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Author Topic: What is the point of credits?  (Read 4124 times)

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« on: October 10, 2011, 06:53 »
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Why have a pseudo currency for buying stock photos when almost everything else you buy on the internet is a simple real currency transaction?  I note that SS deals in actual money.


microstockphoto.co.uk

« Reply #1 on: October 10, 2011, 07:03 »
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Because with credit packs, special offers, weird conversions between credits and different currencies, credits bought in one currency and redeemed in another one, different rate in buying or redeeming credits, it's easier to pay contributors even less than official - already low - percentages. Injecting noise in the system is everything to win unnoticed.
« Last Edit: October 10, 2011, 07:14 by microstockphoto.co.uk »

« Reply #2 on: October 10, 2011, 07:16 »
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Because with credit packs, special offers, weird conversions between credits and different currencies, credits bought in one currency and redeemed in another one, different rate in buying or redeeming credits, it's easier to pay contributors even less than official - already low - percentages. Injecting noise in the system is everything to win.

I agree. The more smoke and mirrors added into the equation, the less people will be able to track their own hard-earned money.

« Reply #3 on: October 10, 2011, 07:30 »
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Because with credit packs, special offers, weird conversions between credits and different currencies, credits bought in one currency and redeemed in another one, different rate in buying or redeeming credits, it's easier to pay contributors even less than official - already low - percentages. Injecting noise in the system is everything to win unnoticed.

That's one part of the story.
The other part is that sites don't want the overhead of massive amounts of small payment transactions (one dollar each...). And customers, who need more pictures may not want that as well.
And: Credit packages are a good way to make customers spend money they otherwise wouldn't spend. I'd like to know what amount of credits bought is not used over the long term. At best this is additional profit for the agency, at least is it an interest-free loan.

RacePhoto

« Reply #4 on: October 10, 2011, 08:25 »
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Someone may be paying 50c a credit, someone else $1 a credit and someone else 2 Euro a credit. (total fabrication, but you get the idea) They can sell special packages and have discounts or give "free" credits. Simple enough there's no one to one relationship with any currency or value.

I also agree with the smoke and mirrors factor so we are kept in the dark about what's really going on with our work and sales.
 

« Reply #5 on: October 10, 2011, 09:13 »
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Because with credit packs, special offers, weird conversions between credits and different currencies, credits bought in one currency and redeemed in another one, different rate in buying or redeeming credits, it's easier to pay contributors even less than official - already low - percentages. Injecting noise in the system is everything to win unnoticed.

That's one part of the story.
The other part is that sites don't want the overhead of massive amounts of small payment transactions (one dollar each...). And customers, who need more pictures may not want that as well.
And: Credit packages are a good way to make customers spend money they otherwise wouldn't spend. I'd like to know what amount of credits bought is not used over the long term. At best this is additional profit for the agency, at least is it an interest-free loan.

Whatever about conspiracy theories, all it seems to do is muddy the waters, adding complexity for no good reason.  I take your point but its just as easy to buy a package of x images  for y dollars or euro as to buy z credits and then spend it on x images...

« Reply #6 on: October 10, 2011, 09:15 »
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Mostly I think it started as a way to eliminate lots of little transactions and to reward/encourage large purchases of credits. The smoke and mirrors is just a bonus for sites like Fotolia that play exchange rate games etc. etc. (or for DT that pay lower %ages for different level pics).

Slovenian

« Reply #7 on: October 10, 2011, 09:30 »
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Prices should be raised to 5$ for XS and so on and there wouldn't be any more problems with small payment transactions (there's really few of those that'll just buy a single XS). Subs packs also cost more as most ppl would consider as a small payment;)

« Reply #8 on: October 10, 2011, 09:33 »
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Mostly I think it started as a way to eliminate lots of little transactions and to reward/encourage large purchases of credits. The smoke and mirrors is just a bonus for sites like Fotolia that play exchange rate games etc. etc. (or for DT that pay lower %ages for different level pics).

Agreed.  Also, it creates a disconnect - you may be more likely to spend 10 "credits" then 10 dollars, as well as being able to raise the credit prices in addition to raising what the credits can purchase.

« Reply #9 on: October 10, 2011, 09:36 »
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Credit packages are a good way to make customers spend money they otherwise wouldn't spend. I'd like to know what amount of credits bought is not used over the long term. At best this is additional profit for the agency, at least is it an interest-free loan.

This is what I always assumed. They want each customer to spend at least $10, but they don't want to raise the price of the minimum purchase to $10.

« Reply #10 on: October 10, 2011, 10:58 »
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Credits can go unused and the EXPIRE. Cash never expires. Credits work out well for the agencies.

Essentially it's a way to decouple the "currency" of a site from the currency of the shopper. Tinkering a few percent with credits is easier, and you can skim here and there without anyone noticing. Any site in any industry will benefit from using a "currency" of it's own creation/choosing to subtly manipulate.

« Reply #11 on: October 10, 2011, 11:15 »
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When I first signed up with iStock they accepted BitPass currency as well as purchasing their own credits. I think the initial issue was credit card fees on small transactions were a huge problem. People were thinking there would be various solutions for digital currency for small transactions but it wasn't clear who was going to end up with the winning solution.

Now, it is a great way to ensure customer loyalty and make money on the spread (currency and time) but I don't think it started out that way.

RacePhoto

« Reply #12 on: October 10, 2011, 16:56 »
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Whatever about conspiracy theories, all it seems to do is muddy the waters, adding complexity for no good reason.  I take your point but its just as easy to buy a package of x images  for y dollars or euro as to buy z credits and then spend it on x images...

Here's what I was getting at, no conspiracy theory, but that part plays well on it's own. :)

Customer a buys 100 credits for $100, Customer B gets an introductory offer and gets 100 credits for $50, customer C buys a huge annual package and pays 25c a credit for the whole year, D pays 50 pounds for 50 credits and E pays 50 Euro for 50 credits. That way, photos are not priced at any currency but credits. That's why they have credits! Variable pricing, without making a new price list for every oddball customer in their local currency.

Now about commissions. up in the air, they win, and can dangle credits or anything else vague and we don't know what someone really paid for a download. Yes it does muddy the waters for us, but for running an international website, it makes life easy!

« Reply #13 on: October 10, 2011, 17:16 »
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Credit packages were iStock's solution to the problem of 'micropayments' or 'microtransactions'. The problem is how to securely accept large numbers of small payments, payments smaller than what credit card companies want to accept. Amazon, Paypal, and many credit card companies and banks are still constantly trying various new micropayment systems.

The 'micro' 'micropayment' is, I believe, the source of the 'micro' in 'microstock'.
 

« Reply #14 on: October 11, 2011, 00:27 »
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Credit packages were iStock's solution to the problem of 'micropayments' or 'microtransactions'. The problem is how to securely accept large numbers of small payments, payments smaller than what credit card companies want to accept. Amazon, Paypal, and many credit card companies and banks are still constantly trying various new micropayment systems.

The 'micro' 'micropayment' is, I believe, the source of the 'micro' in 'microstock'.
 

Correct. But the system had other advantages that were obvious from the start. It completely eliminates cash flow problems, bad debt problems and the need for account-chasing, while providing working capital for the company. It turns the normal business sequence upside down. Instead of: raise capital > buy stock > hold stock > find buyer > wait 30 days for payment (> pay debt collector)  the sequence is  collect money > wait for a long time before having to supply goods > wait for a long time before paying supplier of goods 

It's the fact that it is capitalism without the requirement for significant initial capital that allowed the original sites to take off. It's vastly superior to any pay-on-demand system as a generator of working capital.

The sneaky smoke and mirrors accounting tricks didn't appear until several years after the creation of the system.

« Reply #15 on: October 11, 2011, 03:44 »
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The sneaky smoke and mirrors accounting tricks didn't appear until several years after the creation of the system.

Interestingly Shutterstock have never gone down the 'credits' road. The new single image sales are not available in my area yet but I get the impression that customers will be paying cash for each download. I suspect that that could be another popular measure with designers who need to pass image purchase costs on to their clients and who would prefer to avoid the 'smoke and mirrors' aspect of credits.

LSD72

  • My Bologna has a first name...
« Reply #16 on: October 11, 2011, 12:45 »
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This should explain credits, points and coupons well enough..

[youtube]http://www.youtube.com/watch?v=vHNkmZOM5xU[/youtube]


« Reply #17 on: October 12, 2011, 15:04 »
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Mostly I think it started as a way to eliminate lots of little transactions and to reward/encourage large purchases of credits. The smoke and mirrors is just a bonus for sites like Fotolia that play exchange rate games etc. etc. (or for DT that pay lower %ages for different level pics).

Agreed.  Also, it creates a disconnect - you may be more likely to spend 10 "credits" then 10 dollars, as well as being able to raise the credit prices in addition to raising what the credits can purchase.

Exactly.  A tactic stolen from the tried and true business model employed by casinos.  You cash in your hard earned dollars for chips, but then once you get the chips, you throw them everywhere like they don't matter at all.  I've done it myself.  When you're playing a game like craps or roulette, ask yourself "if this were a ten dollar bill, would I really be throwing it on the table?" But it's this disconnect that gets people to spend way more money than they normally would.


 

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