Author Topic: iStock to start Subscription packages. (Read 49417 times)

vonkara · « **Reply #100 on:** April 04, 2008, 16:43 »

Quote from: hatman12 on April 04, 2008, 16:36

The microstock world just changed.

I just call my clairvoyant about this. She said that I will become a sailor ??

bittersweet · « **Reply #101 on:** April 04, 2008, 16:55 »

Quote from: Pixart on April 04, 2008, 16:34

Isn't anyone else thinking if it sounds too good to be true?? it's a little ridiculous, one person getting a whole day's royalties if that's the only photo sold that day - isn't it? $26? Trust me, they are only doing something this outrageous to keep the Exclusives from jumping ship. It will change. I give it 6 - 12 months and there will be a new controversy, just like this one.

At least you'll have something positive to look forward to.

leaf · « **Reply #102 on:** April 04, 2008, 17:15 »

Quote from: fotografer on April 04, 2008, 16:31

Quote from: sharply_done on April 04, 2008, 16:22
Quote from: bittersweet on April 04, 2008, 16:00
Don't know what AAC6D63 is exactly responding to, but I think the others may have been referring to the similarities between my username and a certain istock celebrity.

Yep, like maybe this guy.

Yep, that's the one

ahh thanks. ok

GeoPappas · « **Reply #103 on:** April 04, 2008, 17:23 »

Quote from: yingyang0 on April 04, 2008, 16:21

So there isn't an added risk for contributors really unless I'm missing something.

I think that this does indeed sound a little too good to be true, but we'll have to wait and see.

For instance, the two examples that were given in the IS thread (http://www.istockphoto.com/forum_messages.php?threadid=67685&page=1) do not contain enough detail for me:

Quote

Contributors stand to make more per file than they've ever made before from iStock. Here are two examples of what a non-exclusive can make off subscriptions:
- If a subscriber with a daily credit limit of 480 uses only 10 credits that day, all on one of your files, you'd earn 480 × 20% × $130*. That means a payout of about $26 for your single file.
- If a subscriber with a daily credit limit of 30 uses only 10 credits that day, including 5 credits on your image, you'd earn (30/2) × 20% × $10*. A payout of about $1.

* These values are 'Credit Package Value per Day', and have not been set yet. They are for illustrative purposes only.

In the first example, it shows a buyer that has a daily credit limit of 480! 480 seems like an awful lot of credits for one day.

Interestingly enough, the credits "value" is stated as only $130. That calculates to a cost of 0.27/credit for the buyer, which is almost exactly the same as the cost of an image on SS ($199 for 750 images or 0.265/image).

But if you calculate the cost of the subs package for a month ($130/day * 30 days), then it comes to $3,900/month. I can't imagine someone spending that much money for a month (but what do I know).

PaulieWalnuts · « **Reply #104 on:** April 04, 2008, 17:23 »

Quote from: hatman12 on April 04, 2008, 16:36

The microstock world just changed.

You got that right brother...

bittersweet · « **Reply #105 on:** April 04, 2008, 17:45 »

Quote from: GeoPappas on April 04, 2008, 17:23

Quote from: yingyang0 on April 04, 2008, 16:21
So there isn't an added risk for contributors really unless I'm missing something.

I think that this does indeed sound a little too good to be true, but we'll have to wait and see.

For instance, the two examples that were given in the IS thread (http://www.istockphoto.com/forum_messages.php?threadid=67685&page=1) do not contain enough detail for me:

Quote
Contributors stand to make more per file than they've ever made before from iStock. Here are two examples of what a non-exclusive can make off subscriptions:
- If a subscriber with a daily credit limit of 480 uses only 10 credits that day, all on one of your files, you'd earn 480 × 20% × $130*. That means a payout of about $26 for your single file.
- If a subscriber with a daily credit limit of 30 uses only 10 credits that day, including 5 credits on your image, you'd earn (30/2) × 20% × $10*. A payout of about $1.

* These values are 'Credit Package Value per Day', and have not been set yet. They are for illustrative purposes only.

In the first example, it shows a buyer that has a daily credit limit of 480! 480 seems like an awful lot of credits for one day.

Interestingly enough, the credits "value" is stated as only $130. That calculates to a cost of 0.27/credit for the buyer, which is almost exactly the same as the cost of an image on SS ($199 for 750 images or 0.265/image).

But if you calculate the cost of the subs package for a month ($130/day * 30 days), then it comes to $3,900/month. I can't imagine someone spending that much money for a month (but what do I know).

I kinda thought from this statement:

Quote

* These values are 'Credit Package Value per Day', and have not been set yet. They are for illustrative purposes only.

that these numbers were picked randomly to give an example of how the numbers would be calculated (and were purposely unrealistic so as not to be quoted as an actual pricing structure). I could be wrong, though. The part about the minimum credit value is pretty straightforward, in my opinion, and I think that is the part that most alarmed contributors who voiced concerns about the idea.

hatman12 · « **Reply #106 on:** April 04, 2008, 17:46 »

"Interestingly enough, the credits "value" is stated as only $130. That calculates to a cost of 0.27/credit for the buyer, which is almost exactly the same as the cost of an image on SS ($199 for 750 images or 0.265/image)...."

That's a very astute observation Geopappas. But remember that iStock will 'guarantee' a minimum value per credit of 96c for the photographers, so 96c x 20% = 19c minimum payment per credit.

If the overall pricing is similar to SS, the big differences are: IS charge more for higher rez images, and, photographers get paid based on the subscriber's maximum daily limit whether that limit is spent or not.

The REALLY big difference is the scheme whereby a single sale in a day can attract payment based on 100% of that day's allowance, generating the occasional very large commission payment for a single sale.

The fact that iStock is prepared to assume that 100% of each day's allowance is 'spent' must suggest that their research determines that the number of days when a subscriber makes no purchase at all must be very large, and confirms what Yuri has been saying that the payout ratio at SS is quite small.

The big impact of this new scheme will be felt at DT, StockXpert and 123, who will now be seen to be quite miserly (and in fact unacceptable) compared to iStock.

GeoPappas · « **Reply #107 on:** April 04, 2008, 17:53 »

Quote from: hatman12 on April 04, 2008, 17:46

The big impact of this new scheme will be felt at DT, StockXpert and 123, who will now be seen to be quite miserly (and in fact unacceptable) compared to iStock.

Those were my thoughts exactly. That is why I started another thread on this topic (here http://www.microstockgroup.com/index.php/topic,4164.msg40940/topicseen.html#new).

I feel that the other sites will definitely be looking at this new model, especially SS (since they are coming out with their royalty increase next month).

I also feel that some submitters might possibly change their alliances if things turn out the way IS seems to indicate.

CofkoCof · « **Reply #108 on:** April 04, 2008, 17:56 »

Quote from: hatman12 on April 04, 2008, 17:46

The fact that iStock is prepared to assume that 100% of each day's allowance is 'spent' must suggest that their research determines that the number of days when a subscriber makes no purchase at all must be very large, and confirms what Yuri has been saying that the payout ratio at SS is quite small.

Also if the whole days allowance wasn't spent IS benefits the most. They get 60-80% of it.

hatman12 · « **Reply #109 on:** April 04, 2008, 17:57 »

The last part of this statement from kthomson:

"Yes. We'll guarantee the same minimum payout as we do today on the Pay-as-you-go side. So right now, the lowest priced (non-sale) credit is 96¢. You receive 20 to 40% of that. Clear canisters will receive a minimum 19¢ and Diamonds will receive a minimum 38¢. And yes, this means that sometimes iStock will be paying out more than we take in per credit...."

...suggests that iStock subscribers will indeed be buying credits at less than 38c.

DanP68 · « **Reply #110 on:** April 04, 2008, 18:00 »

The clarification is good news. But it doesn't change the fact that sub sales have cannibalized credit sales at the other sites which have run a dual format. The iStock sub program is better than the SS sub program for contributors. But if it comes at the expense of credit sales, then earnings will drop, not rise. I'm sorry, but I'm not getting excited about this.

bittersweet · « **Reply #111 on:** April 04, 2008, 18:05 »

Quote from: CofkoCof on April 04, 2008, 17:56

Quote from: hatman12 on April 04, 2008, 17:46
The fact that iStock is prepared to assume that 100% of each day's allowance is 'spent' must suggest that their research determines that the number of days when a subscriber makes no purchase at all must be very large, and confirms what Yuri has been saying that the payout ratio at SS is quite small.
Also if the whole days allowance wasn't spent IS benefits the most. They get 60-80% of it.

... and the contributors get 20-40% of it, where at other sites they get nothing of this surplus.

If a subscription sales won't generate less per credit than I'm making now, I don't see how my per image sales will be "cannibalized", plus each subscription sale comes with a "virtual lottery ticket" that may increase the royalty unexpectedly if the customer does not max out that day.

hatman12 · « **Reply #112 on:** April 04, 2008, 18:13 »

That's an excellent phrase, bitter - "virtual lottery ticket". I like it.

Yes, this is a great scheme where contributors cannot be paid less than they earn at present, and every sale comes with that added bonus of the 'virtual lottery ticket'.

CofkoCof · « **Reply #113 on:** April 04, 2008, 18:23 »

Quote from: bittersweet on April 04, 2008, 18:05

Quote from: CofkoCof on April 04, 2008, 17:56
Quote from: hatman12 on April 04, 2008, 17:46
The fact that iStock is prepared to assume that 100% of each day's allowance is 'spent' must suggest that their research determines that the number of days when a subscriber makes no purchase at all must be very large, and confirms what Yuri has been saying that the payout ratio at SS is quite small.
Also if the whole days allowance wasn't spent IS benefits the most. They get 60-80% of it.
... and the contributors get 20-40% of it, where at other sites they get nothing of this surplus

I know, but I wanted to point out, that it's not only the days without sales that will bring extra money to IS. And it's 20-40% if the buyer purchased only one of your pictures. Otherwise you have to split that between all the contributors.

yingyang0 · « **Reply #114 on:** April 04, 2008, 19:24 »

Quote from: bittersweet on April 04, 2008, 18:05

Quote from: CofkoCof on April 04, 2008, 17:56
... and the contributors get 20-40% of it, where at other sites they get nothing of this surplus.
If a subscription sales won't generate less per credit than I'm making now, I don't see how my per image sales will be "cannibalized", plus each subscription sale comes with a "virtual lottery ticket" that may increase the royalty unexpectedly if the customer does not max out that day.

Exactly what I said on pg. 2 of this thread. It will cannibalize, but for the better. The "cannibalized" downloads will earn the same or more than they would have before.

Dan doesn't yet seem to understand how different this program is from the other subscription sites. I know it shocked . out of me.

DanP68 · « **Reply #115 on:** April 04, 2008, 20:38 »

I've seen the example repeated several times of a 1 credit sub sale yielding 19c to an independent contributor. That's less than what I currently make with iS XS sales.

I average nearly $1.00 per sale at iStock these days. I'll be shocked if this sub plan doesn't trump that average.

Waldo4 · « **Reply #116 on:** April 04, 2008, 20:53 »

Quote from: yingyang0 on April 04, 2008, 19:24

Quote from: bittersweet on April 04, 2008, 18:05
Quote from: CofkoCof on April 04, 2008, 17:56
... and the contributors get 20-40% of it, where at other sites they get nothing of this surplus.
If a subscription sales won't generate less per credit than I'm making now, I don't see how my per image sales will be "cannibalized", plus each subscription sale comes with a "virtual lottery ticket" that may increase the royalty unexpectedly if the customer does not max out that day.
Exactly what I said on pg. 2 of this thread. It will cannibalize, but for the better. The "cannibalized" downloads will earn the same or more than they would have before.

Dan doesn't yet seem to understand how different this program is from the other subscription sites. I know it shocked . out of me.

Istock is trying to attract every halfway decent stock photographer to go exclusive with them. They will exert complete and utter dominance over the market if that happens. They will be free to price at will and do just about anything they want. They would have a virtually unlimited supply of good photographers for their macro business and would not have to worry about their macro competition stealing their well trained photographers. Their only micro competition would be the bargain basement shops that take everything. They figured out the way to destroy their competition, steal all of their good contributers. The more exclusives that they get, the more they can sink their claws in their competition by raising their prices and paying their contributers more, further gaining more exclusives. With each exclusive they gain their competition gets a little worse, making them even more attractive to buyers, allowing them to further raise prices, gain more exclusives, and hurt their competition even more. It would not surprise me on bit if in 2-3 years, IS prices are 3-5X what they are now, and each contributer makes 3-5x more per download, and the % of people exclusive is very high, yet despite their rising prices their traffic skyrockets as they have no competition to their quality. The only thing that could be done to prevent this is the other sites getting together and raising commissions almost simultaneously with IS, so that when IS raises prices and commissions, and contributers hit that exclusivity calculator link, they aren't left with an overwhelmingly easy decision to go exclusive. (ask yourself, if IS raised commissions 300% tomorrow, how long would it take you to go exclusive with them (and virtually double that 300% to 600%). I suspect most here would do it in a heartbeat).

hatman12 · « **Reply #117 on:** April 04, 2008, 21:30 »

I respect your views Waldo, but I don't think you're right in this instance. And the clue is given by the IS 'best match' search - exclusives are given 8 spaces in the top 100 and non-exclusives are given 4 spaces. If IS wanted to dominate with its exclusive portfolio, exclusives would have all the spaces in the top 100 and non-exclusives wouldn't get a look in.

What iStock wants is 'just enough' exclusives to make it 'different' and 'appealing' to customers. But not so many that it ends up paying out 40% commissions to everyone. It wants the right balance between exclusives and non-exclusives. Top heavy in exclusives would destroy its financing.

And if it becomes all powerful in the industry, that would mean lower payments to contributors, not higher; whenever a corporation gains complete control it is always the suppliers that end up with lower margins.

Waldo4 · « **Reply #118 on:** April 04, 2008, 22:54 »

Quote from: hatman12 on April 04, 2008, 21:30

And if it becomes all powerful in the industry, that would mean lower payments to contributors, not higher; whenever a corporation gains complete control it is always the suppliers that end up with lower margins.

Short term financing matters not compared to long term benefits. As the exclusive level gets too high, raise prices to the subscribers, (which raises commissions a little too, but priced to overshoot the exclusive overpayment). You are right that in the end the photographers get the shaft....however, that cannot occur until their competition is beaten. As is they cannot beat the competition by offering a cheaper product than the competition, the only way that they can beat the competition is to offer a product so superior that the difference in price is minor compared to the difference in quality. The only way to do that...steal all of their contributers. The only way to do that...give 'em an offer they can't refuse. Once the competition is beaten into submission, then the place too eek out profits is to turn the attention to the contributers and slowly but surely give them the shaft, but with minor competition they have no choice but to accept. Until that time come that contributers get the shaft, IMO IS is going to change the market to reward us as much as possible in their fight for supremacy, if my thinking is right, it is a very good time to be a MS photographer as the war for the best contributers will line peoples pockets. At least I can hope. It is a sound business strategy on their part, especially with the financial backing of Getty to make it happen, that they can live with a short term zero profit or even operating in the red to crush their competitors. They are the only company that is really poised and positioned to really make a power grab and consolidate the industry, this might be the beginnings of it.

RacePhoto · « **Reply #119 on:** April 04, 2008, 23:31 »

I'll wait until the actual numbers come out, but if the "virtual photo lottery" is reality, it sounds interesting.

Waldo, the reason why your theories won't become reality is the same reason why we don't have only McDonald's in the burger business, it's why we don't only have two soft drink companies, why there are still many auto makers and why in any other industry, the one big company can't drive out all the competition and dominate, as you have suggested.

Some will fall, some little ones will survive in specialty markets and a few of the big ones will continue to compete in the marketplace. Also some of the other large agencies will combine resources, whether through mergers or acquisitions.

They aren't just going to be stomped out by all the best photographers going exclusive with iStock. There is a virtually unlimited supply of good photographers that can fill the holes left by anyone going exclusive with one agency.

If this plan is what it is being touted as, which is an increase for everyone, then it's good news and other agencies will follow with the same or some counter program to sweeten the pot. Nothing better for us than to have the agencies competing by offering us more money, or more profit for our photos!

ironarrow · « **Reply #120 on:** April 05, 2008, 00:02 »

As this is my first post ever I would like to say hello to everyone..

I don't see any of the sites beating the rest and Eating them like the "cookie monster"..

It all comes down to us.. I contribute to the top 7 sites listed on the right and I will never consider becoming an exclusive.. I don't see the logic behind it.. I see exclusives as an unlucky minority who never had the chance to really discover what can happen if they fully take the time to equally submit to all the big 6..

If they would listen to me (which they won't) I would suggest all exclusives to quit and start submitting everywhere they can.. Only in that case it's a "Win Win" situation for photographers..

Seriously, why to let Istock take over your lives

I feel very good and I don't care which stock website wins.. I win anyway

I would like to see us all independent.. My utopia is a stock photo world where no one goes exclusives.. Then I wouldn't worry until it's the end of the world..

Best wishes for All of "us"..
Just remember our fate is in our hands..

Waldo4 · « **Reply #121 on:** April 05, 2008, 00:03 »

Quote from: RacePhoto on April 04, 2008, 23:31

I'll wait until the actual numbers come out, but if the "virtual photo lottery" is reality, it sounds interesting.

Waldo, the reason why your theories won't become reality is the same reason why we don't have only McDonald's in the burger business, it's why we don't only have two soft drink companies, why there are still many auto makers and why in any other industry, the one big company can't drive out all the competition and dominate, as you have suggested.

Some will fall, some little ones will survive in specialty markets and a few of the big ones will continue to compete in the marketplace. Also some of the other large agencies will combine resources, whether through mergers or acquisitions.

They aren't just going to be stomped out by all the best photographers going exclusive with iStock. There is a virtually unlimited supply of good photographers that can fill the holes left by anyone going exclusive with one agency.

If this plan is what it is being touted as, which is an increase for everyone, then it's good news and other agencies will follow with the same or some counter program to sweeten the pot. Nothing better for us than to have the agencies competing by offering us more money, or more profit for our photos!

There is an unlimited supply of photographers, however there isn't an unlimited supply of time. If IS steals a bunch then steals a bunch of customers because of it, noobs aren't going to come in and replace the guys going exclusive overnight, to get to the level of the exclusives that left, it will take months, if not years to develop the quality and depth of portfolios that they are replacing.

The difference between this situation and McDonalds for example, is that McDonalds hasn't figured out a way to make make all of the ranchers that supply them with meat, only supply them with meat and nobody else, and all decent ranchers sell to McDonalds. Therefore all other burger joints are selling low grade crap compared to what McDonalds is selling because they have a partial monopoly on all of the good beef available from ranchers.

fotografer · « **Reply #122 on:** April 05, 2008, 01:25 »

Hi Waldo4 your posts are very interesting but really hard going to read. Can you do us a favour and use a few paragraphs because I find myself skipping the last half which is a shame.

Quote from: Waldo4 on April 04, 2008, 20:53

Quote from: yingyang0 on April 04, 2008, 19:24
Quote from: bittersweet on April 04, 2008, 18:05
Quote from: CofkoCof on April 04, 2008, 17:56
... and the contributors get 20-40% of it, where at other sites they get nothing of this surplus.
If a subscription sales won't generate less per credit than I'm making now, I don't see how my per image sales will be "cannibalized", plus each subscription sale comes with a "virtual lottery ticket" that may increase the royalty unexpectedly if the customer does not max out that day.
Exactly what I said on pg. 2 of this thread. It will cannibalize, but for the better. The "cannibalized" downloads will earn the same or more than they would have before.

Dan doesn't yet seem to understand how different this program is from the other subscription sites. I know it shocked . out of me.

Istock is trying to attract every halfway decent stock photographer to go exclusive with them. They will exert complete and utter dominance over the market if that happens. They will be free to price at will and do just about anything they want. They would have a virtually unlimited supply of good photographers for their macro business and would not have to worry about their macro competition stealing their well trained photographers. Their only micro competition would be the bargain basement shops that take everything. They figured out the way to destroy their competition, steal all of their good contributers. The more exclusives that they get, the more they can sink their claws in their competition by raising their prices and paying their contributers more, further gaining more exclusives. With each exclusive they gain their competition gets a little worse, making them even more attractive to buyers, allowing them to further raise prices, gain more exclusives, and hurt their competition even more. It would not surprise me on bit if in 2-3 years, IS prices are 3-5X what they are now, and each contributer makes 3-5x more per download, and the % of people exclusive is very high, yet despite their rising prices their traffic skyrockets as they have no competition to their quality. The only thing that could be done to prevent this is the other sites getting together and raising commissions almost simultaneously with IS, so that when IS raises prices and commissions, and contributers hit that exclusivity calculator link, they aren't left with an overwhelmingly easy decision to go exclusive. (ask yourself, if IS raised commissions 300% tomorrow, how long would it take you to go exclusive with them (and virtually double that 300% to 600%). I suspect most here would do it in a heartbeat).

lisafx · « **Reply #123 on:** April 05, 2008, 09:38 »

Withdrawn....

bittersweet · « **Reply #124 on:** April 05, 2008, 09:53 »

Darn it. I would have been really interested in your take on this, Lisa.

MicrostockGroup Sponsors

Author Topic: iStock to start Subscription packages. (Read 49417 times)

vonkara

bittersweet

leaf

GeoPappas

PaulieWalnuts

bittersweet

hatman12

GeoPappas

CofkoCof

hatman12

DanP68

bittersweet

hatman12

CofkoCof

yingyang0

DanP68

Waldo4

hatman12

Waldo4

RacePhoto

ironarrow

Waldo4

fotografer

lisafx

bittersweet

Related Topics

Sponsors

Microstock Poll Results

Sponsors