We talk a lot on this site about money, royalty rates, raises and more money. That said, we don't always have a clear vision of what those raises or royalty rates should be. If we are going to ask for a raise, shouldn't we have a clear vision of what we want and what we can realistically get? So, I thought I'd take a look at it and try to start a conversation. Warning: There will be MATH!

Let's say you make $1500 a month from agencies that pay you on average 30% (you probably wouldn't include agencies that already pay you 50%). I know these aren't necessarily your numbers, but they are fairly round numbers to work with. So with those numbers, that means the agencies get $3500 and you get $1500 for a total of $5000 in sales a month.

It also means that for every extra percentage point you get, it's an extra $50 a month. So at 31%, you make $1550. At 35%, you make $250 more a month (or $1750 total). Not bad. What about subs? If you get 30% of the sub price paid as well, then that is about 1 cent for every percentage point increase. (It was about $.008 for 25 cent subs and $.0125 for 38 cent subs. 1 cent seemed like a good average). I know subs aren't a firm percentage, but SS seems to average out to something similar.

OK, so there are the basic numbers. The bare minimum raise would be 1 percentage point and a 1 cent raise on subs that results in $50 extra a month (from the example). The maximum would probably be getting 50% royalty which would be a $1000 more a month with subs that cost 20 cents more (again, from the example). That last one sounds awesome, but I might have better luck getting them to throw a free unicorn in.

With all that said, what do you think is fair and realistic to ask for?

Good luck with that! Realistically the microstock company would be looking to give us a decrease so they can get even more profits. 

 

I'd love for iStock to give me a raise from 20% to 25%, which would still be lower than what Shutterstock pays out, and for Shutterstock to at the very least offer a higher subs tier for people who make a certain amount. I'd prefer that over the expensive Christmas card I got from them last year.

But really, in the real world reps take 20% and the artists get 80%, so even 50% is pretty sad.

at least you got a Christmas card 

I would like Shutterstock to pay an increase for images over 20 megapixels. As it stands now, it's more beneficial to downsize images below 16 megapixels to increase approval chances and show a super size version of your image.

They say they don't want us to downsize images, but their policies don't back it up. It takes more investment and skill to produce extra large images, and I think the earnings should reflect that.

Right. Shutterstock needs to act. They are losing ground anyway...for me it is almost more profitable to produce for sites like alamy. Their model is outdated. Sadly, they are currently one of the most ignorant places when it comes to contributors interests (not communication).

Almost more profitable to submit to alamy???

Yes. Beyond the usual commercial stock stuff I have various niche subjects.

Those sell on SS in three years about 20 times as a sub and with lots of luck one or two higher SODs or ELs averaging in a total revenue of about 8 - 13 $ in three years per niche image (statistically checked on about 20 samples).

I am not only on Alamy but on various higher priced sites like this. Sales are fewer but there are good chances that one or another of those niche images sells in these three years and brings on one sale an average revenue of 122 $ (not per image, thats the average per sale). As you see, if just one in 10 is selling it is about on par with shutterstock and chances are good that more will sell and thus outperform shutterstock.

In the beginning I was very hopeful that the micro market will evolve, bring collections, raise prices for quality or niches etc. None of this happened. As a consequence I stopped uploading niche material to micro. Not worth the effort. I stick with the usual selling concepts.

The MSG community really has lost its way if it thinks a royalty raise is coming from any of the agencies.

Quote from: stock-will-eat-itself on July 13, 2014, 12:49

The MSG community really has lost its way if it thinks a royalty raise is coming from any of the agencies.

we can have a dream right 

Yeah, nothing will probably come of it, but there is something to be said for taking that first step of "What do we want?".

That was sort of the point of this thread, although less about a far off dream and more about something that is achievable. To have a more firm goal that you think you might actually be able to accomplish if you get enough people behind it. Even if that goal is only a couple cents extra on subs.

Quote from: stock-will-eat-itself on July 13, 2014, 12:49

The MSG community really has lost its way if it thinks a royalty raise is coming from any of the agencies.

we can have a dream right 

I am sure there are slaves all over the world that think the same thing.

50% is not unrealistic, we just have to realize that the without our content the sites will have nothing at all to sell.

Realistically ... we may as well ask for the moon.  We've got abut as much chance of that as anything else from these tightwad agencies.  Five years ago we might have had a chance of working something out.  But no more.  Our leverage has gone to zero, at least insofar as the bigger agencies are concerned.  Best to be looking for other sources of income to replace what we have lost and will be losing.

MSG is completely toothless as a tool of leverage. Its good at informing of royalty reductions dodgy deals and partnerships but it doesn't have any purpose other than howling at the wind.

I don't know about that. Yes, there are a lot of discussions that are just talk, but there is also a lot that happens here as well. You aren't going to win every battle, but it's still worth occasionally fighting them. I can't say that I started this thread as a rallying cry for change though. I just thought it would be an interesting discussion.

I think the situation is a little more complex than asking for more money - or a higher percentage. If you don't consider other factors - primarily the buyer's price, but also investment in the site, marketing and growing buyer services - you end up with a situation like Dreamstime where the amount you earn per download goes up but the downloads go down and you end up with a similar amount of money each month just distributed differently.

I think that agencies looking for opportunities to charge more for certain services - versus just upping the price for everything - could bring us all additional income.

There's a big if - if they share the new revenue with us equitably. Part of the problem in our current setup is that agencies are close to opaque in disclosing terms and royalty rates. Shutterstock is exhibit A in this with the lack of details about their various higher priced licensing options - I like that I earn more, but I don't like that I haven't a clue what is being sold (I complained about this at the time, but SS just says that these vary or cite bogus privacy concerns). Another example is that extended licenses are sold at multiple prices but we get a flat rate regardless of price, thus reducing our percentage of the total on the higher priced options.

The only other comment is that withholding content - certain types or all new - or removing content is the only way to get agency attention. They won't offer anything or deal more favorably with contributors unless they aren't getting something they want.

And 50% of nothing (or next-to-nothing) is still an uninteresting result.

I'm not sure that there is much we can realistically ask for from the big companies at this point. We have to remember that these companies were built and have grown on the long-standing financial culture of microstock paying out far less than fair royalties. A lot of these companies, Shutterstock among them for sure, couldn't survive if they paid us more. And that doesn't make it right or ok that they pay as little as they do, it's just a reality of the business today.

That said, it doesn't mean that we need to accept low percentages from every new company. Some of them seem to believe that because some older established company pays out 30% then they can get away with it as well. Fortunately not many people are buying what these new companies are selling, as was seen when a video company came around here recently and was promptly snubbed by most folks because they only offered 30% to contributors.

Going forward, I think that setting a new kind of standard is our best bet. We likely will never change what companies like Shutterstock, iStock, Fotolia, etc., pay us. And they can't pay us more unless they drastically change their internal company culture to allow more room in the budget for us. Again, not likely to ever happen.

I'm a big proponent of change in this business brought on by pressure from startups. And there are a ton of areas in which I think startups can (and already do) compete with the big boys. I've seen small companies launch features that no other stock company has figured out yet. Better ways to communicate with buyers, promote new products, and as it relates to this conversation, do it all while paying fair royalties. Some as much as 70%. Small companies can prove that you can innovate, grow, profit, and still pay fairly.

So just imagine what happens when a small company emerges that pays well, truly innovates and develops exciting new technologies and features, search tools that work and are actually helpful, gives buyers what they want (highly useful stock assets at fair prices) while creating huge contributor interest from both existing microstock artists and also (and probably more importantly) from top artists who have stayed out of this because of the poor royalties. That's how new companies can compete with (and possibly beat) the existing big companies.

So in the context of this discussion and what we should ask for, I think that going forward it should be more about setting a new standard for new companies. That's an area where we can make a difference. Getting the old companies to change just because we ask them to isn't going to do much. But if they see new companies emerging and gaining the support of a wider range of contributors, including contributors that those old companies can't get because they pay too little, then they may be forced to change to keep up with these newer companies.

The number I've kicked around here as the bare minimum I'll accept from a new company is 50%. I'm sticking by that personal standard. It's 50% or don't bother asking for my work. I don't even care what the pricing looks like just yet. We can get to that later. If a company wants to even start a conversation with me about getting me on as a contributor, that conversation starts with 50% minimum. More if you really want to get my attention and support.

I just read a short article in Popular Photography about microstock. Sean Locke has a quote in it. In a nutshell, good for students who want beer money, but a killer to the serious contributors royalties. Sad.

That's kind of where I disagree. The money is definitely still there and can still be made. It's just harder because it is being funneled away from contributors with poor pricing and poor royalty rates. These things are all fixable, but there isn't much incentive for them to be fixed.