Author Topic: Percentage revisited (Read 3647 times)

ShadySue · « **on:** September 04, 2020, 12:02 »

I've been looking at ways of getting an online language tutor, and in looking at reviews, the most recommended site is one called italki. This is NOT an ad, I signed up, paid up and have had one lesson so far which was fine. So far, the 'system' is very impressive indeed (to me).

But in looking at the reviews, a number of reviewers felt that the site was ripping off the tutors. So I looked into it, and apparently they take 15% of the price of the lesson. The tutors set their own prices. Also there's a fixed 'admin' fee of IIRC $4.44 to users, which is (apparently, from what I've read) the same whether you pay $10 in advance or several hundred $$. Certainly I started off with $100 and paid $4.44.

So if they can (presumably) make loads of money with such 'relatively' small fees, why do stock agencies feel they 'have to' take such a huge proportion of our sales value? OK, they're not storing millions of images/clips, but they do have short videos from each of thousands of tutors, and as well as Skype, there's an option to have the lessons within their own 'video-conferencing' system, which AFAICS they don't charge extra for (I did my first-and-only lesson in Skype so I can't vouch for that).

Clair Voyant · « **Reply #1 on:** September 04, 2020, 13:38 »

Quote from: ShadySue on September 04, 2020, 12:02

So if they can (presumably) make loads of money with such 'relatively' small fees, why do stock agencies feel they 'have to' take such a huge proportion of our sales value?

I'd narrow it down to pure greed and the fact content creators accepted the subscription model at such ridiculous pricing and unilateral contracts.

Jo Ann Snover · « **Reply #2 on:** September 04, 2020, 13:51 »

Platforms are the new moneymakers - whether it's Uber, Fiverr, Apple's App store, GrubHub or any similar company. Given what stock agencies keep, 15% doesn't sound bad, but I'm not sure what value the site delivers exactly.

Developers are furious at Apple keeping 30%. I think Fiverr's take is 20%. Spotify and the whole ecosystem around musicians leaves the people who create the music and record companies with about 56% of the total (artists only getting a fraction of that)

https://www.rollingstone.com/music/music-features/streaming-platforms-keeping-more-money-from-artists-than-ever-817925/

This HBR article talks about why platforms fail, and it includes this quote: "The consumer, the producer, and the platform all win if the division of value works for everyone. But if one party gets insufficient value, then they have no reason to participate....A simple rule for platform managers is to take less value than you make, and share value fairly with all participants."0

https://hbr.org/2016/03/6-reasons-platforms-fail

(It'd be nice if the stock agencies took note of that)

This article talks about GrubHub leaving restaurants with barely enough to pay for the ingredients. Services are different from a product with materials costs, but as a tutor can only work a certain number of hours a day, it's possibly more analogous than stock agencies or music streaming

https://www.eater.com/2020/5/1/21243966/giuseppe-badalamenti-chicago-pizza-boss-shares-grubhub-earning-statement-on-facebook

This article on Spotify's model goes beyond the 30% cut Spotify takes. If a person buys a $10/month subscription and listens to only one artist's work, the artist doesn't get 70% of the $10. The subscriptions and streams are pooled, favoring some artists and penalizing others

https://www.theringer.com/tech/2019/1/16/18184314/spotify-music-streaming-service-royalty-payout-model

I guess the bottom line for me is that the percentage is only part of the story, but for any of these platforms to work long term, it has to (a) create value and (b) divide up that value fairly

Pauws99 · « **Reply #3 on:** September 05, 2020, 01:48 »

The simple answer is "because they can". These platforms are relatively new. I would expect them to follow the same lifecycle as all crowd sourcing enterprises...when more people see the opportunity and pile in the margins for suppliers will decrease. The trick is to get in early.

alex_n · « **Reply #4 on:** September 05, 2020, 02:11 »

How to boil a frog alive? - Slowly

Those 'ripping' 15% will go far beyond in five to ten years. Slowly.

Quote from: ShadySue on September 04, 2020, 12:02

But in looking at the reviews, a number of reviewers felt that the site was ripping off the tutors. So I looked into it, and apparently they take 15% of the price of the lesson. The tutors set their own prices. Also there's a fixed 'admin' fee of IIRC $4.44 to users, which is (apparently, from what I've read) the same whether you pay $10 in advance or several hundred $$. Certainly I started off with $100 and paid $4.44.

Roscoe · « **Reply #5 on:** September 05, 2020, 02:54 »

Quote from: ShadySue on September 04, 2020, 12:02

why do stock agencies feel they 'have to' take such a huge proportion of our sales value?

Simple: because they can.

Despite schrinking RPD's, databases of agencies kept on growing.

Uncle Pete · « **Reply #6 on:** September 07, 2020, 06:26 »

Because there are 300,000 people with cameras, anywhere and everywhere, taking photos of anything and everything, and uploading. There aren't as many qualified, smart, tutors, or people willing to teach. Just like why illustrators get paid more than photographers and video makes more than still photos.

Supply and Demand, plain and simple. The agencies pay less, because they can.

Justanotherphotographer · « **Reply #7 on:** September 07, 2020, 08:23 »

We have no control over the platforms who have huge monopoly power. Before anyone comes in with the "they aren't monopolies there are loads of agencies", I am talking about monopoly power in the sense it was always understood before regulatory capture became near universal in the US (look into Bork).

One side is completely setting the terms here. It is the Uber-isation of the internet and we aren’t the only ones suffering. Look at YouTube creators etc.

It doesn’t matter how much supply there is, as long as middlemen completely control the delivery system they will fleece us as much as they possibly can (whether there are 100 of of or 10000). I can’t see a realistic solution given the lack of any solidarity in the contributor base and the near zero change of meaningful regulation given my first point above.