MicrostockGroup

Agency Based Discussion => iStockPhoto.com => Topic started by: TylerCody on September 11, 2010, 03:00

Title: iStock's New Royalty Split Strucutre - An Editorial Opinion
Post by: TylerCody on September 11, 2010, 03:00
Over the last week I have read the 3 posts from iStock headed up by KK Thompson about the new pay structure they will be kicking off in January 2011. I have also seen the literally thousands of rantings and ravings of both contributors and buyers in the iStock forums. At this point I have to say that I believe it simply comes down to one thing:

iStock, or shall we say Getty at this point, is not satisfied with the 60%-80% share of the pie they are already getting now from their image contributors. In my opinion, that is already a very sizable cut, and, by taking anything more from their hard working contributors, is just simply pure corporate greed. But it is their game, and still the best one in town right now, and so, at the end of the day, nothing anyone can do about it. For the good of the contributors or not, that its they way of the corporate world, especially in North America. So no surprise.

The one mistake they are making in all of this though is with their untruthful sounding excuses for their corporate decision whilst not actually admitting to the truth when questioned about it by their contributors. If they just came out and explained to everyone that they want more of the pie, full stop, then everyone could make a decision to stay or leave. People will still of course be angry, some will leave and some will stay, and rightfully so, but there would not be page after page of rantings accusing iStock of all kinds of bad things which is now making their situation even worse. It is the misleading reasons for the changes which they can't substantiate that are killing them now and causing this thing to spiral out of control as it has.

Someone internally came up with the poorly thought out plan to tell the contributors that iStock is not making enough in order to sustain themselves anymore under the current royalty split structure and thus why they need to chisel off even more come the new year. Of course, at the 60-80 percentile they are getting now, no one believes this to be the truth. Bad play. Especially since all iStock's misctostock competitors are making the business model work on an even lower split than what iStock is getting. It also raises the question to contributors about the possibility of the company being grossly mismanaged by their management team if they canít seem to survive at the current royalty split levels. Not a good strategy at all. Corporate political suicide in fact.

Then they go on one step further to tell everyone they plan to pay out even more in 2011 than in 2010 to try to make it seem that they really arenít taking any more money away from their contributors under this new pay structure. Another deceptive ploy it would seem. iStockís revenues increase every year with the steady increase in the number of files uploaded, added market share penetration, and the regular increases they make to picture pricing. So of course they will pay out more each year as their business grows, that is a natural progression, but they will also earn more too, even if they didnít cut contributor royalties at this point. In fact, if they werenít going to make more under the new royalty structure, then it serves no purpose for them to change things in the first place. Smoke and mirrors.

In the end what they have done is simply a bad political move for iStock on a PR level and they come up losing faith, trust and loyalty from their buyers and contributors, which will be hard to win back again in the future, if ever at all.

Whether it affects the company negatively on a financial level of course remains to be seen, but no one really cares about the woes of a corporate giant anyway in this day of personal economic struggle. At the end of the day the real losers are 50+% of their contributors while the company continues to make more. And the buck stops there. Hooray for iStock and no one else. But iStock could simply have been more honest about it. It's their bad this time.