: September 13, 2010, 05:33 »
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Well I think they have faced financial trouble and operating at loss, the same as Corbis and others. Actually it would be better Getty copying the formula of istock, than viceversa (what they tend to do now).

Don't believe all the hype you read, they are certainly not suffering any financial trouble or operating loss regards their trading figures, last year on sales of over $850m they made a gross profit margin of 72.7% and an EBITDA of 32.6%, H&F certainly wouldn't have paid $2.4b to buy a company that was in financial trouble, the trouble you read about, the same that iStock are now reporting, is a result of the greedy 'merchant bankers' wanting to line their pockets and spending more than they can afford to, it has nothing to do with the companies actual operating profit.

« Reply #51 on: September 13, 2010, 06:58 »
0
In the most basic terms that means that iStock becomes less profitable with increased success.

I've never heard that any company can become less profitable with increased success...

The people who wrote "Getty wants more money" are right, but here's their logic, which I understand but like you, can't agree with on the whole. It's flawed math as well.

The more that we make sales, if someone is an exclusive, the higher percentage the artists get, so more sales means lower percentages for Getty. However, as you pointed out, increased sales also mean more profits, even if they are at a lower rate. So their unsustainable rhetoric is pure BS. They make up the difference on volume! The problem is that people are making money and selling images (hey interesting concept, isn't that what we're supposed to do and the original claim?) but because they are reaching the higher canisters over time, Getty's cut is going down. Remember they are getting more sales volume, more income, just that they are forced to share a little higher percentage.

Independents don't count for anything, There are few exceptions, but IS and Getty couldn't care less if Ind. stay or leave. At 15% it's obvious that Getty isn't trying to enhance artists interests with potential profits. The message they are sending is, you can leave or stay, we don't care enough to pay you more than 15%!

Think about it for a minute. If independents were of value to IS, they would be encouraging us with income potential, not driving us away with lower commissions.

As much as I disagree with their proposed changes, the little bit of truth in their message is that IS's cut (of exclusive authors' work) is going down over time no matter how much volume they produce.
There could even be the case of the volume of an author (or a group of authors) decreasing but their share still be going up.
And this is because cannister levels and therefore commission percentage is based on total download numbers and thus on history - and not on current performance.

And exactly that they are changing with the proposed model - you will be promoted only if your current volume goes up, irrespective of your history.

I could accept such a concept as a good means to promote active contributors who continue to provide quality work. But where they failed completely (besides communication) is setting the goalposts.

And the cut for non-exclusives is in no way explainable by the same logic, as there has never been any chance to increase your percentage.
If they implemented a similar scheme for non-exclusives starting at 20% and giving us the chance to move up, there would have been a lot of cheering from the independents...

« Reply #52 on: September 13, 2010, 07:39 »
0
In the most basic terms that means that iStock becomes less profitable with increased success.

I've never heard that any company can become less profitable with increased success...

maybe you haven't read business section in the last 40 years...success doesn't always lead to profits, although I'm not sure that this is the case here

« Reply #53 on: September 13, 2010, 07:46 »
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Well I think they have faced financial trouble and operating at loss, the same as Corbis and others. Actually it would be better Getty copying the formula of istock, than viceversa (what they tend to do now).

Don't believe all the hype you read, they are certainly not suffering any financial trouble or operating loss regards their trading figures, last year on sales of over $850m they made a gross profit margin of 72.7% and an EBITDA of 32.6%, H&F certainly wouldn't have paid $2.4b to buy a company that was in financial trouble, the trouble you read about, the same that iStock are now reporting, is a result of the greedy 'merchant bankers' wanting to line their pockets and spending more than they can afford to, it has nothing to do with the companies actual operating profit.


Quite the opposite.  They were bought because they were in financial trouble and the takeover company figured they could add value to the company by installing a new management, altering it and fixing it.  And I'm pretty sure you are wrong: getty's stock price was falling through the floor making it a good target

« Reply #54 on: September 13, 2010, 07:47 »
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As I see on iStock forum, "revolution" is over. Now prepare to change you avatar in Japan flag...

« Reply #55 on: September 13, 2010, 08:09 »
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Not sure about that still people making the 'no confidence' vote and clients talking of going elsewhere  

plus I doubt we have heard the full story as yet so best button down for further eruptions
« Last Edit: September 13, 2010, 08:10 by iclick »

RT


« Reply #56 on: September 13, 2010, 10:34 »
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Well I think they have faced financial trouble and operating at loss, the same as Corbis and others. Actually it would be better Getty copying the formula of istock, than viceversa (what they tend to do now).

Don't believe all the hype you read, they are certainly not suffering any financial trouble or operating loss regards their trading figures, last year on sales of over $850m they made a gross profit margin of 72.7% and an EBITDA of 32.6%, H&F certainly wouldn't have paid $2.4b to buy a company that was in financial trouble, the trouble you read about, the same that iStock are now reporting, is a result of the greedy 'merchant bankers' wanting to line their pockets and spending more than they can afford to, it has nothing to do with the companies actual operating profit.


Quite the opposite.  They were bought because they were in financial trouble and the takeover company figured they could add value to the company by installing a new management, altering it and fixing it.  And I'm pretty sure you are wrong: getty's stock price was falling through the floor making it a good target

I'd be interested to see where you got that information from? I can't find anything to suggest they were bought because they were in financial trouble and was just going by their reported financial figures which show exactly what I've indicated above, it also showed their share price had been maintaining a steady level until Dec 07 when it dropped, which by strange coincidence is just before the company was sold to H&F.

iStockphoto were bought by Getty but at the time they weren't in financial trouble, they were sold as an alternative to raising venture captial in order to expand.

Corbis like Getty is now (under H&F management) are a privately owned company and don't report their figures, again I see a lot of people speculating but haven't seen any hard evidence.
« Last Edit: September 13, 2010, 10:41 by RT »

« Reply #57 on: September 13, 2010, 11:45 »
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I'd be interested to see where you got that information from? I can't find anything to suggest they were bought because they were in financial trouble and was just going by their reported financial figures which show exactly what I've indicated above, it also showed their share price had been maintaining a steady level until Dec 07 when it dropped, which by strange coincidence is just before the company was sold to H&F.

You have to be kidding Richard. Getty's share price had dropped 73.5% in the two years before they sold out. The shareholders were grateful to grab H&F's cash to stem their own losses. There were no counterbids to H&F's offer.

http://www.forbes.com/2008/02/25/getty-hellman-friedman-update-equity-cx_md_0226-markets33.html

Istock wasn't sold to 'raise capital to expand'. It was sold to put $50M in Bruce's back-bin.

« Reply #58 on: September 13, 2010, 12:23 »
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Slightly OT (my apologies), but I am wondering for what period of time Mr. Bruce's no compete clause was for?

Maybe it is high time that 'Bitter' got back into the game and give Getty a black eye.

« Reply #59 on: September 13, 2010, 12:29 »
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Slightly OT (my apologies), but I am wondering for what period of time Mr. Bruce's no compete clause was for?

Maybe it is high time that 'Bitter' got back into the game and give Getty a black eye.

So he can sell us down the river again in a few years time?

RacePhoto

« Reply #60 on: September 13, 2010, 12:29 »
0

There could even be the case of the volume of an author (or a group of authors) decreasing but their share still be going up.
And this is because cannister levels and therefore commission percentage is based on total download numbers and thus on history - and not on current performance.

And exactly that they are changing with the proposed model - you will be promoted only if your current volume goes up, irrespective of your history.

I could accept such a concept as a good means to promote active contributors who continue to provide quality work. But where they failed completely (besides communication) is setting the goalposts.

And the cut for non-exclusives is in no way explainable by the same logic, as there has never been any chance to increase your percentage.
If they implemented a similar scheme for non-exclusives starting at 20% and giving us the chance to move up, there would have been a lot of cheering from the independents...

True and true, except when they started, they promised that with hard work, people could rely on a steady flow of income and increased commissions, based on long term volume sales. Not that people would be credited on current year sales only, which is quite a change. Part of the low pay program was a chance to move up and make more in the future. Now they are reversing years of work and taking away what people have worked hard to earn!

As for the independents. that's where I'm from and it makes no sense, no reason why they would cut an already low 20%, down to 15% because of some mythical "unsustainable" problem. What's the problem with making 80% off everything that non-exclusives send in? :( The answer is, someone just decided to give all the independents a 25% cut in the already minimal pay.

Can we reopen the "I'm going to be an exclusive next year" thread where the numbers were going up from 22% to 25% exclusive. Are we looking at exclusives dropping to under 20% of the contributors. Hey, nice move IS. First cut the exclusives, screw their hard work for years, so they change to independent and at the same time, cut the independents so they make less. Double dip in chopping earnings, all at the same time.

There's the plan. Alienate everyone, but increase the profits.

« Reply #61 on: September 13, 2010, 12:40 »
0
Slightly OT (my apologies), but I am wondering for what period of time Mr. Bruce's no compete clause was for?

Maybe it is high time that 'Bitter' got back into the game and give Getty a black eye.

So he can sell us down the river again in a few years time?

My guess is that he was lied to just as we were.
I don't think he intended this to happen to his 'baby'.
I suspect that the reason he bailed from IS, is that he foresaw these changes coming.

RT


« Reply #62 on: September 13, 2010, 13:07 »
0
I'd be interested to see where you got that information from? I can't find anything to suggest they were bought because they were in financial trouble and was just going by their reported financial figures which show exactly what I've indicated above, it also showed their share price had been maintaining a steady level until Dec 07 when it dropped, which by strange coincidence is just before the company was sold to H&F.

You have to be kidding Richard. Getty's share price had dropped 73.5% in the two years before they sold out. The shareholders were grateful to grab H&F's cash to stem their own losses. There were no counterbids to H&F's offer.

http://www.forbes.com/2008/02/25/getty-hellman-friedman-update-equity-cx_md_0226-markets33.html


Interesting article and I agree it does state the drop in share price, however I stand by what I've always said about the company operating profits and that they were not operating at a loss:

http://www.advfn.com/p.php?pid=financials&btn=annual_reports&mode=&symbol=NYSE%3AGYI

Check out the 5yr trends, especially the total net income!


Istock wasn't sold to 'raise capital to expand'. It was sold to put $50M in Bruce's back-bin.


Personal opinion aside, according to interviews with Bruce Livingstone and Patrick Lor:

iStockphoto was able to support its operations for many years from the revenue generated by photo sales. However, during business planning in late 2005, the company realized that they needed about $10 million to meet their future growth expectations, including $3 million for hardware expansion costs. With this new capital requirement, the iStockphoto management team sought venture funding for the first time. After securing a term sheet from a VC, management became hesitant that this was the best option for the company. The team feared that they would not be able to maintain product control or nurture the community in the same fashion that iStockphoto had been built upon. Thus Bruce decided to seek other options, and contacted Jonathan Klein, CEO of Getty Images. After some positive conversations regarding company strategy and cultural fit, iStockphoto was sold to Getty Images in February 2006 for $50 million in cash. This represented a valuation substantially higher than the valuation placed on the company by the proposed VC investment. Hence the sale to Getty Images made both financial and cultural sense for Bruce and the rest of the iStockphoto team.
« Last Edit: September 13, 2010, 13:09 by RT »

« Reply #63 on: September 13, 2010, 13:54 »
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^^^ Oh no, Getty weren't actually operating at a loss but the trend for sales and profits was decidly south and lots of redundancys had taken place too.

I read Brucie's spin at the time but it doesn't really make sense to me. If he'd had full confidence in the company's future he surely wouldn't have sold his own stake? Maybe he bottled it or maybe he had no choice in the matter. If he didn't own more than 50% of the shares it could have sold by those that did __ that happens all the time (especially when VC's are involved).

RT


« Reply #64 on: September 13, 2010, 14:03 »
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Who wouldn't have made the same choice, you start a company that does well, you want to expand and talk to some VC about getting $10-15m, then after some business advice from a 'friend' who's in the industry they turn round and offer you $50m in the hand for your company with a sugar coated turd about how you can stay on and guide the business along the ethos in which you started it, after a while you realise they couldn't give a toss about your ethos, so you pack up and leave, a little bit upset but extremely rich.
« Last Edit: September 13, 2010, 14:09 by RT »

Microbius

« Reply #65 on: September 13, 2010, 14:07 »
0
Slightly OT (my apologies), but I am wondering for what period of time Mr. Bruce's no compete clause was for?

Maybe it is high time that 'Bitter' got back into the game and give Getty a black eye.

That sell out MF can bite me. If I never hear his name again it'll be too soon.

« Reply #66 on: September 13, 2010, 14:50 »
0
That sell out MF can bite me. If I never hear his name again it'll be too soon.

+1

alias

« Reply #67 on: September 13, 2010, 15:07 »
0
That sell out MF can bite me. If I never hear his name again it'll be too soon.
+1

It's sad that someone would say that. Thanks to Bruce Livingstone and his friends there are more opportunities to become involved in selling stock.

None of the other sites would have existed either.

lisafx

« Reply #68 on: September 13, 2010, 15:24 »
0
Here's the funniest, and most accurate account of what has actually happened that I have read, posted by Kelvinjay - fourth post down:

http://www.istockphoto.com/forum_messages.php?threadid=253522&page=77

Hopefully it won't be a problem if I repost it here? 

"You don't seem to be taking the hint. They've F'd us in the A, rolled over, farted and are reaching for their cigarettes. They don't want some cosy post coital chat. They're just hoping you will realise how embarrassing the whole situation is, take the couple of dollars they've left on the bedside table, get dressed and do the walk of shame."

« Reply #69 on: September 13, 2010, 15:26 »
0
Getty was in trouble.  Analysts downgraded them over and over.  Got bought out because they couldn't thrive at all.

New competent owners controlled their direction, bought iStock for growth.  Bottom line, they win.  They made the company better, maybe marginally, maybe more.  Don't try to spin this as anything else as a takeover to fix operations, make the company profitable and spin around.  iStockphoto just became part of that plan when they realized that it would help make it all work even more.

« Reply #70 on: September 13, 2010, 15:34 »
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Slightly OT (my apologies), but I am wondering for what period of time Mr. Bruce's no compete clause was for?

Maybe it is high time that 'Bitter' got back into the game and give Getty a black eye.

how many people would support a new agency that paid 20%, I dont see him paying anymore than that

lagereek

« Reply #71 on: September 13, 2010, 15:50 »
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IS,  is the only company within the Getty sphere that shows any profit. Further,  its totally naive to think that all this global mayhem is because of such a small thing as exclusivity.
If exclusivity was the case,  all Getty would have to do is to say: look guys you get six month to either go exclusiv or get out. They did that in the film days, long before they bought IS.
Its been said before,  exclusivity in an RF world with some 100 million files floating around everywhere?  well judge it for yourself:  it means absoloutely nothing. It sound good, doesnt it and especially if youre a buyer.
IS,  is a good company that at the moment is getting chronically short-changed by Getty who in their turn is getting short-changed by these Hellman bankers or whatever.
Its the turning of the screw.
« Last Edit: September 13, 2010, 15:52 by lagereek »

« Reply #72 on: September 13, 2010, 15:53 »
0
IS,  is the only company within the Getty sphere that shows any profit. Further,  its totally naive to think that all this global mayhem is because of such a small thing as exclusivity.
If exclusivity was the case,  all Getty would have to do is to say: look guys you get six month to either go exclusiv or get out. They did that in the film days, long before they bought IS.
Its been said before,  exclusivity in an RF world with some 100 million files floating around everywhere?  well judge it for yourself:  it means absoloutely nothing. It sound good, doesnt it and especially if youre a buyer.
IS,  is a good company that at the moment is getting chronically short-changed by Getty who in their turn is getting short-changed by these Hellman bankers or whatever.
Its the turning of the screw.

independents are the reason i can have my exclusivity - so thank you - because if you guys didn't bring down the average royalty, i wouldn't be so lucky to get what I get. 

Microbius

« Reply #73 on: September 13, 2010, 15:55 »
0
That sell out MF can bite me. If I never hear his name again it'll be too soon.
+1

It's sad that someone would say that. Thanks to Bruce Livingstone and his friends there are more opportunities to become involved in selling stock.

None of the other sites would have existed either.
It sad that someone would sell out his contributors to a company with a track record for buying out and butchering the competition, but there you go.
P.S. many of his "friends" are the ones getting corn-holed by Getty right now

lagereek

« Reply #74 on: September 13, 2010, 16:05 »
0
IS,  is the only company within the Getty sphere that shows any profit. Further,  its totally naive to think that all this global mayhem is because of such a small thing as exclusivity.
If exclusivity was the case,  all Getty would have to do is to say: look guys you get six month to either go exclusiv or get out. They did that in the film days, long before they bought IS.
Its been said before,  exclusivity in an RF world with some 100 million files floating around everywhere?  well judge it for yourself:  it means absoloutely nothing. It sound good, doesnt it and especially if youre a buyer.
IS,  is a good company that at the moment is getting chronically short-changed by Getty who in their turn is getting short-changed by these Hellman bankers or whatever.
Its the turning of the screw.

independents are the reason i can have my exclusivity - so thank you - because if you guys didn't bring down the average royalty, i wouldn't be so lucky to get what I get. 

I know and if you  guys didnt exist I wouldnt earn 50 times that much,  so Im very greatful indeed.

« Reply #75 on: September 13, 2010, 18:46 »
0
Here's the funniest, and most accurate account of what has actually happened that I have read, posted by Kelvinjay - fourth post down:

http://www.istockphoto.com/forum_messages.php?threadid=253522&page=77

Hopefully it won't be a problem if I repost it here? 

"You don't seem to be taking the hint. They've F'd us in the A, rolled over, farted and are reaching for their cigarettes. They don't want some cosy post coital chat. They're just hoping you will realise how embarrassing the whole situation is, take the couple of dollars they've left on the bedside table, get dressed and do the walk of shame."


Must be the best post I have ever read over there! How bang on can an analogy be!

« Reply #76 on: September 13, 2010, 18:51 »
0
Here's the funniest, and most accurate account of what has actually happened that I have read, posted by Kelvinjay - fourth post down:

http://www.istockphoto.com/forum_messages.php?threadid=253522&page=77

Hopefully it won't be a problem if I repost it here? 

"You don't seem to be taking the hint. They've F'd us in the A, rolled over, farted and are reaching for their cigarettes. They don't want some cosy post coital chat. They're just hoping you will realise how embarrassing the whole situation is, take the couple of dollars they've left on the bedside table, get dressed and do the walk of shame."


Must be the best post I have ever read over there! How bang on can an analogy be!


That's too funny...right on the nose.

RT


« Reply #77 on: September 13, 2010, 19:22 »
0
Getty was in trouble.  Analysts downgraded them over and over.  Got bought out because they couldn't thrive at all.

New competent owners controlled their direction, bought iStock for growth.  Bottom line, they win.  They made the company better, maybe marginally, maybe more.  Don't try to spin this as anything else as a takeover to fix operations, make the company profitable and spin around.  iStockphoto just became part of that plan when they realized that it would help make it all work even more.

You need to do some reading up, firstly read the link I posted, Getty were not in trouble, their shares fluctuated but the company was operating on a decent profit and had been for the previous five years, share prices go up and down for reasons beyond whether a company is in profit or not (have a look at Sony Erricsons latest q results, 200% up in profit and yet their shares have just fallen).

You might want to learn what the term 'spin' means also. Ironic though because to correct your statement the new competent owners you mentioned didn't buy iStock, it was bought by Getty two years before H&F then bought Getty.

Unfortunately the Getty/iStock figures are not published by H&F anymore, probably why the iStock CEO came out with that 'spin' in response as to why they're lowering commissions.
« Last Edit: September 13, 2010, 19:27 by RT »

« Reply #78 on: September 13, 2010, 19:55 »
0
Can someone confirm my bad dreams.
Somehow I think that first founder dady Getty in his days was blackmail by mafia, and after that he made Getty foundation to avoid blackmail. After few decades somehow foundation was on free market?! and bought by the same mafia covered by suspicious venture capital. I dont know if it is H&F or some hidden investors under H&F.
If it is true this means that hidden mafia guys are black mailing Getty again and raping them more and more every year. Now Getty is like goose without feathers and now It is turn to rape iStock to feed mafs....
And that is all about...
Only in this case I will somehow understand this mess what is on iStock this days

Can somebody verify my bad dreams  :-\

« Reply #79 on: September 13, 2010, 23:09 »
0
Getty was in trouble.  Analysts downgraded them over and over.  Got bought out because they couldn't thrive at all.

New competent owners controlled their direction, bought iStock for growth.  Bottom line, they win.  They made the company better, maybe marginally, maybe more.  Don't try to spin this as anything else as a takeover to fix operations, make the company profitable and spin around.  iStockphoto just became part of that plan when they realized that it would help make it all work even more.

You need to do some reading up, firstly read the link I posted, Getty were not in trouble, their shares fluctuated but the company was operating on a decent profit and had been for the previous five years, share prices go up and down for reasons beyond whether a company is in profit or not (have a look at Sony Erricsons latest q results, 200% up in profit and yet their shares have just fallen).

You might want to learn what the term 'spin' means also. Ironic though because to correct your statement the new competent owners you mentioned didn't buy iStock, it was bought by Getty two years before H&F then bought Getty.

Unfortunately the Getty/iStock figures are not published by H&F anymore, probably why the iStock CEO came out with that 'spin' in response as to why they're lowering commissions.

I guess i will expect you to be writing for the wall street journal soon and some textbooks too because i guess an 80% reduction in stock price doesn't mean any company is in trouble.  F&^K you guys just believe whatever you want.  If the market is saying that your stock isn't worth 100$ a share anymore and your market value is 20% of what it once was, there's something wrong. Just because it posts profits doesn't mean that make it a good situation.  Getty could be bleeding cash (whcih has nothing to do with profits) and that could have made them a huge gamble to stay afloat at the time .  Those profits could have been unrecognized revnues from previous years.  DOn't try to school me on financial statements - Getty was taken over because it was a viable target to buy and resell - no capital firm goes and buys a company at the top of its game.  They are specialized management firms with the intention of adding value through their operations management and strategy.  Ive read way more strategy books than I need to not to eat the s#it you're trying to feed me

RT


« Reply #80 on: September 14, 2010, 04:55 »
0
Ive read way more strategy books than I need to not to eat the s#it you're trying to feed me

I'm not trying to feed you anything, just trying to point out that misquoting events and claiming a company was operating at a loss when in actual fact it wasn't and providing the figures to prove that obviously aren't enough for you, try and get your facts right in the future it will benefit everyone.

 

« Reply #81 on: September 14, 2010, 06:01 »
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I think it is quite clear that Getty was in a big decline when they were taken over and I presume that was mostly caused by the availability of cheap images on the microstock sites.  They purchased istock but the damage had been done and istock profits couldn't replace the lost profits from Getty.  There were also a lot of rival sites.

This is my speculation.  Perhaps the strategy was to raise istock prices so high that buyers would return to Getty?  They also needed to take away the microstock subscriptions.  Wouldn't we know if they had made an offer for shutterstock?  Perhaps there are competition rules that stopped them?  That would explain thinkstock, designed to take customers from the other subs sites.  The strategy seems to of failed so far, buyers have left istock for the other microstock sites.  If they really wanted thinkstock to work, they shouldn't of paid the lowest subs commissions.

There have been so many changes with istock, I can't help but think "if it ain't broke, don't fix it".  It feels like there is a lot of desperation to make all these changes, probably to sell off Getty and istock for a profit but they could end up with a company that is worth less than they paid for it.

« Reply #82 on: September 14, 2010, 06:27 »
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It feels like there is a lot of desperation to make all these changes, probably to sell off Getty and istock for a profit but they could end up with a company that is worth less than they paid for it.

Oh yes __ Istock/Getty is undoubtedly being fattened for the market. Come March next year H&F will have owned Getty for 3 years, about the average time that a PE outfit likes to turnaround an investment.

I strongly suspect that the numbers suggest that the image market may be nearing it's peak of growth (possibly beyond), at least in terms of profitability, and that holding on any longer is unlikely to add much value to their investment.

If Istock was really 'your baby' and you were in it for the long-term would you really have risked losing all those exclusives and demotivating so many contributors for just a few extra percentage of profit today? I wouldn't.

I will be very surprised if H&F are still the owners of Istock/Getty by the end of 2011.

lisafx

« Reply #83 on: September 14, 2010, 10:48 »
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Oh yes __ Istock/Getty is undoubtedly being fattened for the market.

Absolutely.  This is the only explanation that makes any sense at all to me.  It's clear that the long term health of the company is being jeopardized in favor of short term profits. 

RT


« Reply #84 on: September 14, 2010, 12:33 »
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I will be very surprised if H&F are still the owners of Istock/Getty by the end of 2011.

They'll have sold the main part of Getty, but they'll keep iStock because by then all the independents plus the top crowns will have left and the remaining exclusives will be on 5% commission safe in the knowledge that money doesn't make them happy, they'll occasionally get an email ending in 'you guys rock' which will give them a warm feeling of belonging to a community.
« Last Edit: September 14, 2010, 13:58 by RT »

« Reply #85 on: September 14, 2010, 12:52 »
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Interesting article and I agree it does state the drop in share price, however I stand by what I've always said about the company operating profits and that they were not operating at a loss:

http://www.advfn.com/p.php?pid=financials&btn=annual_reports&mode=&symbol=NYSE%3AGYI

Check out the 5yr trends, especially the total net income!


Year end date       2003   2004   2005    2006    2007
Total net income    64.0   106.7   149.7   130.4   125.9
Revenue per share  9.13   10.25   11.78   13.65   14.40

« Reply #86 on: September 14, 2010, 17:05 »
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Still no word from Kelly or anyone else on the multitude of good questions regarding the changes, like why non-photographers are being treated differently in the royalty structure, and why we were promised something when supposedly everyone at HQ knew they wouldn't be able to come through with it. Bewildering and jarring shift in the contributor/owner relationship. Unfortunately their silence, and the three (3!) posts that didn't answer a single question, point to this being the new status quo. :-\

On a related note, I've had a project in the works that I think many here will be interested in. I felt that the iS forum wasn't an appropriate place to post this, so hopefully here is OK. If you're interested, send me an email at photodoer /at/ gmail.com, and I'll shoot you an email when it's completed. For now I'll just say that it's right up your alley.


 

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