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Author Topic: Zack Arias on microstock  (Read 22532 times)

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« Reply #75 on: November 30, 2010, 02:29 »
0
^^^
My Grandfather was a diamond wholesaler back in the post depression era.
He said that if he could make 33% margin over his cost he was REALLY happy.

80% is TOTALLY sustainable. Anyone that says otherwise is lying.


« Reply #76 on: November 30, 2010, 10:12 »
0
^^^
My Grandfather was a diamond wholesaler back in the post depression era.
He said that if he could make 33% margin over his cost he was REALLY happy.

80% is TOTALLY sustainable. Anyone that says otherwise is lying.

There's a reason why analysts that actually cover companies don't compare different industries in different parts of the world and in different eras.  First of all, its not 80% of everything, its 80% of your stuff.  There's a mathematical solution called a weighted average but you all go back to the same thing.  I really don't feel like debating this on speculation anymore, so my final thoughts are that if some of you want to leave because you don't like it, please do.  If you want to put up with it, then fine.  I don't agree with 15% or 20% commissions, but I'm not running the iStock business and I've made my choices according to what I perceive the business conditions to be.  I like the results so far and I will continue doing what I'm doing and making my analyses on my portfolio, etc.  That is all from me

« Reply #77 on: November 30, 2010, 10:32 »
0
There's a reason why analysts that actually cover companies don't compare different industries in different parts of the world and in different eras.  First of all, its not 80% of everything, its 80% of your stuff.  There's a mathematical solution called a weighted average but you all go back to the same thing.  I really don't feel like debating this on speculation anymore, so my final thoughts are that if some of you want to leave because you don't like it, please do.  If you want to put up with it, then fine.  I don't agree with 15% or 20% commissions, but I'm not running the iStock business and I've made my choices according to what I perceive the business conditions to be.  I like the results so far and I will continue doing what I'm doing and making my analyses on my portfolio, etc.  That is all from me

I know it's nice to eliminate your competition, but you must worry a little bit about other contributors packing up and leaving. That seems like it could have some negative consequences as well.

lisafx

« Reply #78 on: November 30, 2010, 10:50 »
0
^^^
My Grandfather was a diamond wholesaler back in the post depression era.
He said that if he could make 33% margin over his cost he was REALLY happy.

80% is TOTALLY sustainable. Anyone that says otherwise is lying.

There's a reason why analysts that actually cover companies don't compare different industries in different parts of the world and in different eras. 

Okay, howabout the other microstock sites, in the same industry, in the same era, who all seem to be growing and thriving, while paying double or more what Istock pays its suppliers?   If other microstock sites can be sustainable on 50-70% margins (and that's a fact, not speculation) then Istock must be either (a) lying;  or (b) grossly mismanaged to be unable to sustain itself on 80%. 

« Reply #79 on: November 30, 2010, 10:50 »
0
There's a reason why analysts that actually cover companies don't compare different industries in different parts of the world and in different eras.  First of all, its not 80% of everything, its 80% of your stuff.  There's a mathematical solution called a weighted average but you all go back to the same thing.  I really don't feel like debating this on speculation anymore, so my final thoughts are that if some of you want to leave because you don't like it, please do.  If you want to put up with it, then fine.  I don't agree with 15% or 20% commissions, but I'm not running the iStock business and I've made my choices according to what I perceive the business conditions to be.  I like the results so far and I will continue doing what I'm doing and making my analyses on my portfolio, etc.  That is all from me

I know it's nice to eliminate your competition, but you must worry a little bit about other contributors packing up and leaving. That seems like it could have some negative consequences as well.

The model isn't based on one, two or 100 contributors.  And the likelihood of the best and the brightest all leaving is so low that I don't particularly care much.  Additionally, they will be replaced by others who will prop the portfolio up at a smaller commission, which in turn lowers the weighted average and allows iStock to continue to pay out better exclusive commissions.  So I'm okay with people who want to leave.  Most won't.  And thats what drives this.

lisafx

« Reply #80 on: November 30, 2010, 10:51 »
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That is all from me

LOL!  I knew it was an empty threat ;)

grp_photo

« Reply #81 on: November 30, 2010, 10:54 »
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That is all from me

LOL!  I knew it was an empty threat ;)
LOL  ;D ;D

« Reply #82 on: November 30, 2010, 10:54 »
0
^^^
My Grandfather was a diamond wholesaler back in the post depression era.
He said that if he could make 33% margin over his cost he was REALLY happy.

80% is TOTALLY sustainable. Anyone that says otherwise is lying.

There's a reason why analysts that actually cover companies don't compare different industries in different parts of the world and in different eras. 

Okay, howabout the other microstock sites, in the same industry, in the same era, who all seem to be growing and thriving, while paying double or more what Istock pays its suppliers?   If other microstock sites can be sustainable on 50-70% margins (and that's a fact, not speculation) then Istock must be either (a) lying;  or (b) grossly mismanaged to be unable to sustain itself on 80%. 

Who says these sites are growing/thriving at 50% commissions/70% commissions - you are going to be hardpressed to convince me that SS is not keeping 70% themselves.  All the 50% commission sites have been taken over by other companies - SS with BigStock, iStock withi StockXpert.  LO died quickly, the rest are meaningless because they are such an insignificant portion of the whole. If money was so great at 50%, then StockXpert would still be there. Don't forget that Getty is a business and they would not overpay for something if the NPVs and the IRRs didn't warrant the investment.  Plus, to actually prove your sustainability points, you need to have comparable figures - no one has those because of the private nature of these businesses.  When Getty goes public, we will have a much better idea.  That won't happen for a while though.  The IPO market is just starting again  

donding

  • Think before you speak
« Reply #83 on: November 30, 2010, 10:59 »
0
Well in my opinion when a lot of businesses can survive on 50% profit margin, then iStock should be able to survive on less , simply because all those other businesses.(not stock) also have to purchase an inventory....not pay for it after the fact.

« Reply #84 on: November 30, 2010, 11:33 »
0
The model isn't based on one, two or 100 contributors.  And the likelihood of the best and the brightest all leaving is so low that I don't particularly care much.  Additionally, they will be replaced by others who will prop the portfolio up at a smaller commission, which in turn lowers the weighted average and allows iStock to continue to pay out better exclusive commissions.  So I'm okay with people who want to leave.  Most won't.  And thats what drives this.

I'll take that as a no, not worried.  ;D

WarrenPrice

« Reply #85 on: November 30, 2010, 12:12 »
0
I wonder what our average margin is on images uploaded?  Or, should we just be happy to achieve an 80% acceptance ratio?   ::)

« Reply #86 on: November 30, 2010, 13:03 »
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Well in my opinion when a lot of businesses can survive on 50% profit margin, then iStock should be able to survive on less , simply because all those other businesses.(not stock) also have to purchase an inventory....not pay for it after the fact.

that is a flawed argument in its entirety - but you can assume whatever you wish

« Reply #87 on: November 30, 2010, 13:03 »
0
The model isn't based on one, two or 100 contributors.  And the likelihood of the best and the brightest all leaving is so low that I don't particularly care much.  Additionally, they will be replaced by others who will prop the portfolio up at a smaller commission, which in turn lowers the weighted average and allows iStock to continue to pay out better exclusive commissions.  So I'm okay with people who want to leave.  Most won't.  And thats what drives this.

I'll take that as a no, not worried.  ;D

Nah not worried.  Can't worry about what other people do, just need to worry about what I can control

« Reply #88 on: November 30, 2010, 14:14 »
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 Hi All,

 I can say that being part owner in three agencies that offer anywhere from 35%-50% that companies can thrive on those numbers and are. Check www.blendimages.com www.culturaimages.com and www.spacesimages.com. The last in the order is not seeing a profit yet because it is very young but the others are doing very well and the growth per month on the new company is growing at a very strong rate with a 50/50 split.

Best,
Jonathan

grp_photo

« Reply #89 on: November 30, 2010, 14:25 »
0
anywhere from 35%-50% that companies can thrive on those numbers and are.

I agree on this one.
Quote
Check www.blendimages.com www.culturaimages.com and www.spacesimages.com. The last in the order is not seeing a profit yet because it is very young but the others are doing very well and the growth per month on the new company is growing at a very strong rate with a 50/50 split.



Not a fair comparison as all three agencies are sub-agencies afaik so they don't have to promote themself to buyers as istock has to, I'm personally not so impressed with culturaimages but only have one year experience with them and will wait for a final statement.
« Last Edit: November 30, 2010, 14:28 by grp_photo »

« Reply #90 on: November 30, 2010, 14:38 »
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All the 50% commission sites have been taken over by other companies - SS with BigStock, iStock withi StockXpert.

I also vaguely remember that a 20% site called iStockphoto was taken over by Getty. Why was that? And a 60% site called Alamy has not been taken over by anyone. What is your point?

iStock's royalty cuts (for non-exclusives) suck and are based on greed. I cannot find any valid argument that tells me otherwise.
« Last Edit: November 30, 2010, 14:40 by Perry »

« Reply #91 on: November 30, 2010, 14:56 »
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 Hi grp_photo,
 
 Cultura is making money at 50%. As for your sales that doesn't really reflect on the companies growth, only your own. All these agencies do a lot of promotion. Blend has an ad in PDN every month as well as other promotions in publication and online. Directly speaking with the buyers and their contributors. How does this differ? They also have their own direct sales channel so they are not just a third party agency that is part of their model but direct sales are also a part of their growth as well.

Best,
Jonathan


« Reply #92 on: November 30, 2010, 15:07 »
0
All the 50% commission sites have been taken over by other companies - SS with BigStock, iStock withi StockXpert.

I also vaguely remember that a 20% site called iStockphoto was taken over by Getty. Why was that? And a 60% site called Alamy has not been taken over by anyone. What is your point?

iStock's royalty cuts (for non-exclusives) suck and are based on greed. I cannot find any valid argument that tells me otherwise.

I'm talking about micros swallowing micros.  Getty's entrance through buying iStock was to stop the erosion of their core businesses and add diversity to their portfolio. 

I'm still making money.  I'd love to make more.  But until then, I'll try doing that through making better photos

grp_photo

« Reply #93 on: November 30, 2010, 15:12 »
0
Hi grp_photo,
 
 Cultura is making money at 50%. As for your sales that doesn't really reflect on the companies growth, only your own. All these agencies do a lot of promotion. Blend has an ad in PDN every month as well as other promotions in publication and online. Directly speaking with the buyers and their contributors. How does this differ? They also have their own direct sales channel so they are not just a third party agency that is part of their model but direct sales are also a part of their growth as well.

Best,
Jonathan
At least all three rely mainly on sales through other agencies let's say from a sale at an main-agency the sub-agency is getting 50% of the sale-price the sub now split this 50% again in half so the photographer gets actually 25% of the sale. If I upload to Getty or Corbis directly they do the keywording and check for quality for free. At Cultura I have to pay for this. And yes I think it is different if I mainly put the collection at other agencies and rely on sales from this agencies as I do sell my work directly to end-customers.
« Last Edit: November 30, 2010, 15:13 by grp_photo »

donding

  • Think before you speak
« Reply #94 on: November 30, 2010, 15:13 »
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 All the 50% commission sites have been taken over by other companies - SS with BigStock, iStock withi StockXpert.  

Well I wonder why they were bought out...you reckon it was because they were making money??? Nobody is going to buy a company that loses money unless they need a write off because they are making to much.

« Reply #95 on: November 30, 2010, 15:37 »
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I'm still making money.  I'd love to make more.  But until then, I'll try doing that through making better photos

I'm still making money as well, and I also would like to make more. That's why some of us are a "little" ticked. All my growth and hard work in 2010 was basically wiped out by this royalty change for 2011. If I continue to upload, will it just happen again? I can't speak for iStock's sustainability, but I know this pattern is unsustainable for me.

lisafx

« Reply #96 on: November 30, 2010, 15:47 »
0

I'm still making money as well, and I also would like to make more. That's why some of us are a "little" ticked. All my growth and hard work in 2010 was basically wiped out by this royalty change for 2011. If I continue to upload, will it just happen again? I can't speak for iStock's sustainability, but I know this pattern is unsustainable for me.

Absolutely! Amen!^^

@Jonathan,  Thanks for weighing in with you experience of owning and managing successful stock sites.  Hard for any rational person to dispute your firsthand experience.  Not that a few won't try ;)

grp_photo

« Reply #97 on: November 30, 2010, 16:33 »
0


@Jonathan,  Thanks for weighing in with you experience of owning and managing successful stock sites.  Hard for any rational person to dispute your firsthand experience.  Not that a few won't try ;)
I didn't dispute his experience, I'm aware of his top-experience. I'm just saying you can't compare sub-agencies to normal agencies (like Getty, iStock, Corbis, Alamy, Fotolia etc.) it is a different kind of beast.
I also didn't question the success for this sub-agencies but this doesn't mean that it is on the same level successful for the photographers. I also pointed out that a photographer gets hardly more percentage from the selling-price via this sub-agencies as via iStock. A pretty good percentage from the Agency for the sub-agency like 40% ends up as 20% for the photographer from the selling-price. Please reread my post.

lisafx

« Reply #98 on: November 30, 2010, 16:56 »
0


@Jonathan,  Thanks for weighing in with you experience of owning and managing successful stock sites.  Hard for any rational person to dispute your firsthand experience.  Not that a few won't try ;)
I didn't dispute his experience, I'm aware of his top-experience. I'm just saying you can't compare sub-agencies to normal agencies (like Getty, iStock, Corbis, Alamy, Fotolia etc.) it is a different kind of beast.

Actually, you weren't the one I was thinking of.  I had Ichiro17 in mind.  Your observations seemed perfectly rational to me.  Why did you assume my remark was directed at you? 

grp_photo

« Reply #99 on: November 30, 2010, 17:02 »
0
Why did you assume my remark was directed at you? 
Maybe because English is not my native tongue.

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