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Author Topic: iStock changing royalty structure  (Read 227319 times)

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« Reply #125 on: September 07, 2010, 19:14 »
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The IPO thing is an interesting theory  but it could also be that Getty, as a whole, is just making less money. Way less money. I doubt they could sell the business for anything close to what was paid for it. It could be just their way of trying to maintain an money stream by taking it from their contributors, the ones least likely to effect their business. We'll know fairly soon if it is IPO.


« Reply #126 on: September 07, 2010, 19:29 »
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Still shocked...
My first though was "Darn, now all the exclusives are going to drop their exclusive status and flood other agencies"
Having sat on it for a while, my second though is "HAAH, AND THE BUYERS WILL FOLLOW TO OTHER AGENCIES AS WELL", which makes me feel better....

« Reply #127 on: September 07, 2010, 19:32 »
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I don't know what insults me more, the veiled attempt to hide what is an obvious commission cut or this statement:

''With that overriding objective, we wanted to produce a solution that:
- would not change most contributors' total compensation (except for the better)
- adjusts the model to better reward contributors of premium content"

Either the person who wrote that is incredibly naive or they're hoping that everyone who reads it is.

I'm guessing this will change over 95% of contributors commissions for the worse, and that not one single "premium content" contributor will be better rewarded.

I can see two explanations for this remark.  The first is that it's an outright lie and they think we're either stupid or sheep.  Or possibly both.

Okay, let's move on to the second explanation, that they really believe that total compensation for the majority of contributors won't go down.  Since it's clear that most contributor's royalty percentages will drop, that suggests they're planning to increase prices.  If they raise them enough, most contributors will earn a smaller percentage of a larger amount and will at least break even.  Of course, raising prices will likely decrease sales, so they have to find the sweet spot before they hit a point of diminishing returns.  The result is that Getty makes a lot more money, most contributors don't lose anything (except their anal virginity), and a few even make a little more.  But if they've calculated wrong, well, they may make a lot more but everybody else loses.

« Reply #128 on: September 07, 2010, 19:34 »
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Sorry Lisa. The movie "Pretty Woman" was about a tycoon (Richard Gere) who bought up companies in an appearance to make it look like he was trying to help them survive when in reality he would break them up and sell them off for huge profits.  

Oh, I see.  Yes, that or an IPO does sound like exactly what's going on here.  

Thanks for explaining John.  I have seen PW a couple of times but for some reason Richard Gere made more of an impression than what his character did for a living ;)

Although Richards character did see the light at the end, I don't expect the same here.

Concerning the thought that little money would be made selling off, there are lots of major corps out there that would snap at the idea of owning a share of this "new" business that's 5 years young give or take. We're talking millions of images....just my thinking on the matter.

« Reply #129 on: September 07, 2010, 19:38 »
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All of this reminds me of why I love Shutterstock. 

« Reply #130 on: September 07, 2010, 19:44 »
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The IPO thing is an interesting theory  but it could also be that Getty, as a whole, is just making less money. Way less money. I doubt they could sell the business for anything close to what was paid for it. It could be just their way of trying to maintain an money stream by taking it from their contributors, the ones least likely to effect their business. We'll know fairly soon if it is IPO.

People, there's NO IPO coming soon.  If there is, its silly.  There's no money in the capital markets for anything at the moment, so an IPO will be a long ways away and will happen when they can get premium dollar - not for iStock, but for Getty as a whole.  iStock without Getty and vice versa isn't going to work

I think they are trying to drive off non-exclusives and keep exclusives (not sure how) and I'm borderline for a pay raise.  This isn't over yet, and its going to be interesting.  Yay for industry shakeup?

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #131 on: September 07, 2010, 19:45 »
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All of this reminds me of why I love Shutterstock. 

Don't kid yourself. You'll eventually need vaseline over there too.

vonkara

« Reply #132 on: September 07, 2010, 19:51 »
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The agencies want to make money from the two ends. Now, either you pay fee's to get your images online like Getty, or they cut in the pourcentage.

From the billions images added, only a few sell a bunch now. I never heard the database space was that much expensive  ::)

« Reply #133 on: September 07, 2010, 19:53 »
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All of this reminds me of why I love Shutterstock. 

Don't kid yourself. You'll eventually need vaseline over there too.

Well, they don't have a track record of screwing over contributors.  They keep it simple.  In the 4 1/2 years I've been there, there has never been a decrease in contributor's share.  There have been increases though.  I like it.  You could be right.  I don't know.  I just know about my past experience and it's been good. 

« Reply #134 on: September 07, 2010, 19:55 »
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All of this reminds me of why I love Shutterstock. 

Don't kid yourself. You'll eventually need vaseline over there too.

I prefer to hold out hope where Shutterstock is concerned.  They have always treated me with fairness, and if they find it necessary to adjust our arrangement, I'd expect them to handle it better than this.

jbarber873

« Reply #135 on: September 07, 2010, 20:00 »
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The IPO thing is an interesting theory  but it could also be that Getty, as a whole, is just making less money. Way less money. I doubt they could sell the business for anything close to what was paid for it. It could be just their way of trying to maintain an money stream by taking it from their contributors, the ones least likely to effect their business. We'll know fairly soon if it is IPO.

People, there's NO IPO coming soon.  If there is, its silly.  There's no money in the capital markets for anything at the moment, so an IPO will be a long ways away and will happen when they can get premium dollar - not for iStock, but for Getty as a whole.  iStock without Getty and vice versa isn't going to work

I think they are trying to drive off non-exclusives and keep exclusives (not sure how) and I'm borderline for a pay raise.  This isn't over yet, and its going to be interesting.  Yay for industry shakeup?

When i brought up IPO, I meant Getty. They are currently owned by a private equity firm, and I think they can see the writing on the wall. The best move it can make is to squeeze profits for 6 months and make the earnings grow ( at the price of destroying the franchise). Microstock is the only growth in the whole space, and the value will never be better than now.
As for no money in the capital markets, it's quite the opposite- corporations have never had more money on the balance sheet than right now. Investors are getting 1% on treasuries. I think there will be a ton of deals getting done soon.

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #136 on: September 07, 2010, 20:02 »
0
The IPO thing is an interesting theory  but it could also be that Getty, as a whole, is just making less money. Way less money. I doubt they could sell the business for anything close to what was paid for it. It could be just their way of trying to maintain an money stream by taking it from their contributors, the ones least likely to effect their business. We'll know fairly soon if it is IPO.


Getty sees Istock as a cash cow. Macro sales are way down, Istock sales are way up. If they can't get more buyers to Getty to buy at macro prices, then take macro priced images to Istock where the buyers already are.

This performance goal change will eventually position istock as a higher end site geared people who "get it" and consistently produce highly sellable images. I'm getting to be like a prophet with this stuff. I brought up this performance stuff months ago  

They will keep wringing the buyers and contributors until they see there's nothing else they can get. People are mad, but not even close to mad enough to make major changes. We have a lot more to go through before contributors take action on a big enough scale.

« Reply #137 on: September 07, 2010, 20:07 »
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1. They are now fat with content and its time  to grab as much cash as they can.
2. Buyers will know what's going on and they do care about the people who make the images rather than a website.
3. A new stock site will rise quickly with great stuff, the'll pay the talent fairly and justly and  buyers will flock to it.
4. Buyers will always follow the talents not greedy websites.  

You'all CHEER UP

and BYEstock !

« Reply #138 on: September 07, 2010, 20:12 »
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Another thing to keep in mind:
Quote
iStock will now set royalty levels annually. The levels are set based on overall iStock credit usage from the previous year.

So it might take 1,400,000 credits to qualify for 20% in 2011, but in 2012 they could very well raise it to 1,800,000 or whatever. Every year they can adjust the levels and I can only see that going one way...

« Reply #139 on: September 07, 2010, 20:17 »
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All of this reminds me of why I love Shutterstock. 
All this reminds me of why I have always loved Dreamstime too. Achilles makes a conscious effort to create a level playing field for contributors new and old, the opposite of what IS has always done.

« Reply #140 on: September 07, 2010, 20:20 »
0
The IPO thing is an interesting theory  but it could also be that Getty, as a whole, is just making less money. Way less money. I doubt they could sell the business for anything close to what was paid for it. It could be just their way of trying to maintain an money stream by taking it from their contributors, the ones least likely to effect their business. We'll know fairly soon if it is IPO.

People, there's NO IPO coming soon.  If there is, its silly.  There's no money in the capital markets for anything at the moment, so an IPO will be a long ways away and will happen when they can get premium dollar - not for iStock, but for Getty as a whole.  iStock without Getty and vice versa isn't going to work

I think they are trying to drive off non-exclusives and keep exclusives (not sure how) and I'm borderline for a pay raise.  This isn't over yet, and its going to be interesting.  Yay for industry shakeup?

When i brought up IPO, I meant Getty. They are currently owned by a private equity firm, and I think they can see the writing on the wall. The best move it can make is to squeeze profits for 6 months and make the earnings grow ( at the price of destroying the franchise). Microstock is the only growth in the whole space, and the value will never be better than now.
As for no money in the capital markets, it's quite the opposite- corporations have never had more money on the balance sheet than right now. Investors are getting 1% on treasuries. I think there will be a ton of deals getting done soon.

Corporations don't buy stock, they are holding it for acquisitions.  That has nothing to do with IPOs.

The number of investment firms looking at stuff like this in a time of uncertainty is small - hence the few IPOs and startiving investment bankers.  Just saying, you can make it look pretty but no one has to buy you a drink just because you may look nice
« Last Edit: September 07, 2010, 20:22 by ichiro17 »

« Reply #141 on: September 07, 2010, 20:22 »
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this has made a pretty good ripple in the pond, Got this on my FB page today

Fotolia ‎@sjlocke Our Non-Exclusives start at 25% with no reset. Just saying... :) microstock istockphoto istock

« Reply #142 on: September 07, 2010, 20:25 »
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I think Fotolia, as much as I hate them with a passion, is doing the right thing trying to steal all IS's exclusives.  Its a great thing to see

jbarber873

« Reply #143 on: September 07, 2010, 20:26 »
0
The IPO thing is an interesting theory  but it could also be that Getty, as a whole, is just making less money. Way less money. I doubt they could sell the business for anything close to what was paid for it. It could be just their way of trying to maintain an money stream by taking it from their contributors, the ones least likely to effect their business. We'll know fairly soon if it is IPO.

People, there's NO IPO coming soon.  If there is, its silly.  There's no money in the capital markets for anything at the moment, so an IPO will be a long ways away and will happen when they can get premium dollar - not for iStock, but for Getty as a whole.  iStock without Getty and vice versa isn't going to work

I think they are trying to drive off non-exclusives and keep exclusives (not sure how) and I'm borderline for a pay raise.  This isn't over yet, and its going to be interesting.  Yay for industry shakeup?

When i brought up IPO, I meant Getty. They are currently owned by a private equity firm, and I think they can see the writing on the wall. The best move it can make is to squeeze profits for 6 months and make the earnings grow ( at the price of destroying the franchise). Microstock is the only growth in the whole space, and the value will never be better than now.
As for no money in the capital markets, it's quite the opposite- corporations have never had more money on the balance sheet than right now. Investors are getting 1% on treasuries. I think there will be a ton of deals getting done soon.

Corporations don't buy stock, they are holding it for acquisitions.  That has nothing to do with IPOs.

The number of investment firms looking at stuff like this in a time of uncertainty is small - hence the few IPOs and startiving investment bankers.  Just saying, you can make it look pretty but no one has to buy you a drink just because you may look nice

But they always DO buy me drinks!
As for the IPO, we'll see.

« Reply #144 on: September 07, 2010, 20:28 »
0
this has made a pretty good ripple in the pond, Got this on my FB page today

Fotolia ‎@sjlocke Our Non-Exclusives start at 25% with no reset. Just saying... :) microstock istockphoto istock

I know - funny stuff, eh? ;)

« Reply #145 on: September 07, 2010, 20:31 »
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Forgive this question which not many people will care about, but as an exclusive with the smallest portfolio around, what happens to exclusives with less than 2,000 credits?

http://www.istockphoto.com/article_view.php?ID=861

« Reply #146 on: September 07, 2010, 20:32 »
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It really looks like they want to get rid of the non-exclusive contributors. For the exclusives, Vetta and Exc+ sales help a lot to get higher on the redeemed credit totals but for non-exclusive, with the lower credit pricing on photos, I can see that as almost impossible to get to the top tier. So droping the non-exclusive royalties to 15% (and they were already one of the lowest)? Looks clear to me that they want non-exclusive to either leave or turn exclusive (which I'm not sure many will do).

For me, as a low level exclusive (since 2 months), it doesn't change a thing. I'll stay at 25% next year and might get to 30% the next year but probably never go above that.

@adijr - the lowest commission for exclusives stays at 25%

« Reply #147 on: September 07, 2010, 20:35 »
0
@adijr - the lowest commission for exclusives stays at 25%

Thanks alot for the answer! are you guessing this from what you've read, or did you see this somewhere specific? I'd like to give it a read and re-consider this whole exclusivity thing.

Thanks again!

PaulieWalnuts

  • On the Wrong Side of the Business
« Reply #148 on: September 07, 2010, 20:35 »
0
this has made a pretty good ripple in the pond, Got this on my FB page today

Fotolia ‎@sjlocke Our Non-Exclusives start at 25% with no reset. Just saying... :) microstock istockphoto istock

I'd hold off on other micros while looking at other options.

I wonder what would happen if the top istock contributors (like may the top 100 that probably make up over 10-20% of istock's revenue) set up their own site with mostly exclusive content.

Like a Photoshelter virutal agency. Stay with istock. Start building a mix of RM and RF. Price it lower than Istock and Getty. Get 90%. Put some back into admin and marketing.

« Reply #149 on: September 07, 2010, 20:39 »
0
0.76$ for my lowest
I get 0.19$ as my lowest XXXXXXS  ;D - Half of SS.


 

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