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Author Topic: Fotolia sells 50% stake in business  (Read 23576 times)

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« Reply #50 on: May 17, 2012, 06:03 »
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It might be good for us if all the sites were owned by greedy investors that kept lowering commissions.  We would eventually have to do something about it.  I'm tired of this long slow death of microstock.  At some point we are going to have to get together and do something or forget about making money from microstock.

I still think if we all withdrew from sites that paid less than 50% commission, everything would change.  Buyers will go to wherever they can find what they need.  We have the lifeblood of the sites and some of them have taken it for granted that we will supply them whatever they do.  Some people have left sites but it would have to be a big coordinated effort to make a real change.  Just imagine how the valuation of sites would change if their suppliers left and buyers moved elsewhere.  It might seem impossible but it could be much easier to do than we think.

If you (or someone else) could organise this then it would make a difference, but its not going to happen. When Istock pulled the RC move most people couldn't even stop uploading let alone delete their ports. I stopped uploading for awhile but resumed when it was obvious that all was happening was I was disadvantaging myself. It isn't like the train company goes on strike and there is an immediate effect.

If you could get people to pull their ports it would make an effect but for some people this is like asking people to resign from their job.

How do you organise a group of people spread across the world you don't even know ? Its not like you've got to cross a picket line. You don't have to work in a crew with the people you didn't back up in the fight for fair pay and conditions.    

My take is that we'll need to carefully keep control of costs for shoots if you want to keep being involved seriously in microstock. The return will be reduced by the agency cuts and competition down to the level where it becomes unprofitable for alot of shoots. The only way to make profit will be to be able to produce the best balance between quality and production cost. Lots of people trying to earn a living will move onto other things as the effective hourly rate for their efforts simply won't be worth it.  (I believe this is already happening). I hope I'm wrong. People who have more talent will be able to make a higher effective hourly rate for their work.

Have we already seen the peak in production costs for shoots ? Is it profitable now for the factories to do those mega team shots with 30-40 models hiring out a whole office building ?

People who microstock is something on the side for them supplying only 10's of percentage of their total income will continue on living the microstock dream.


Microbius

« Reply #51 on: May 17, 2012, 06:28 »
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The only way would be a Union, that would allow for collective bargaining. No one would have to take the risk of stopping uploads alone and being the only one left hanging.
A Union could go in there saying, our Union members own X million best selling images and will collectively withdraw them if you don't start offering higher commissions.

I also think it is a long shot that this will ever happen, but if it was the way to start is by someone collecting names of people who commit to sign up anonymously, so that action cannot be taken by agencies against individuals while the list is being drawn up.
Then when there are x million images owned by Union members, only then take any action.

« Reply #52 on: May 17, 2012, 06:46 »
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The only way would be a Union, that would allow for collective bargaining. No one would have to take the risk of stopping uploads alone and being the only one left hanging.
A Union could go in there saying, our Union members own X million best selling images and will collectively withdraw them if you don't start offering higher commissions.

I also think it is a long shot that this will ever happen, but if it was the way to start is by someone collecting names of people who commit to sign up anonymously, so that action cannot be taken by agencies against individuals while the list is being drawn up.
Then when there are x million images owned by Union members, only then take any action.

How about forming a "fairstock" contributor. You submit images via some portal that combines them into a single contributor account and automatically submits to the non-evil agencies. The combined collective would (in a perfect world) secure a better deal because they had control of 100,000's of high selling files and could actually have some clout. (15 uploads per week limit at Istock could be a problem ;))

Who runs it, who's funds it, makes decisions on what is fair or acceptable,accounting, distributing funds etc. all too hard for me.

I don't know what the critical amount of files would be to actually hold some power. 20% of the sales ? $1m in revenue ??

« Reply #53 on: May 17, 2012, 06:53 »
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A union isn't the only solution.  Although it's been tried before and failed, developing a professional organization for stock artists (this time one that includes everyone) would be another solution.  Legislation, court challenges to the one-sided, all-or-nothing contracts, etc. would also have an impact.  I'd rather see that kind of an effort than collective bargaining or "strikes" (and no, I'm not anti-union), because I think it has a better chance of getting us somewhere.  Collective bargaining only works with cooperation between the two parties, and we don't have that with most of these companies.

We do, however, have the ability to pool our resources and hire an attorney to examine our contracts and this situation where the microstock companies are in full control of the percentages of how much money they and we receive from our images.  I've always found it odd that we allow these companies to control and determine the percentages of the royalties for property they don't own (seems backwards), and I'm starting to get really pi$$ed seeing all these vulture capitalists swooping in and demanding more of MY money earned from MY investments just so they can pay off increasingly larger debts and obligations to outside investors.   

helix7

« Reply #54 on: May 17, 2012, 07:19 »
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The only way would be a Union...

That always comes up in these discussions, but probably will never happen and even if it did, I would probably never get involved. I'm not really the joining type.

The one and only thing I can imagine shaking things up and forcing other companies to take notice would be the emergence of a new company that is contributor-run and has unprecedented support from the community. Something that has the right price point to lure buyers in, coupled with fair rates for contributors to motivate support and full-portfolio uploading. Honestly I think it could look something like StockFresh, only with some good money behind it to ramp up marketing quickly. I think SF has the best pricing in the business and a good rate for contributors. They just didn't start out with enough money to ramp up fast enough. They also didn't have the full support of the community, having come from the whole Getty/Jupiter deal and leaving some folks feeling like they couldn't trust the new StockXpert.

A contributor-run company like this would have the trust of the community and could very quickly build up a multi-million-image collection. With the money in place to quickly market the business, they might even start to take buyers away from other companies. With the right marketing and advertising plan, of course. One that I think needs to go for the jugular. BigStock's "iStuck" taken to the next level.

With the full support of the contributor community, with every independent artist throwing their support and recommendation behind this new company, I think things could change.

It's probably a long-shot that it will ever happen. It would take millions of dollars to start up a company like this. But I'm hopeful, even optimistic that we'll see a company like this some day. I had a conversation with someone about this, a guy who actually has the kind of money needed to do it. He's not pursuing it, but someone like him will. And I think that will be a game-changer. A company like this would force the others to sit up and take notice.

« Reply #55 on: May 17, 2012, 07:31 »
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I think well-intentioned efforts to create "fair" agencies are almost always doomed to decay into crowdshafting. It happened with iS, then Fotolia emerged as the photographer's friend. Even with the big daddy of all photo stock co-ops, Magnum, I saw someone complain that he had been fiddled out of being paid on the grounds the honour of them having his images should be enough (I don't know if that was true or just bragging).

A photo co-op will always have insiders at the centre of it and if it grows the newbies will find they don't get as good a deal as the old guard. That's a function of human nature.

helix7

« Reply #56 on: May 17, 2012, 07:34 »
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I wasn't necessarily suggesting a co-op. More of a contributor-owned business. Something with one (or a few) contributors involved who know what it's like to be a contributor and are less likely to so easily turn around and screw the rest of us.

Wim

« Reply #57 on: May 17, 2012, 08:45 »
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I'm surprised you guys haven't thought of creating your own agency yet. I'm even surprised Yuri took this long. I think we have enough qualified/experienced people around here to make it happen, technically and financially. The best features from every site. 
Oh well, just thinking out loud lads, don't mind me.

« Reply #58 on: May 17, 2012, 08:47 »
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I'm surprised you guys haven't thought of creating your own agency yet. I'm even surprised Yuri took this long. I think we have enough qualified/experienced people around here to make it happen, technically and financially. The best features from every site. 

Oh yeah, it's been "thought" of.  It's easy to think of it.

« Reply #59 on: May 17, 2012, 08:49 »
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I'm surprised you guys haven't thought of creating your own agency yet. I'm even surprised Yuri took this long. I think we have enough qualified/experienced people around here to make it happen, technically and financially. The best features from every site. 

Oh yeah, it's been "thought" of.  It's easy to think of it.

Lol   ;D

« Reply #60 on: May 17, 2012, 10:40 »
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what agency will follow SS, FT moves? thats why I love stock really, I dont need much money to be happy too  ;D

p.s: thanks for sharing the new and the video too, appreciated it
« Last Edit: May 17, 2012, 10:47 by luissantos84 »

grp_photo

« Reply #61 on: May 17, 2012, 11:08 »
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I agree that everyone should have his own agency, there will be no immediate results but buyers use more and more Google for image-searching if they find the images that they are looking through smaller agencies than this a win for us because it weakens the position of the biggies. It's a little investing in the beginning (but you can have a very good site easily under 1000,- dollars) once it up it costs nearly nothing to host and keep it running it's just a few dollars a month.

« Reply #62 on: May 17, 2012, 11:14 »
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I wonder how would the value of agencies drop if Shutterstock would come up with possibility of going exclusive with them with reasonable royalties. I think that it would destroy many of agencies.

That might even be something I would consider.

This comes up every so often, and it's just never going to happen. Their model doesn't support any more money without raising prices, and when you're promoting your key business proposition (read the S-1) as huge selection with fair prices, I don't see how they can be thinking of a switch to higher pricing for unique images.

« Reply #63 on: May 17, 2012, 11:43 »
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Quote
giving Fotolia an enterprise value of $450m.
.....
The deal values Fotolias equity at about 10 times earnings before interest, tax, depreciation and amortisation

Apparently Apple, with all their wonderful products, intellectual property, cash mountain and the devotion of their customers, is currently trading at about 14x earnings. The idea of Fotolia ever trading (if they actually went public) at 10x earnings is utterly preposterous to me.

My portfolio currently earns about 3x more at SS as it does on FT so therefore I'd assume that SS might be worth about 3x the value of FT. More to the point SS are enjoying consistent growth whilst FT appear to be slipping badly, judging by my own sales and the reports of others, so I'd probably value SS at more like 10x the value of FT.

There's something about this story, the numbers being quoted, the $150M 'loan', etc that ... just seems more than a little weird to me.

Could this be a complex shuffling of the money prior to a sell out ... to SS?

antistock

« Reply #64 on: May 17, 2012, 11:59 »
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Whatever an agency does, WE will NEVER benefit!  the quicker we realize that, all the better,  saving ourselves lots of frustration and anguish.

exactly.
i keep telling everyone the only way to stay afloat in this business is by making a huge portfolio, anything else is B-S.
good or bad or good-enough, doesnt matter, it's all about big numbers nowadays.

antistock

« Reply #65 on: May 17, 2012, 12:05 »
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we're in the midst of yet another bubble, even bigger than in 2000 and 2001.

facebook soon launching its IPO for more than 100 billions, Groupon being valued tens of billions, Instagram being sold for 1 billion worth of Facebook stock, and now Pinterest getting 100 millions from crazy VCs ...

now, Groupon is losing tons of money and will never be profitable, facebook took many years to even become profitable but its net earning are barely 15% of what they spend and they're quickly losing users everywhere, Instagram never made a single dollar so far and so did Pinterest.

looking at the numbers, 600 for a very profitable company like Fotolia is money well invested in my opinion.
it's probably an answer to shutterstock's IPO and they certainly plan to go public as well.

in the next year or two most of the small micro agencies will be acquired by the big-4 agencies and the market will finally become yet another cartel and monopoly like RM in the past.

« Reply #66 on: May 17, 2012, 13:02 »
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My portfolio currently earns about 3x more at SS as it does on FT

Another question for you since as you are good at this :) -

SS earnings are more or less static according to the IPO despite all of the money they have been spending building revenue. So doesn't that mean that it has basically been costing them money to sell so many pictures - i.e. that greater sales do not necessarily add up to greater earnings ?

« Reply #67 on: May 17, 2012, 13:19 »
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My portfolio currently earns about 3x more at SS as it does on FT

Another question for you since as you are good at this :) -

SS earnings are more or less static according to the IPO despite all of the money they have been spending building revenue. So doesn't that mean that it has basically been costing them money to sell so many pictures - i.e. that greater sales do not necessarily add up to greater earnings ?

Well I noticed that SS also shoved nearly $10M extra into R&D last year. They must expect that to produce a return in the future and anyway, if they hadn't done so, then earnings would have been up nearly 50% irrespective of the additional money on marketing.

It may also be that SS sensed an opportunity, in the perceived weakness of their competitors, that made additional marketing worth the punt to grow market share. One thing's for sure is that SS are still very much operating the business for long-term growth rather than short-term profit __ quite unlike another microstock agency (or two) that comes to mind.

« Reply #68 on: May 17, 2012, 16:36 »
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The only way would be a Union...

That always comes up in these discussions, but probably will never happen and even if it did, I would probably never get involved. I'm not really the joining type.

That's kind of how I feel. I think I disagree with 100% of people on this forum about the "right" direction for microstock, so it would be hard to find a union to represent my interests.

« Reply #69 on: May 17, 2012, 16:49 »
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The only way would be a Union...

That always comes up in these discussions, but probably will never happen and even if it did, I would probably never get involved. I'm not really the joining type.

That's kind of how I feel. I think I disagree with 100% of people on this forum about the "right" direction for microstock, so it would be hard to find a union to represent my interests.

thats interesting, if I may ask you, what % of your income come from microstock beside your own agency? maybe you are becoming less and less dependent on agencies so you have different interests, that said I agree with 99% of your posts

helix7

« Reply #70 on: May 17, 2012, 16:59 »
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That's kind of how I feel. I think I disagree with 100% of people on this forum about the "right" direction for microstock, so it would be hard to find a union to represent my interests.

Haha... same here. Today especially is one of those days where I wonder why I'm here.

Don't be surprised if my username goes black some day soon. :)

« Reply #71 on: May 17, 2012, 17:08 »
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That's kind of how I feel. I think I disagree with 100% of people on this forum about the "right" direction for microstock, so it would be hard to find a union to represent my interests.

Haha... same here. Today especially is one of those days where I wonder why I'm here.

Don't be surprised if my username goes black some day soon. :)

honestly I dont understand why there is always huge "competition" between here and SS forum, why cannot people get along?

cool how we blame agencies when we cannot even talk with each other :o

WarrenPrice

« Reply #72 on: May 17, 2012, 17:19 »
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@ Luis ... I think we have a few who come here just to antagonize and argue; a few egotistical experts and a few who actually do know what they are talking about.

A lot of people who need to eat a Snickers Bar.  (maybe only makes sense in USA?)   ;D

« Reply #73 on: May 17, 2012, 17:28 »
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@ Luis ... I think we have a few who come here just to antagonize and argue; a few egotistical experts and a few who actually do know what they are talking about.

A lot of people who need to eat a Snickers Bar.  (maybe only makes sense in USA?)   ;D

you are spot on!

sure we cannot forget competition between us photographers/illustrators, thats our nature but we need to balance it, the real problem starts when our ego gets way bigger than it should ;D

« Reply #74 on: May 17, 2012, 17:54 »
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Everyone should pull all their images from Fotolia, and see how much it is worth then.

Ditto for istock - let them take 85% of nothing...


 

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