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Author Topic: Sales dropping. Istock especially.  (Read 62412 times)

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« Reply #200 on: October 24, 2011, 06:45 »
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It would be great if in a first step they remove the numbers, but leave the flames and then maybe a year after that, remove the flames as well. Customers are getting such high quality at superb prices, I sincerly doubt they will buy less if the numbers are not there.

I couldn't agree more, that way, ppl would only buy photos for their quality, not (also) numbers. It would also level the field for new contributors, it really gets on my nerves that old crap sells (I don't mind great old photos selling), just because of its number of DL (and lowers my DL numbers because of that). If that would be incorporated, I'm sure I'd double my sales over night at most sites.

Nothing that sells well is crap, from a stock photography perspective. Customers buy what they need. Maybe other photos deep in the search results would be useful to them, maybe not.


antistock

« Reply #201 on: October 24, 2011, 23:27 »
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20% just ask someone else if they would work for 20% commission on their own creative products, working hours and hours, doing everything including keywords and editing, uploading, and start into business knowing that. I bet you'll get screams of laughter, "Are you kidding?" But Microstockers are now down to 15% on IS in many cases. Oh please Sir can I have some more, why not make it 10%, I love licking boots for pocket change.

Not that I like 20% or less: I find it a bit insulting indeed.

But I know some of my friends working overtime as graphic designers doing creative work as employees for large advertising companies, and I doubt they earn more than 20% of their employers' revenue.

Given the same %, better being exploited part-time by a distant internet business than enslaved full-time by a real boss in the same room.

Apples and oranges. When I work for someone and they pay me an hourly wage or salary, or a flat fee, it has nothing to do with the final product or their earnings. Not my business.

I make photos and expect a fair percentage. 15% is not a fair percentage, even though they host, market and handle the billing. When I played in bands, the agents took 20% for booking and promotions. When I work the wholesale business I make a commission for sales, but when I stock and distribute myself, I get more. If the agencies stood up for us and protected us against unfair use or theft, I might be swayed a little. They don't do that, we have to wait two months for support to give us boilerplate answers or ignore the issues?

When our work gets stolen, they take the money back, instead of standing in back of their store integrity.

Even 20% is not a fair percentage when we are investing time and sometimes people pay for models, props, time, then we must edit and do the keywording, we take all the risk, investing up front, where an agency can refuse them? Then if we pass they take our work, sell it multiple times and pay us 20% of what it earns?

It's my work, my images and my income. They are just agents doing marketing for me. Of course people will point out, the agencies don't owe us anything (and I agree) and they don't really care about us, which I also agree. If I don't like it, I can go do something else!  :) I'd just be happier and more encouraged to produce more, working harder, if the returns were proportional to the efforts.

Some people think flipping burgers at McDonald's is a good job with advancement potential. Just like some people think making $10 a month at some tiny microstock site (competing with their own images elsewhere) is worth their time.

exactly !
but the sad truth is photos are HARD to sell nowadays, and we must accept this fact !

if they were selling like e-books for instance there would be no problem using the usual affiliate networks and give a 20-30% cut to the seller as they still do for e-books, training videos, tutorials, and much more.

instead we have agencies eating out up to 85% of the sale and guess why, because there are simply too many photos out there and clients aren't willing to spend much.

and that's nothing, try to market a photo-book about your city or your favourite subject and you're lucky to make 50 or 100 sales at all, they're expensive and you will need a big budget for advertising and you will be lucky to make a profit.

if you think stock sucks try print-on-demand...

t-shirts on the other side sell well if you know what you're doing, see the difference ?

« Reply #202 on: October 25, 2011, 07:01 »
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instead we have agencies eating out up to 85% of the sale and guess why, because there are simply too many photos out there and clients aren't willing to spend much.

That would only be accurate if they were incurring huge costs from carrying the stock of non-selling photos and therefore needed a big percentage cut to cover it. The reason for the percentage they take is something else.

antistock

« Reply #203 on: October 25, 2011, 08:02 »
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instead we have agencies eating out up to 85% of the sale and guess why, because there are simply too many photos out there and clients aren't willing to spend much.

That would only be accurate if they were incurring huge costs from carrying the stock of non-selling photos and therefore needed a big percentage cut to cover it. The reason for the percentage they take is something else.

of course, but do you think any agency would accept a meager 30% cut ?
i can't remember a single agency doing that, even Tony Stone started at 50% in the golden days of stock.

« Reply #204 on: October 25, 2011, 08:12 »
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of course, but do you think any agency would accept a meager 30% cut ?
i can't remember a single agency doing that, even Tony Stone started at 50% in the golden days of stock.

As has been mentioned before App stores generally take only 30% for providing a similar service (and make a very good profit whilst doing so). If anything app's are much more expensive for the agency to test/review before they go on sale.

michealo

« Reply #205 on: October 25, 2011, 08:32 »
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of course, but do you think any agency would accept a meager 30% cut ?
i can't remember a single agency doing that, even Tony Stone started at 50% in the golden days of stock.

As has been mentioned before App stores generally take only 30% for providing a similar service (and make a very good profit whilst doing so). If anything app's are much more expensive for the agency to test/review before they go on sale.

Online stock agencies should have much lower costs than traditional ones that had to mail out catalogs, etc
30% should be plenty to cover costs and provide a decent margin.

They are leaving their business model open to invasion by the major online players such as google, amazon, etc. These have bullet proof ballet sheets, excellent programmers, worldwide infrastructure.

lagereek

« Reply #206 on: October 25, 2011, 08:47 »
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just the beginning.
« Last Edit: October 25, 2011, 08:50 by lagereek »

RacePhoto

« Reply #207 on: October 25, 2011, 08:52 »
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of course, but do you think any agency would accept a meager 30% cut ?
i can't remember a single agency doing that, even Tony Stone started at 50% in the golden days of stock.

As has been mentioned before App stores generally take only 30% for providing a similar service (and make a very good profit whilst doing so). If anything app's are much more expensive for the agency to test/review before they go on sale.

Online stock agencies should have much lower costs than traditional ones that had to mail out catalogs, etc
30% should be plenty to cover costs and provide a decent margin.

They are leaving their business model open to invasion by the major online players such as google, amazon, etc. These have bullet proof ballet sheets, excellent programmers, worldwide infrastructure.

Thank you and when it happens, you know a flock of people will be dumping their entire collections onto the new sites. (sorry for the term but what else is it when someone has all the same images on 25-30 sites?)

What will happen is the new Mega-Agency will have relatively all the top people and their images, on the new site, in a matter of months. This could in effect turn Microstock upside down. The smaller (anything under 5 on the right...) agencies, paying 15-30% will be obsolete and quickly dissolve into history. At least that's one opinion.

If I was an active seller, I'd pull everything I had from everywhere that had low returns and move it where someone paid 50% or better. Wouldn't take much to make that decision. SS and the new place.  :D


So what you say is true. If one of the major players, Google would be a likely choice, decided to get into Microstock, I'd guess there would be a massive change in the marketplace in a matter of months.
« Last Edit: October 25, 2011, 08:54 by RacePhoto »

antistock

« Reply #208 on: October 25, 2011, 09:22 »
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amazon and google will never enter microstock, thanks god !
it's already an awful experience dealing with them for ebooks and advertising, imagine the mess they would make selling stock !

and why should they ? where is the money ? all indicators are showing microstock is a declining industry.

antistock

« Reply #209 on: October 25, 2011, 09:24 »
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of course, but do you think any agency would accept a meager 30% cut ?
i can't remember a single agency doing that, even Tony Stone started at 50% in the golden days of stock.

As has been mentioned before App stores generally take only 30% for providing a similar service (and make a very good profit whilst doing so). If anything app's are much more expensive for the agency to test/review before they go on sale.

yes but software is so much easier to sell compared to photos, that's why a 50% cut is reasonable for stock.

michealo

« Reply #210 on: October 25, 2011, 09:38 »
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of course, but do you think any agency would accept a meager 30% cut ?
i can't remember a single agency doing that, even Tony Stone started at 50% in the golden days of stock.

As has been mentioned before App stores generally take only 30% for providing a similar service (and make a very good profit whilst doing so). If anything app's are much more expensive for the agency to test/review before they go on sale.

yes but software is so much easier to sell compared to photos, that's why a 50% cut is reasonable for stock.

Why is software easier to sell than an image?

And to your earlier point the stock business is a $4 - $5 billion industry

« Reply #211 on: October 25, 2011, 09:39 »
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yes but software is so much easier to sell compared to photos, that's why a 50% cut is reasonable for stock.

Huh? How do you work that one out? They are both just a series of 1's and 0's. Software just tends to have a lot more of them. With photos customers can see exactly what they are buying, software can more of an unknown unless you give away a basic version for free. Software generally needs to be tested against a variety of operating systems, etc, etc, etc.

RacePhoto

« Reply #212 on: October 25, 2011, 09:55 »
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amazon and google will never enter microstock...


Maybe that could be "or" not "and" one of them might. Google more likely.

Never Say NEVER!

(anyone remember Romeo Void? 1981 - best played very loud...)  :D
Romeo Void - Never Say Never

« Reply #213 on: October 26, 2011, 14:30 »
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I think, but am not sure, she might have meant software sells more/better than stock photos.

While I'm not going to argue at all whether this is true, because I have no idea, this is indeed a huge part in the equation that you cannot ignore.  Sure, photo storage is cheap, but that further proves the point.  The main sources of overhead (guessing here -- server bandwidth, server maintenance, employees (coders, designers, businessmen, etc) ) do not vary much with each additional image added to the database.  Therefore the amount of money the company needs to take from a given sale varies perhaps nearly linearly with the total amount of sales.  Yes, photos and software are comparatively easy to sell.  Therefore necessary profit per sale is very correlated with total sales.

« Reply #214 on: October 26, 2011, 15:27 »
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... The main sources of overhead (guessing here -- server bandwidth, server maintenance, employees (coders, designers, businessmen, etc) ) do not vary much with each additional image added to the database.  Therefore the amount of money the company needs to take from a given sale varies perhaps nearly linearly with the total amount of sales.  Yes, photos and software are comparatively easy to sell.  Therefore necessary profit per sale is very correlated with total sales.

I think most of us would be both shocked and sickened if we ever saw the figures proving just how profitable microstock was ... for the big agencies. Most of them pay out on average about 30% commission, possibly quite a bit less, and I am quite sure that royalties are their biggest single cost by some margin. The next biggest will probably be marketing which is something that they can control the expenditure of. Bandwidth, storage, etc can surely only be fractions of a cent per image sold. We know this because years ago they all sold licenses for 50c or less and were highly profitable back then.

As an independent my average sale on IS this month produced $9.20 of revenue. I get $1.65 of that leaving $7.55 in Istock's back-bin. Somehow I doubt that bandwidth, storage and server maintenence accounted for very much of it.

« Reply #215 on: October 26, 2011, 15:30 »
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hm, but over 400 people, international offices and marketing, a legal department for ongoing copy right issues...sounds expensive to me.

We all saw how photoshelter failed after doing stock for only one year and they had excellent images and were well connected.

I am sure they are not living under the bridge, but I doubt the owners take a rolls royce to work. stock is a very competitive market.

« Reply #216 on: October 26, 2011, 15:36 »
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As has been mentioned before App stores generally take only 30% for providing a similar service (and make a very good profit whilst doing so). If anything app's are much more expensive for the agency to test/review before they go on sale.

Apps (and ebooks and music) help sell devices. It's a different model.


« Reply #217 on: October 26, 2011, 15:58 »
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hm, but over 400 people, international offices and marketing, a legal department for ongoing copy right issues...sounds expensive to me.

We all saw how photoshelter failed after doing stock for only one year and they had excellent images and were well connected.

I am sure they are not living under the bridge, but I doubt the owners take a rolls royce to work. stock is a very competitive market.

I'm pretty sure that IS count all their inspectors and part-time 'admin' staff within that quoted 'over 400 people' figure. It's certainly not 400 full-time staff __ although they could easily afford it anyway.

Working my own sales backwards I'd estimate that SS/BigStock have combined annual sales in the region of $200M. I heard last year (from one of their employees) that they had 150 people working in their NY office. Salaries, taxes and benefits for the staff are unlikely to exceed $10M. If they pay out an average of 30% royalties then that would amount to $60M. That still leaves $130M left over to pay the office rent, bandwidth, hardware, marketing, etc. The owner could probably afford to drive to work in a different new Rolls Royce every single day if he chose to do so although somehow I doubt that would be his choice of vehicle.

« Reply #218 on: October 26, 2011, 17:16 »
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Gostwyck, you've forgotten the interest and capital repayments on the cash GI borrowed to pay the owners a vast bonus for their overall cleverness. That must knock a hole in the balance sheet.
Then there's the administration fee to go to the the parent company, the dividend ... all sorts of financial transactions to be paid.
I think Photoshelter had a budget of about $4million for the year they were trying to run an agency. It's nothing compared with iStock.
(Ooops! Just realised you had switched to looking at SS. Still the iS situation deserves to be remembered)
« Last Edit: October 26, 2011, 17:19 by BaldricksTrousers »

« Reply #219 on: October 27, 2011, 01:03 »
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Yes I agree, the microstock market is probably really profitable.  Was just saying that the "well they sell more of item X, so can afford to take a smaller cut" is, in general, a valid argument.  Look at the automobile industry. Cars have an average profit margin of 3%.  3%!!

And if we're going to talk econ...

there's really not all THAT much speculation to go around.  We know getty bought istock for 50 million.  We know that companies do a breakeven analysis when making an offer to buy another company, ie 'in how many years will my investment break even'.  There are things like inflation and discount rate etc that factor into this equation, but it is all 'in the noise' compared to two variables: income stream of said investment, and amount of years they want to break even by.

I asked some MBA friends what a typical number of years is that a company wants to break even by, when purchasing another.  I got more info than I bargained for, like 'it depends on many things like istock's debt or marketshare or leveraging their product against getty's product' blah blah blah which severely convolute what this breakeven number would be, but the point is that all those things do still go into some formula which pops out a number.  They were reluctant to give me a range, but I asked whether 2-20 should cover all extremes of riskiness and conservativeness, and they seem to think it would.

That means istock was probably generating somewhere in the range 2.5 to 25 million in pure profit each year.  So yea, given how few execs it takes to run one of these, that's pretty profitable.

« Reply #220 on: October 27, 2011, 01:40 »
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all indicators are showing microstock is a declining industry
For the individual contributor yes. For the agencies no.

« Reply #221 on: October 27, 2011, 02:20 »
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Apps (and ebooks and music) help sell devices. It's a different model.
Having had some (profitable) experience in selling consumer-targeted apps (we called them "programs" then), I disagree. I'm talking 15-20 years ago. The secret of our success was, apart of being the first on the market with a USP, copy protection. I actually made a lot of money by selling the copy protection scheme exclusively to a very large publisher on the side. The scheme was based on a few extra bits written between the tracks of a floppy on a Unix workstation, something that the PC couldn't read under DOS/Windows. Then came the breakthrough of the iMac (that could make a bitwise copy of the floppies) and there went our sales... slowly but unavoidably.

The thing is that consumer products are copied like hell, whether it's legal, ethical or not. There are the bins (usenet binary groups), torrents and specialized sites. In gaming theory, the profit is maximal since they chance of getting caught is zero when you only watch/listen to the products in the privacy of your home while you don't have to pay for the product.
In the imagery business it's different, unless you use a stolen image as your screen saver or print it out for on the wall of your living room. As soon as an image is used on a web site or on a product, it's there to see and find for everywhere - and the new image recognition technologies make it easier and easier to find them. A small time blogger might get away with it, but a large company won't run the risk using a stolen image for just a few bucks.

Apps (if you are talking about iPhone/iPad apps) are so profitable to write, even for consumers, because Apple copy-protected in a way the whole i-business. There is no (simple) way to crack/download an app for Apple products without compromising the integrity of the device. There are many "reprogrammers and sim-unlockers" around in India and SE Asia but I didn't hear yet of one that had customers for "unlocking" an iPad, iPhone or even iPod. The owners of these things paid a premium price for their devices and they don't want it to be tinkered with.

That's why the business model of Apple is so profitable : vertical integration. In the hay-days of the Mac-Microsoft war, it was said that the PC was so successful in terms of quantity, not because the over-all quality of the framework, but because almost all PC software could be stolen unlike the one for the Mac. Writing a Mac app protects your investment in time and programming effort.

lthn

    This user is banned.
« Reply #222 on: October 27, 2011, 02:44 »
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all indicators are showing microstock is a declining industry
For the individual contributor yes. For the agencies no.

I find it quite amazing that after years and years most ppl still just can't make that distinction

« Reply #223 on: October 27, 2011, 06:49 »
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Apps (and ebooks and music) help sell devices. It's a different model.
Having had some (profitable) experience in selling consumer-targeted apps (we called them "programs" then), I disagree etc

No big deal and perhaps me not fully grasping your argument - but I do not see how what you have written about copy protection etc undermines the case that Apps (and ebooks and music) help to sell devices and therefore these markets represent a different model vs stock photos. I totally agree with you that copy protection and the verticals currently make it much more profitable to invest in the development of Apps for the Apple platform. Especially the verticals.

My point is that the different royalty structure (independent artists vs online retailer) makes sense when you take into account that the retailers (Amazon and Apple) are also in the business of selling physical devices (iPods, iPhones, iPads, Kindles). An attractive split (especially as the market emerges) encourages content onto their platforms and helps them sell hardware. The availability of content gives consumers a reason to buy Apple and Amazon devices - and captures them to some extent. Nobody knows how the split will vary over time as these channels become more established... but who would bet much on it moving further in favour of the artists unless new models compete effectively ?

antistock

« Reply #224 on: October 27, 2011, 08:13 »
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yes but software is so much easier to sell compared to photos, that's why a 50% cut is reasonable for stock.

Huh? How do you work that one out? They are both just a series of 1's and 0's. Software just tends to have a lot more of them. With photos customers can see exactly what they are buying, software can more of an unknown unless you give away a basic version for free. Software generally needs to be tested against a variety of operating systems, etc, etc, etc.

try by yourself, sell a software online, a small shareware for instance, and you can make money even just using Adwords.

by opposite try to sell your photos on your own web site and what are the options ? banners and text-links only work if you're a well known photographer, it's all been tried forever and unsurprisingly you don't see any ads about people selling photos, only agencies and usually only microstock agencies, not RM o others.

why ? because their clients are not many and need to be handles in a more and traditional expensive way .. exibitions, ads on paper magazines, newsletters, phone calls ..

it's not so much different from selling fine-art in galleries.

so how can you guys claim it's not much harder to sell photos online ? software is selling like hot cakes, photos don't !
no matter if they're both bits and bytes, that's not the point.

and don't think it's easy to sell prints too, it's hard, and it's hard also if you put the prints in a shop or sell them on the beach.


 

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