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Author Topic: Looking to purchase Istock portfolios.  (Read 20715 times)

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« Reply #25 on: September 25, 2010, 16:08 »
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I suspect you'll struggle to agree a value with anyone. A portfolio seller tends to have an optimistic view on future returns (assumes that income will continue largely at current levels) whereas the buyer tends to take a much more pessimistic view (assumes that the income will fall due to competition, etc).

For instance I would only consider selling my port for 3x annual earnings minimum. However if I were buying I'd be unlikely to pay more than 2x for someone else's port.

Interesting topic. I'd never really thought about the value before. Gostwyck's estimate sounds about right though. I think it it would take me 2 to 4 years to build up my business again from scratch, so I think something in that range of 2x to 4x the annual earnings sounds correct.
« Last Edit: September 25, 2010, 16:10 by cthoman »


« Reply #26 on: September 25, 2010, 16:17 »
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« Last Edit: July 16, 2014, 14:40 by attator »

« Reply #27 on: September 25, 2010, 16:52 »
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I wouldn't sell my portfolio, but here are a couple of other issues for you to think through for transactions you might do - assuming iStock has no issues. It'd be good to know if you were allowed to keep the redeemed credit total of the year to date when the purchase occurred.

1) Would you require the seller to leave istock or could they build a new portfolio?

2) What rules on similars would you want to impose? I don't think I'm the only contributor who uses my own setting or family as models. If I can do a new shot of pumpkins at my front door or Christmas decorations around my fireplace to compete with the ones I sold you, you might not like that. OTOH I can't see agreeing never to use a particular model or set again.

3) If I were to sell to you and then start up again as an independent, to  the extent that any style I had showed in my work, you're then looking at competition from multiple sites. OTOH this isn't much different from one of Yuri's former workers becoming an iStock exclusive in that their photos look just about identical, so perhaps the issue isn't new.

4) What happens to model releases in such situations? I assume you'd want them all handed over along with the images.

5) Would the contract allow the seller to keep copies of the files for personal or portfolio use even if they never licensed them again?

6) Does this apply to photos only? Vectors provide a more complex set of issues as components can be reused in new illustrations in ways that don't apply to photos.

« Reply #28 on: September 25, 2010, 16:59 »
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I'd be really surprised if Istock would go for this.  Lots of overhead in working out the transfer (internal to Istock) and assuring themselves that IP ownership was clear.  Bigger issue is that they might actually find themselves paying out royalties they claimed were possible but never expected to actually have to pay out.  :) They might also worry that as consolidation within Istock took place, a few big contributors would eventually have lots more negotiating power because they could threaten to walk with lots and lots of images.  
« Last Edit: September 25, 2010, 17:01 by Sadstock »

« Reply #29 on: September 25, 2010, 17:13 »
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Gostwyck: You are essentially correct, and there is no true "intrinsic value" to a given portfolio. each one has his own figures and alternatives for the $$. its called the wonderfull world of financing (I spend 3 years studying it...). am I to understand your port is for sale ?

Jsnover: you indeed raise very important questions regarding such a deal, the answers of which will also affect final price.  they also change from person to person because of different port content (isolated on white VS family pics for example).
I rather cross these bridges once a serius seller comes along and after I get an OK from IS.
In todays world where multi bilion dollar corporations (did somebody say getty?) buy and sell other mulit bilion dollar corporations I am sure that such obstacles can be over come with some good will and negotiations.

I realy can't understand how there are so many contributotors out there and no way for effectivly selling complete ports/photos to one another.
its essentially like owning an yeilding asset (like a stock or corporate bond) with out the ability to sell the asset itself...

lisafx

« Reply #30 on: September 25, 2010, 17:15 »
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Extremely good points Sadstock ^^.  This doesn't sound like a well reasoned game plan to me at all.  

FWIW, if I were selling my portfolio (which I am not), I would want the money up front.  What point is there to selling a portfolio but then taking on the risk of accepting a % of future sales instead of an up-front payment?!  The most attractive thing about selling would seem to be the ability to get cash up front and not have to worry about future sales trends.  

Kind of reminds me of selling your house but still having to pay repair bills for problems it may have down the line... ???

« Reply #31 on: September 25, 2010, 21:20 »
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Extremely good points Sadstock ^^.  This doesn't sound like a well reasoned game plan to me at all.  

FWIW, if I were selling my portfolio (which I am not), I would want the money up front.  What point is there to selling a portfolio but then taking on the risk of accepting a % of future sales instead of an up-front payment?!  The most attractive thing about selling would seem to be the ability to get cash up front and not have to worry about future sales trends.  

Kind of reminds me of selling your house but still having to pay repair bills for problems it may have down the line... ???

Yep I agree - there's no point in adding to the risk in the transaction for the seller if the whole point is to take your money and run.

The main reason I don't see IS going for it is that it may change the royalties thy earn from sometime like 25% to 40% on those images. I don't think someone not achieving payout is really that much of an issue.

« Reply #32 on: September 25, 2010, 22:37 »
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I wouldn't sell my portfolio, but here are a couple of other issues for you to think through for transactions you might do - assuming iStock has no issues. It'd be good to know if you were allowed to keep the redeemed credit total of the year to date when the purchase occurred.

1) Would you require the seller to leave istock or could they build a new portfolio?
- He can stay and upload new pictures, no problem...

2) What rules on similars would you want to impose? I don't think I'm the only contributor who uses my own setting or family as models. If I can do a new shot of pumpkins at my front door or Christmas decorations around my fireplace to compete with the ones I sold you, you might not like that. OTOH I can't see agreeing never to use a particular model or set again.
- The rules are: you have send the buyer a cd of all the files, and erase all copies and originals from hard disks..

3) If I were to sell to you and then start up again as an independent, to  the extent that any style I had showed in my work, you're then looking at competition from multiple sites. OTOH this isn't much different from one of Yuri's former workers becoming an iStock exclusive in that their photos look just about identical, so perhaps the issue isn't new.
- Portfolio have to be exclusive to Istockphoto. I cannot have duplicates on others sites, i'm an exlusive contributor.

4) What happens to model releases in such situations? I assume you'd want them all handed over along with the images.
- Model release just follow the pictures.

5) Would the contract allow the seller to keep copies of the files for personal or portfolio use even if they never licensed them again?
- No.

6) Does this apply to photos only? Vectors provide a more complex set of issues as components can be reused in new illustrations in ways that don't apply to photos.
- I'm mostly interested in photos portfolio. Others medias just won't help me much.

I would buy complete portfolios, and pay cash for them. My price is between 2.5 to 3 years of actual revenues. Portfolios must have some sort of compatibility with mine though.

Legally speaking, there's no rules anywhere on Istock that keeps us from doing it.

And yes, i'm thinking of it very seriously... it might eventually be more profitable than uploading new pictures.

RacePhoto

« Reply #33 on: September 25, 2010, 23:31 »
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I suspect you'll struggle to agree a value with anyone. A portfolio seller tends to have an optimistic view on future returns (assumes that income will continue largely at current levels) whereas the buyer tends to take a much more pessimistic view (assumes that the income will fall due to competition, etc).

For instance I would only consider selling my port for 3x annual earnings minimum. However if I were buying I'd be unlikely to pay more than 2x for someone else's port.

Odd you should mention that. I'd wonder if the opposite logic may apply and still have the same conclusions? The seller would assume a pessimistic view, that sales are going to drop, so it's time to sell, while the buyer would assume there's still some income to be made, thus buying? (OK so what, we came up with the same results)

Yes, 2X the past annual sales, or actual sales for the last two years would be a fair value if I was buying. The positive side to a seller is, no work, no obligations, no risk that the commissions will soon bomb and there will be less. Also a one time payment for the rights to the exclusive account, transferring all rights, gives someone a nice little payday for two years work, all in one check!

As a buyer of equipment or anyone starting up a business, I'd want to be making a profit within the first two years, or at least after the first two years. Anything longer and it's too long to amortize the investment. With percentages dropping and sales possibly dropping. (hey look at the survey here, almost 50% claim they are already losing sales at IS because of the change?) I'd find it hard for someone selling to suddenly argue that their portfolio is worth more than two years earnings, when they have just announced that sales and profits are declining.  :o  ;D

Interesting contradiction, isn't it?

« Reply #34 on: September 26, 2010, 01:15 »
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Is there anything to stop a group of independents getting together and forming a company to use for istock?  We could eventually then get the highest exclusive commission, get in to all the higher priced collections and Getty.  The admin might be a bit complicated but it shouldn't be too difficult to have a database and split earnings up.  Seems like a better option than being stuck with less than 20% commission and having bad image placement in the search.

« Reply #35 on: September 26, 2010, 01:44 »
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Is there anything to stop a group of independents getting together and forming a company to use for istock?  We could eventually then get the highest exclusive commission, get in to all the higher priced collections and Getty.  The admin might be a bit complicated but it shouldn't be too difficult to have a database and split earnings up.  Seems like a better option than being stuck with less than 20% commission and having bad image placement in the search.

Its probably possible technically, but basically if it wasn't what iStock wanted there's nothing stopping them from terminating the supply agreement with 30 days notice. I doubt that they'd be keen for this sort of arrangement unless there were something in it for them.

lagereek

« Reply #36 on: September 26, 2010, 03:49 »
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This action went on quite a bit in the old Trad-Photoagency world, with trannies and all that. Somehow with all this digital and billions of shots floating around, it seams an almost impossible task to administrate without comebacks and troubles.

« Reply #37 on: September 26, 2010, 03:50 »
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also the upload limits could be too low to split between multiple members

« Reply #38 on: September 26, 2010, 04:04 »
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A protfolie should be priced according to the renevue it produces.

If your port for instance gives you a 2.000 USD annual renevue, it could be looked at as the yearly interest for the asset (the portfolio).

At a marked interest of for instance 4% the value of the portfolio should be 50.000 $

The above assuming, that the portfolio continues to produce a renevue.

If the renevues goes down - for instance to aging or depleation, the values also goes down.

« Reply #39 on: September 26, 2010, 04:26 »
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A protfolie should be priced according to the renevue it produces.

If your port for instance gives you a 2.000 USD annual renevue, it could be looked at as the yearly interest for the asset (the portfolio).

At a marked interest of for instance 4% the value of the portfolio should be 50.000 $

The above assuming, that the portfolio continues to produce a renevue.

If the renevues goes down - for instance to aging or depleation, the values also goes down.

Yes I agree but the big question is how much it goes down. Answer that and then you can come up with a value

traveler1116

« Reply #40 on: September 26, 2010, 06:23 »
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How about waiting for IS to answer the clarifications first?

The formula will consist of an X% CAP rate, Y years return, and Z% depreciation in income each year.
Changes will need to be made depending on canister level and exclusivity status.
The exact XYZ figures have not yet been determined.
Other more "creative" payment schemes like the one you suggested will also be positively considered.
Everything is open for negations and the exact figures will be settled in person and not in the public forum, rest assure of that.

My original goal was to see if there is any one willing to sell (and by willing to sell I don't mean "looking for a sucker" to buy my port for 10x its worth)
Because of the recent changes in IS I figured there might be some people who don't want to trouble themselves with it and essentially "sell out".

The thing is nobody on here has asked if there are buyers for their portfolios so I assume most everyone is not looking to sell but might be willing to sell if the price is right.  I think if you are serious you should be coming with an offer or at least some idea of what you are willing to offer.

« Reply #41 on: September 26, 2010, 08:39 »
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I've been asked several time, if I would sell my entire folio, but it never went trough, as I set the prises according to my example above.

I was at the last time bid 20$ per image, and thats not enough

« Reply #42 on: September 26, 2010, 12:18 »
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With the proposed change on Istock, we might see more buyers than sellers...

« Reply #43 on: September 27, 2010, 09:27 »
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completely agree..
« Last Edit: September 27, 2010, 12:25 by Reps168 »

helix7

« Reply #44 on: September 27, 2010, 10:22 »
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$90k for mine, with no restrictions on me re-entering the business immediately.

Although that will likely never happen, for reasons discussed here and in previous threads on the subject. Selling a portfolio is tricky because agencies are under no obligation to make it easy for someone to transfer ownership of an image, let alone a portfolio of images. For the seller, it's fairly easy. Just remove every single image included in the sale from every account you have, and you're done. For the buyer, it's not so simple. Assuming that few of the agencies will accommodate a simple transfer of images from one account to another, there's the issue of re-uploading everything, getting everything approved again, etc. It's definitely more work from the buyer's perspective.

That said, if someone is serious about it, I'd be seriously interested in selling as long as there is nothing in the contract that keeps me from creating a new portfolio and staying in the microstock business.

« Reply #45 on: September 27, 2010, 10:41 »
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$90k for mine, with no restrictions on me re-entering the business immediately.

Although that will likely never happen, for reasons discussed here and in previous threads on the subject. Selling a portfolio is tricky because agencies are under no obligation to make it easy for someone to transfer ownership of an image, let alone a portfolio of images. For the seller, it's fairly easy. Just remove every single image included in the sale from every account you have, and you're done. For the buyer, it's not so simple. Assuming that few of the agencies will accommodate a simple transfer of images from one account to another, there's the issue of re-uploading everything, getting everything approved again, etc. It's definitely more work from the buyer's perspective.

That said, if someone is serious about it, I'd be seriously interested in selling as long as there is nothing in the contract that keeps me from creating a new portfolio and staying in the microstock business.

Wow, even I would consider that, and I'm not looking to buy. I think your port is worth more than 90k, please take it as a compliment

« Reply #46 on: September 27, 2010, 11:50 »
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Is there anything to stop a group of independents getting together and forming a company to use for istock?  We could eventually then get the highest exclusive commission, get in to all the higher priced collections and Getty.  The admin might be a bit complicated but it shouldn't be too difficult to have a database and split earnings up.  Seems like a better option than being stuck with less than 20% commission and having bad image placement in the search.

Same thoughts...
« Last Edit: September 28, 2010, 08:47 by Digital66 »

« Reply #47 on: September 27, 2010, 13:02 »
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helix7: The link to your ports don't seem to work for me, nor do u have a link to your IS port.
Nobody in his right mind would buy a port with out written concent that the seller will at least avoid producing similar images to the ones in the sold port.
It would be quite silly to have some one buy your port just to find out after a few months that you have duplicated the port with similar or better pictures.

Digital66: The main problem would be the upload limits imposed by IS. for us the current 60 per week isn't enough. for a group of people this problem gets worse...

« Reply #48 on: September 27, 2010, 14:01 »
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helix7: The link to your ports don't seem to work for me, nor do u have a link to your IS port.
Nobody in his right mind would buy a port with out written concent that the seller will at least avoid producing similar images to the ones in the sold port.
It would be quite silly to have some one buy your port just to find out after a few months that you have duplicated the port with similar or better pictures.

That's part of your risk.  I wouldn't sign away my right to keep on doing what's doin'.

« Reply #49 on: September 27, 2010, 14:23 »
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sjlocke: thats not risk, that would be plain stupidity.
Would you buy a bakery for example if the seller told you in advance he is planning on opening a bakery across the street as soon as the deal is closed ?  not only this, you know this bakery will probebly make better products then the bakrey you just bought!

Didn't think so.


 

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