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Author Topic: iStock changing royalty structure  (Read 348588 times)

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« Reply #600 on: September 10, 2010, 05:12 »
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So, you can't read. I said I'ven been browsing fifteen minutes ant that was enough.
Maybe you just can't read more five or ten posts in this time; it's not my case. And I've been in istock and in the forums many years, more than enough to know  what I'm talking about.

The bare, not arguable, fact is that you can't prove your words.  You just can insist that "it's true", but you can't provide examples. Hum. And being your target to create conflict between people, that puts a clear light in your personality.


alias

« Reply #601 on: September 10, 2010, 05:14 »
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http://blog.melchersystem.com/2010/09/07/the-everywhere-image/

Quote
Just when you thought is was over, it starts again, like a bloody headache. Getty Images, the agency that suffers and profits the most from micro stock is about to launch a cross brand collection. Called the Agency Collection, at least on Istock,  it will be priced at a premium to Vetta and will be available on iStock, Getty Images, Jupiter and PunchStock.

It will include images from Getty Images, but also from Istock contributors.

Why is this important ? Because this will be the first time that the same image will be available on all brands owned by Getty Images. Will they be priced the same? The post from Istock Kelly Thomspon doesnt say, although the mention that they will be priced at a premium to Vettaseems to indicate that there is a good chance they will be.

A long awaited natural step, this cross brand collection will give Getty a lot of valuable data.

First and foremost, it will show which brand is the most successful at selling these images. If Istockphoto sells more than twenty times what Getty images has sold, you can be sure that will prompt the Seattle giant to revisit the need for sales people, something they are trying hard to prove. If Punchstock doesnt sell any, they might shut down that brad.. And so on.

It will also show if an image sells better if available on multiple sites at the same time. In theory, it should be.

Istockphoto certainly has an edge in this competition. Not only it is a 100% royalty free platform, unlike the others, but  it has much, much more traffic than the others, which, for RF, is critical.


« Reply #602 on: September 10, 2010, 05:26 »
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iStock's movement, now on wikipedia!!:

"In September 2010, Getty Images iStock Photo Brand announced plans to cut payments to contributors by as much as 25% starting in 2011, while claiming that it furthered the interest of those same contributors. Getty's motivation was greeted with skepticism by the iStock community.[4]"

[4] http://www.istockphoto.com/forum_messages.php?threadid=251812&page=1

http://en.wikipedia.org/wiki/Getty_Images

Microbius

« Reply #603 on: September 10, 2010, 05:36 »
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A couple weeks ago they said they were paying out $1.7 million a week in royalties. At the first of the year I believe it was $1.2 million. Let's assume $1.7 million for the whole 52 weeks. That's about $88 million paid out to contributors in a year. Is he saying it costs $212 million a year to operate that web site? What is the staff being paid? Sure money is spent on advertising, but really how much "profit" do they need?? They expected to grow revenue 50% in 2010. The payout to contributors sure hasn't grown by 50%. I don't see any way that he could argue that the business has "become less profitable with increased success."

It's all just BS, Getty gave the new CEO that target. New CEO has to meet +50%. No sustainable way to reach that crazy level of growth, so they take the easy route and screw their contributors. It's easy to say IStock is run independently of Getty, but when they set the targets to cover the price they paid for the company and the targets are crazy unobtainable by steady growth blam, it's grab the soap time for me and you.

« Reply #604 on: September 10, 2010, 07:37 »
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A couple weeks ago they said they were paying out $1.7 million a week in royalties. At the first of the year I believe it was $1.2 million. Let's assume $1.7 million for the whole 52 weeks. That's about $88 million paid out to contributors in a year. Is he saying it costs $212 million a year to operate that web site? What is the staff being paid? Sure money is spent on advertising, but really how much "profit" do they need?? They expected to grow revenue 50% in 2010. The payout to contributors sure hasn't grown by 50%. I don't see any way that he could argue that the business has "become less profitable with increased success."

It's all just BS, Getty gave the new CEO that target. New CEO has to meet +50%. No sustainable way to reach that crazy level of growth, so they take the easy route and screw their contributors. It's easy to say IStock is run independently of Getty, but when they set the targets to cover the price they paid for the company and the targets are crazy unobtainable by steady growth blam, it's grab the soap time for me and you.

Profit and revenue are two different things.  Business school wasn't that hard for me, and the distinction between both is pretty clear.  You can have 500% growth in revenue and -200% growth in profit.

« Reply #605 on: September 10, 2010, 07:42 »
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You can have 500% growth in revenue and -200% growth in profit.

the only thing you need for that is an incredibly bad management... ;D

« Reply #606 on: September 10, 2010, 08:06 »
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You can have 500% growth in revenue and -200% growth in profit.

the only thing you need for that is an incredibly bad management... ;D

:) yes...or the quest for rapid growth while spending a lot to attain it with the hopes that you can slow the expenses down in the future.

while I won't be affected by the changes (in fact, i might actually be bumped up a level), I don't necessarily agree with any of the statements that iStock isn't profitable enough or can't make money at this pace.  In fact, I think its preposterous that they are having a hard time doing what they are doing at an average of probably 25% royalties. 

What really blows my mind is that the NHL has 55% of its revenue going to player salaries and for the most part it makes good money despite what they are saying.  Yet an internet company with no real overhead compared to the NHL can't do the same thing.  Thats BS.

« Reply #607 on: September 10, 2010, 08:12 »
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Here is something that makes me angry.  The iStockcharts folks emailed this to me this morning.

Quote

We've got 5531 exclusive contributors in our contributor charts:

base contributors          105 ( 1.9%)
bronze contributors       2417 (43.7%)
silver contributors       1647 (29.8%)
gold contributors          760 (13.7%)
diamond contributors       574 (10.4%)
blackdiamond contributors   28 ( 0.5%)

Kelly says 76% of exclusives will not take a hit.   43.7% of them won't because they are bronze.   Another 29.8% are silver, and stand a fairly good chance of hitting that low 2000 credit target.  Add in the 1.9% base contributors that are guaranteed to go up.  That is 75.4% of exclusives.

iStock is gunning for your royalties golds and diamonds, I guess we now know why the silver target was set so comparatively low.  It makes it easier for them to say that 76% of people will not see a change.
« Last Edit: September 10, 2010, 08:19 by dgilder »

« Reply #608 on: September 10, 2010, 08:23 »
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Here is something that makes me angry.  The iStockcharts folks emailed this to me this morning.

Quote

We've got 5531 exclusive contributors in our contributor charts:

base contributors          105 ( 1.9%)
bronze contributors       2417 (43.7%)
silver contributors       1647 (29.8%)
gold contributors          760 (13.7%)
diamond contributors       574 (10.4%)
blackdiamond contributors   28 ( 0.5%)

Kelly says 76% of exclusives will not take a hit.   43.7% of them won't because they are bronze.   Another 29.8% are silver, and stand a fairly good chance of hitting that low 2000 credit target.  Add in the 1.9% base contributors that are guaranteed to go up.  That is 75.4% of exclusives.

iStock is gunning for your royalties golds and exclusives, I guess we now know why the silver target was set so comparatively low.  It makes it easier for them to say that 76% of people will not see a change.

I think we can also conclude, that with the new 15- 19% for independents, they also wanted to make i clear, that those are not very welcome.

So - they aim for exclusive content, high volume shooters (new content all the time) and volume sellers.
This will further make the IS collection very streamlined micro-like boring content.
They will loose at lot af the less mainstream pictures, that made the collection interesting for some buyers who lokked for something out of the ordinary. Perhaps they replace this with the Getty content?

PaulieWalnuts

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« Reply #609 on: September 10, 2010, 08:25 »
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You can have 500% growth in revenue and -200% growth in profit.
the only thing you need for that is an incredibly bad management... ;D

It's not bad management. It's desparate or greedy management depending on the person. Depends on which type of person you believe Kelly is.

Kelly may be telling the truth that this new model didn't come from up above. But what did come from up above were probably some insane revenue and profit goals. "Kelly, here are your goals. You are expected to meet these for 2011." So Kelly came up with this model to either keep his job (desparate) or get a big fat bonus (greedy). Unfortunately after he spent 9 months of going through the numbers he realized some drastic changes had to be made to meet those goals.

- He changed to a performance model. Not enough. Still short of goal.
- He cut commissions a little. Still short of goal.
- He cut commissions more. Still short of goal.
- He raised performance goals. Still short of goal.
- So why did he cut the extended license bonus? He had to. Every little bit counts

H&F/Getty set the goals. Management are making decisions based on the goals.
« Last Edit: September 10, 2010, 08:27 by PaulieWalnuts »

bittersweet

« Reply #610 on: September 10, 2010, 08:48 »
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Has anyone else noticed a connection between istock's announcement and a rash of obnoxious spamming?

« Reply #611 on: September 10, 2010, 08:51 »
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Vultures are flying low now, lol

« Reply #612 on: September 10, 2010, 08:58 »
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« Reply #613 on: September 10, 2010, 08:59 »
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It's not bad management. It's desparate or greedy management depending on the person. Depends on which type of person you believe Kelly is.

Kelly may be telling the truth that this new model didn't come from up above. But what did come from up above were probably some insane revenue and profit goals. "Kelly, here are your goals. You are expected to meet these for 2011." So Kelly came up with this model to either keep his job (desparate) or get a big fat bonus (greedy). Unfortunately after he spent 9 months of going through the numbers he realized some drastic changes had to be made to meet those goals.

- He changed to a performance model. Not enough. Still short of goal.
- He cut commissions a little. Still short of goal.
- He cut commissions more. Still short of goal.
- He raised performance goals. Still short of goal.
- So why did he cut the extended license bonus? He had to. Every little bit counts

H&F/Getty set the goals. Management are making decisions based on the goals.

I tend to disagree. Acting out of either greed or despair is bad management.
Good management includes to stand up against unachievable performance goals coming down from company owners - even if it means you're getting yourself in trouble.

I agree that what you describe is a very likely explanation of what is happening though.

« Last Edit: September 10, 2010, 09:05 by peresanz »

« Reply #615 on: September 10, 2010, 09:04 »
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Did anyone notice this?


Wow  Wonder how long it will be before others sites smell blood too.

« Reply #616 on: September 10, 2010, 09:05 »
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Here is something that makes me angry.  The iStockcharts folks emailed this to me this morning.

Quote

We've got 5531 exclusive contributors in our contributor charts:

base contributors          105 ( 1.9%)
bronze contributors       2417 (43.7%)
silver contributors       1647 (29.8%)
gold contributors          760 (13.7%)
diamond contributors       574 (10.4%)
blackdiamond contributors   28 ( 0.5%)

Kelly says 76% of exclusives will not take a hit.   43.7% of them won't because they are bronze.   Another 29.8% are silver, and stand a fairly good chance of hitting that low 2000 credit target.  Add in the 1.9% base contributors that are guaranteed to go up.  That is 75.4% of exclusives.

iStock is gunning for your royalties golds and diamonds, I guess we now know why the silver target was set so comparatively low.  It makes it easier for them to say that 76% of people will not see a change.

I think that you should also understand (not that I agree with them) that they think its okay to lower your percentages because they think they will make more overall revenue which means you will stay at the same nominal value, while your percentage decreases.  Now unless they are brilliant fortune tellers, I can't say that they will be right 100% and given that they can't run their business while only having to pay out 20%, I wouldn't trust these estimates at all.  Plus when is it okay to take 25% away because you think that you will give the same amount back in increased revenues.  All that means is that they are taking future revenues away from you and keeping you at the same level.


helix7

« Reply #618 on: September 10, 2010, 09:07 »
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... And what happens if istock decides to make adjustments that are more acceptable to contributors. Are those buyers coming back? Probably not...

Good, let them stay at the agencies that pay us better. Why would we want buyers to stick with istock where we only get 20%?

Microbius

« Reply #619 on: September 10, 2010, 09:09 »
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I just took a step back and reassessed the IStock changes. If you think about what they say they are trying to, reward contributors for what they are contributing now rather then the legacy stuff they uploaded, the changes look even stupider and unnecessarily convoluted.
If their goal is really this why not just offer flat percentages, one rate for exclusive one for nonexclusives. Those who sell more make more, why bother with the tiered system at all. I wonder if this is where they are heading (?)


« Reply #621 on: September 10, 2010, 09:12 »
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I just took a step back and reassessed the IStock changes. If you think about what they say they are trying to, reward contributors for what they are contributing now rather then the legacy stuff they uploaded, the changes look even stupider and unnecessarily convoluted.
If their goal is really this why not just offer flat percentages, one rate for exclusive one for nonexclusives. Those who sell more make more, why bother with the tiered system at all. I wonder if this is where they are heading (?)

I'm totally okay with a tiered system.  I think that those who show accelerated growth should be rewarded heavily.  However, I don't think they should burn out the long term contributors either.  Sustainable growth is just as important as having a spectacular year. 

lisafx

« Reply #622 on: September 10, 2010, 09:14 »
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I just took a step back and reassessed the IStock changes. If you think about what they say they are trying to, reward contributors for what they are contributing now rather then the legacy stuff they uploaded, the changes look even stupider and unnecessarily convoluted.
If their goal is really this why not just offer flat percentages, one rate for exclusive one for nonexclusives. Those who sell more make more, why bother with the tiered system at all. I wonder if this is where they are heading (?)

The reason their rationalizations don't make sense is because they are flat out untrue.  

If they really wanted to reward high performing contributors they would not have made the top goal so completely unreachable even for their top performers. 

« Reply #623 on: September 10, 2010, 09:20 »
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Kelly says 76% of exclusives will not take a hit.   43.7% of them won't because they are bronze.   Another 29.8% are silver, and stand a fairly good chance of hitting that low 2000 credit target.  Add in the 1.9% base contributors that are guaranteed to go up.  That is 75.4% of exclusives.

iStock is gunning for your royalties golds and diamonds, I guess we now know why the silver target was set so comparatively low.  It makes it easier for them to say that 76% of people will not see a change.

Even if you maintain your current level, is it safe to say that any serious advancement is dead in the water for most people?

« Reply #624 on: September 10, 2010, 09:33 »
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@Loop,
Oh, please. Baldrick is right.
There are a lot of exclusives who don't give a  d*** about what happens to independents. Not only that, but deep down they harbour this lovely hope that independents get crushed further and further - commissions, best match - search position, exposure, collections access - , give nothing to independents, let them rot.
This is OUR site, We built it, We deserve every perk, it's US, the Exclusives who should get all the rewards. Independents are kindly invited to bear the blows and rot in hell.  
It's a common attitude and one of the main reasons I never wanted to be part of the 'crowned' group. Not cool. At all.
Of course Baldrick is right. And don't ask me to cut and paste, it's stupid, but I might well do it.
That doesn't mean that every exclusive is guilty.
And it's definitely not a subject we should be discussing right now.

What bothers me right now is this - how far is too far?
How many independents are willing to take the cut and submit their images for 15 % commission? Probably most of them.
I strongly belive that there's no such thing as 'going too far' in the world of microstock photographers.  10% commission is fine, and so is 5.
0.25 cents is better than nothing and the race is on.
« Last Edit: September 10, 2010, 09:35 by Eireann »


 

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