Snip

I guess what this long drone on post is about is, how bad can things be at IS if they just keep on keeping on with their move to midstock? I have read all the suppositions from others here but surely Getty/IS must have some kind of marketing research done that makes them think the move to midstock is good.

I am sure someone here will enlighten me, cuz I am too stoopid to see their (IS) logic. Why eff up a good thing? 

----------------------------------------------
This is the $64 dollar question.  Why are they doing what they are?  We can only guess. 

Logically it seems running their business this way produces the biggest profit or they would not do it.  Obviously this path has medium and long term consequences if they go too far, which its seems to me they have.

Another possibility is the debt they took on last fall is crushing the company and they need to generate any cash flow they can now to stave off bankruptcy regardless of long term consequences. 

An alternative is that they are trying to boost cashflow on the balance sheet getting Getty and/or Istock ready for a sale.

There is also the J. Klein cannibalism theory, if somebody is going to cannibalize your business it might as well be you.  Say Getty has concluded that the future of low end micro is subscription based not pay per download, so to avoid shutterstock from eating their business they will eat it first.  So they set up Thinkstock with a two year plan to migrate most istock content there.  At the same time, Istock is elevated in the Getty portfolio to midstock as a brand, but its hollowed out as its only vetta and agency. 

Another alternative is good old hubris.  Istock has been amazingly successful despite itself.  They got some things right early on and rode the wave for many years in spite of failing again and again at communicating effectively with contributors and buyers and rolling out bug filled features.  Maybe they think that since they got it right in the past despite their poor execution and many contributor complaints, that this time they are right again because everyone is telling them they are wrong.   

Another is they really are just crazy. 

This is the $64 dollar question.  Why are they doing what they are?  We can only guess. 

Logically it seems running their business this way produces the biggest profit or they would not do it.  Obviously this path has medium and long term consequences if they go too far, which its seems to me they have.

Another possibility is the debt they took on last fall is crushing the company and they need to generate any cash flow they can now to stave off bankruptcy regardless of long term consequences. 

An alternative is that they are trying to boost cashflow on the balance sheet getting Getty and/or Istock ready for a sale.

There is also the J. Klein cannibalism theory, if somebody is going to cannibalize your business it might as well be you.  Say Getty has concluded that the future of low end micro is subscription based not pay per download, so to avoid shutterstock from eating their business they will eat it first.  So they set up Thinkstock with a two year plan to migrate most istock content there.  At the same time, Istock is elevated in the Getty portfolio to midstock as a brand, but its hollowed out as its only vetta and agency. 

Another alternative is good old hubris.  Istock has been amazingly successful despite itself.  They got some things right early on and rode the wave for many years in spite of failing again and again at communicating effectively with contributors and buyers and rolling out bug filled features.  Maybe they think that since they got it right in the past despite their poor execution and many contributor complaints, that this time they are right again because everyone is telling them they are wrong.   

Another is they really are just crazy. 

The truth probably lies in a mix of all these ideas. The "biggest profit" and "just crazy" theories seem to be strongest though. :-)
One thing that amazes me though is how big companies in general seem to get an idea that "this is the way the market will go" and then blindly follow that idea to the death.
It always looks to me as if someone high up has a pet theory, and can't possibly be wrong.

Hi Dave!

Its called tunnel-vision!  walking around with blinkers, blindfold. this one-track mind is what finally grounded the SAAB motorcar ( thought their product was so good they were untouchable) meanwhile they just borrowed and bought and ultimately bit the dust.

rings a bell, doesnt it?

Hi Chris
Exactly. The British motorcycle industry has to be another classic example of this, "They'll buy what we tell them they want" thinking in the 60s and 70s. Henry Ford nearly did the same with the Model T, keeping it in production long after it's looks and technology were outdated because he thought the customers didn't need anything more modern.
The world moves on and woe betide any business that thinks they know better!
How does the other one go "He who knows no history is doomed to relive it"

The truth probably lies in a mix of all these ideas. The "biggest profit" and "just crazy" theories seem to be strongest though. :-)

I agree.  Great theories Sadstock!  Very well summed up. 

To anyone who thinks that there is a method to all this madness - some clever plan in action - I would have thought the same at one time, but not now.  Now I am convinced that Istock is indeed hemorrhaging buyers and TPTB are only interested in short term profits. 

I'm still not convinced that THEY are making less money, but it sure seems to be hurting us, which ultimately is unsustainable (if that word means what I think it means). As they push wholly owned and expensive high %age (for them) content to the front, they might still be making more. Eventually that might bite them, or maybe they will manage to continue to make enough profit to get their bonuses.

Juanmonino made a good point with this post over at IS.

It is obvious that they have a plan that will fill eventually IS of vettta, agency and who knows what other collections, it is matter of time. What they are doing is transfering traditional Getty overhere, few years ago, clients runned away from Getty to IS, now Getty is moving to IS to get their customers back. Looks like they have a different plan for nickel and dimes clients, they probably planned to move them to Thinkstock, together with most of the IS regular contributors. This is obvious, common sense, you have to be blind not to see it.

there is only one defense-solution, is to make much better quality stuff and cross your fingers and see if they are included in vetta collection. People with common pictures will eventually be out of the equation here, as more and more niches will be filled with outside collections.

... except that now there are other sites to fled, no just TSF. That wasn't the situation at the beggining of IS. These other sites try to compete with IS basically offering lower prices, so this strategy could easily backfire. I think IS is just trying to have a mega site for all  budgets and all file types.

I am quite shocked that the search results give such extreme preference to expensive images. istock has in effect then become a midstock site.

Getty has many midstock sites - punchstock, jupiterimages, getty itself etc...but istock was always a place for images that sell in high volume.

I love V/A, absolutely fantastic stuff, but they are usually too specific to be sold in high volume.

Instead of encouraging the buyers to leave, why not offer them a good visual solutions, like the one Hillaryfox suggested.

If the main purpose of istock now is to become a showstore for expensive images, this will alienate a lot of buyers who just need normal images for daily webdesign or powerpoint presentations.

As a buyer you don�t want to work with many different agencies, you want one place to fill all your needs, like amazon or ebay. istock has all the images for daily work plus the "luxury sports car" for the special occasion. But to keep your buyers interested respect their time and give them options to find quickly what they want.

If Juanmonino is right, then it would be very sad, because it means istock is actively encouraging the buyers to leave.

I just don�t understand the logic behind this?

I just experienced buyer search frustration looking for a car. Cars.com is straightforward. You can filter and sort however you like. Autotrader.com is a pain. They have several tiers of search results by sponsors, preferred, and then regular listings. So for each search you need to wade through page after page trying to find the search results at the different levels. Not exactly the same as IS, but it's still forcefed search results that waste time and create frustration for the buyer while trying to make more money for the site.

Maybe the logic is in the money. Maybe this strategy really works and brings in more money for Getty.

I would have thought that for image buyers to able to sort by price is important, but perhaps I am underestimating the budgets.

I think this might be a situation where you're shoring up declining volume with higher prices. In the short term it probably appears to be "fixing" the problem of growth being at much lower levels - as long as you measure only the money, not the sales volume. In the long term though, if the loss of volume is in part though loss of customers as well as fewer downloads from those who stay, and you see that some of the new customers who drifted over from Getty Images for Agency drift away after trying the new site, you may see (too late) the full effect of what appeared to be a good move up front.

The other thing is that we don't know how Getty is measuring performance. If they're looking at something specific, not overall profit, IS management will be trying to meet whatever measurement Getty has set.

I had someone who worked for me years ago tell of his former boss who turned down a profitable acquisition for his division - that even he admitted would be a long term win for the company - because its gross margins were low. The former boss was measured on the division's gross margin which would have declined for a while if he went ahead with the acquisition. Incentives and measuring are great, but you have to be very careful or you get these sorts of horrendously bad things happening for the longer term or overall "good".

This just doesn't seem like istock any more.  I wonder if someone will start a rival site that's like the old istock?  The previous owners might of singed something to stop them doing that but if so many people liked the old istock but can't get on with this one, I wonder if they might end up doing something to get back to the site they loved.

Too late. I think SS have already 're-invented' microstock ... by doing virtually nothing whilst all around were losing their heads.

Microstock was based on cheap images, all at the same price, selling in large volumes to a grateful public. As far as SS are concerned ... it still is.

Microstock was based on cheap images, all at the same price, selling in large volumes to a grateful public. As far as Shutterstock are concerned ... it still is.

Shutterstock was about subscriptions. It seem likely that this where much of the business will be. Lots of photographers are going to have a tough time liking that - but even if they try to invent alternative models they are going to have to realise that for lots of image consumers subscription is going to be a very attractive model.

Here's a piece from Forbes that may apply.  It's about Microsoft and Apple and why, despite similar earnings and profit, the market thinks Apple's worth a whole lot more as an investment.  In brief, the idea is that once you stop growing, you start taking actions that shore up your balance sheet but don't do anything for the company's long term prospects.  Sound familiar?