I've been wondering this question for a while, so I figured I'd ask the mob. How much micro is too much micro? Should things cost a buck? 5 bucks? More?

iStock has always been one of my better agencies, but I've done better as they've raised prices. Shutterstock does well and is less expensive with subs, but they also seem to have more and more on demand. Not to mention that they have more EL's than all the agencies combined. I also have some midstock agencies that sell well at higher prices.

It just makes me wonder if the lower prices are even necessary, and what is the ideal price where volume meets revenue.

I sell at least as many level 4 and 5 images at Dreamstime as I do level 1 and 2 images. When I became emerald at fotolia and doubled my prices the sales weren't affected negatively in any way.  I sold more ELs at fotolia at 200$ as when they were 10$.
Conclusion,Price isn't terribly important to most buyers.

I think that the bottom 10%(? my guess) of the client base could be sacrificed, and prices could be raised and the bottom line would still be greater than it is now. I  had a quick look at SS, my EL and on demand money usually exceed the sub money for and given period. So what if you said, the heck with subscriptions, not even raised prices, those on subs would still buy images, maybe not as many but I'll bet the bottom line would be greater than it is now.

it seems price is more important the less talent you have 

Dan Heller's article about pricing:

http://www.danheller.com/blog/posts/myth-that-microstock-agencies-hurt.html

This is wrong question. Better is "how badly needs client my picture?" and "how much competition on the same topic is out there?" - if client urgently needs some special picture, price (except some insane requests) is not an issue. If there is HUGE competition, eg. micro copycats, you generally cant ask too much.
But regarding micro - clients really do NOT care if picture costs them $1 or 50c. Why? I live in central Europe, graphic designer charges aprox $40-60 per hour. What does it mean? That one sigle minute of searching picture often costs them MORE then the picture itself! In fact you have small chance to find suitable image on micro within one minute, so the price is not really an issue here. Macrostock charging $300 for green apple photo is of course extreme - another extreme is micro charging $0.5-$5 for pictures which required 10 models, pricy location and hour of postprocess.

Quote from: caspixel on March 15, 2011, 13:41

Something to consider...if pricing really was so unimportant, microstock would never have gotten as big as it has and a lot of people would never have been able to sell their photos successfully because they never would have been able to break into the RM club.

I agree that when you compare micro to traditional pricing it makes a massive difference, but within the typical micro spectrum I think we'd see higher returns with prices at the top end.

Well, yes, of course. That goes without saying...provided you are getting a decent royalty percentage and the price the person pays per credit is not 50 cents or less.

Sorry I'm not sure my last post was clear, what I meant was that I don't think sales numbers would take a significant hit from a price rise as long as prices were still within the micro spectrum. Of course once you are getting up to and above the $100 mark you are pricing out a lot of buyers and will see a hit on overall returns.

I agree.

I think iStock is trying to find the pricing sweet spot for Micro. They probably will. They want to corner the market with top tier exclusive shooters so their incentive commission reflects that. They have all the buyers and now they want the best shooters that are exclusive. It is an interesting model they are tweaking. Getty taught them alot. I also think they want to get rid of the junk amateur shooters. About 80% of all micro is pretty weak IMO. Even mine.