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Author Topic: Sell PAYG at iStock, earn 14c (or 'up to 28c') per image  (Read 10277 times)

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ShadySue

  • There is a crack in everything
« on: November 02, 2010, 04:47 »
0
This came up in relation to that EL fiasco, but it's worth a new thread.
In that EL fiasco thread1, a contributer got this in a reply from Contributer Support:

"Apparently what happened with our (at least my) really small EL download royalties is that they were purchased from a buyer who bought credits in huge bulk to the tune of 70/credit. I wasn't aware that you were able to get credits that cheap as on the "Buy Stock" page it says credits as low as 95/credit. I was told that this is a standard practice with huge corporate buyers. It's a little frustrating that we have been mislead about this. I also did not realize that subscription credits go as low as 24/credit. Did Kelly make mistake when he wrote "we are adjusting the minimum value of the subscription credit from $0.95 to $0.65"? Did he mean to say "pay-as-you-go credits"? In which case it is already almost that low."
Clearly, that would mean that an XS image bought by one of these Huge Buyers would net a non-exclusive as much as 14c, and even a (Black) Diamond would earn 28p.

Surely that is totally unsustainable for contributers and iStock. No wonder they keep it a 'dirty little secret'.

1 Reference: http://www.istockphoto.com/forum_messages.php?threadid=269152&page=1, about half-way down page 2.
« Last Edit: November 02, 2010, 05:14 by ShadySue »


« Reply #1 on: November 02, 2010, 08:05 »
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At most bigger agencies we have lost the overview of what credits are purchased or worth.

I for myself can only say how great SS is because (despite not getting a raise) I always get a minimum of .38 - no matter how cheap they sell their subscription plans.

The last 3 sales I had at Alamy for an RF image was 1/10th of the listed price. Large resolutions but very little pay - getting close to an Maximum price at DT.

IS, FT, Alamy and DT even try to keep big clients (or win them) by offering super discounts. I had 11 cents XS sales on IS - just imagine how it's going to be in January 2011?

« Reply #2 on: November 02, 2010, 08:25 »
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IS does run "sales", up to 25% off credit prices (or even 30%?), which would shift the cost down to around there anyways.  Frankly, if they want to discount, or offer sales, it should come out of their pocket.  I don't see why we should have to eat their decisions.

« Reply #3 on: November 02, 2010, 08:47 »
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IS does run "sales", up to 25% off credit prices (or even 30%?), which would shift the cost down to around there anyways.  Frankly, if they want to discount, or offer sales, it should come out of their pocket.  I don't see why we should have to eat their decisions.

Well, you know, it doesn't work that way, does it?

« Reply #4 on: November 02, 2010, 08:52 »
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IS does run "sales", up to 25% off credit prices (or even 30%?), which would shift the cost down to around there anyways.  Frankly, if they want to discount, or offer sales, it should come out of their pocket.  I don't see why we should have to eat their decisions.

Well, you know, it doesn't work that way, does it?

The term sweatshop comes to mind with the difference that we do it voluntarily  :-X

« Reply #5 on: November 02, 2010, 08:53 »
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That's my view too. It's for their benefit that it needs to discount the credit packages -- not ours.

It's not that that huge corporation isn't prepared to pay the asking price for credits, it's because he has the leverage to threaten to buy those credits elsewhere. Take away the leverage of competitor agencies and iStock can charge as much as it likes (within reason) for credits but it can also pay us as little as it likes. It's a vicious circle.

I wouldn't be surprised if they started offering free credits to buyers who've bailed before the end of next year. "We missed you. In fact, we missed you so much we want you to give us another try and we've stuck 1,000 free credits in your account to tempt you back." Of course, it costs them absolutely nothing to do this, while it costs us dearly.

iStock: The most sustainable business model known to man (for iStock, that is.)

rubyroo

« Reply #6 on: November 02, 2010, 09:14 »
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Are there any other business that do this?

Microstocking is the only area of my working life where I've been a supplier of goods.  I'm finding it hard to imagine that a supplier of, say, DIY items to a DIY shop would accept receiving lower remuneration whenever the DIY shop decides to discount their items in the shop window.

« Reply #7 on: November 02, 2010, 09:26 »
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I wouldn't be surprised if they started offering free credits to buyers who've bailed before the end of next year. "We missed you. In fact, we missed you so much we want you to give us another try and we've stuck 1,000 free credits in your account to tempt you back." Of course, it costs them absolutely nothing to do this, while it costs us dearly.

Perhaps, they benefit

« Reply #8 on: November 02, 2010, 09:52 »
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Quote
Are there any other business that do this?

Microstocking is the only area of my working life where I've been a supplier of goods.  I'm finding it hard to imagine that a supplier of, say, DIY items to a DIY shop would accept receiving lower remuneration whenever the DIY shop decides to discount their items in the shop window.

As far as I'm aware, in most industries the supplier is paid for his goods when the retailer receives them. There is a recommended retail price and a trade price. The retailer may be able to get a discount on the trade price by buying in sufficient quantities.

If the retailer reduces the recommended retail price (as in rubyroo's DIY example above) it doesn't affect the price he's already paid the supplier, it just means he's likely to be able to sell the goods faster and still make a profit but less overall profit than he could have done in the long term.

There is another less common model called sale-or-return where the supplier isn't paid until the retailer sells the goods and if the goods don't sell, they are returned to the supplier. This is probably a little closer to the microstock model.

I realise this is a very simplistic description and I know I've missed out distribution and middle men and all that but to answer your question: If the retailer chooses to discount his goods it usually comes out of his pocket and not the suppliers.

rubyroo

« Reply #9 on: November 02, 2010, 10:00 »
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That 'sale or return' example sounds fine to me.  If they have my goods taking up space in their storage facility and they don't sell in a given period, I don't mind if they drop the goods.  But, as your example states, it seems much more logical to me for discounts to come out of their (ample) pockets.

« Reply #10 on: November 02, 2010, 10:36 »
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Are there any other business that do this?

Microstocking is the only area of my working life where I've been a supplier of goods.  I'm finding it hard to imagine that a supplier of, say, DIY items to a DIY shop would accept receiving lower remuneration whenever the DIY shop decides to discount their items in the shop window.


Well, not exactly the same thing, but I have read that if a company wants to do business with Walmart, they must offer their product for practically nothing. Most companies lose money dealing with Walmart. So why do they do it? Because it keeps their name in front of buyers and they figure making some money is better than making nothing at all.

http://www.fastcompany.com/magazine/77/walmart.html

Sound familiar?

rubyroo

« Reply #11 on: November 02, 2010, 11:24 »
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That Walmart story is dreadful... I find myself asking why the supplier continues to supply... but then that is the question many of us are asking ourselves in micro.

I wonder if the time will come when the countries supplying their wares and services so cheaply will feel they have enough of a stranglehold on the market to raise their supply prices... that would be an interesting development...

donding

  • Think before you speak
« Reply #12 on: November 02, 2010, 13:12 »
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The point is that in a normal business practice the supplier sells the products to the seller. The supplier decides the price they want to take. The seller doesn't just take the product then tell the supplier later.....well sorry we can't give you the $1.00 you wanted so you'll have to settle on 15 cents. Sorry but the deal's already done so we can't give it back.

ShadySue

  • There is a crack in everything
« Reply #13 on: November 02, 2010, 13:27 »
0
That Walmart story is dreadful...
It is, but it it really news to people? This has been happening in the UK for many years, and has been well aired in the media here, even in a broadcast I showed my classes in high school. (It was about battery farmed poultry. The exact quote was, "The supermarket goes to the supplier and says, 'the selling price will be xpence per pound' and it's up to them to keep their costs within this, no matter what it takes."
It's also well known that many small farmers, orchard keepers etc can't survive by supplying the supermarkets, hence the growth of Farmers Markets.

rubyroo

« Reply #14 on: November 02, 2010, 14:20 »
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Yes, I'm very aware of the stories in the UK (sorry if I sounded in any way like a complete ignoramus), I responded in that way because I hadn't heard that particular story from the US about Walmart.  I was struck by that one because the supplier concerned had specifically been aiming for a premium product.

« Reply #15 on: November 02, 2010, 15:38 »
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A friend used to be a buyer for a supermarket chain in australia (although its international). Same deal, they set the price, the amount of shelf space etc. They work that way for their department store and other shops too (they arent all about passing it on to the customers though :). She said that where possible they would specifically try and find smaller companies that would have to grow to keep up with supplying them, so that after a year or two the supplier couldnt operate without them and they could really screw them hard.

rubyroo

« Reply #16 on: November 02, 2010, 15:45 »
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It's strange how malicious and greedy big businesses can be towards small business.  I wonder how they forget so easily that they were once small businesses themselves. 

I used to work in 'The City' (the 'square mile' in London), and they had a common saying throughout... "Be nice to people on the way up, because you might need them on the way back down".

lisafx

« Reply #17 on: November 02, 2010, 17:10 »
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It's strange how malicious and greedy big businesses can be towards small business.  I wonder how they forget so easily that they were once small businesses themselves. 

I used to work in 'The City' (the 'square mile' in London), and they had a common saying throughout... "Be nice to people on the way up, because you might need them on the way back down".

We have that saying in the US too.  Sad that more people don't practice it.  Seems to have been replaced lately by "Greed is good". 

rubyroo

« Reply #18 on: November 02, 2010, 18:14 »
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@ Lisa  

Oh!   I didn't know that it was common in the U.S.  I only ever heard it in that environment.  It's a great phrase... a constant reminder that a downslide can happen to us all, so arrogance is pointless.  It certainly created an environment of the greatest respect and decency towards everyone, at every level when I worked there.  

"Greed is good" is such a ridiculous phrase... it always makes me think of that huge man in Python's  'The Meaning of Life'... the one who eats so much that he finally explodes after a 'waffer thin mint'.  A bit like  greed destroying the economy (and our personal economies).
« Last Edit: November 02, 2010, 18:16 by rubyroo »

« Reply #19 on: November 02, 2010, 20:14 »
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This isn't a new practice either. Sears used to do that with its suppliers back when my grandfather was in business (at least 60 years ago). They would lure them in with large enough orders that they had to increase, then start lowering the prices they would pay, but the suppliers were stuck because of the recent expansions. Grandpa was smart (and not too greedy) enough to tell them to take a hike.

One wonders what would happen if the suppliers could say - sure we have this product that is the hot new toy for the year, but for you, the price will be X higher because of what you did last year.

« Reply #20 on: November 03, 2010, 08:54 »
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Not that promises mean much to IS but the last time credit prices were discussed we were promised that no matter what credits were sold for, the calculation minimum was 95 cents. So even in the buyer paid 70 cents, independents would still get 20% of 95 cents. This was said to soothe concerns about the minimum per credit package pricing dropping below a dollar, and contributors wondering about sales on credit packages and such.

« Reply #21 on: November 03, 2010, 10:30 »
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Not that promises mean much to IS but the last time credit prices were discussed we were promised that no matter what credits were sold for, the calculation minimum was 95 cents. So even in the buyer paid 70 cents, independents would still get 20% of 95 cents. This was said to soothe concerns about the minimum per credit package pricing dropping below a dollar, and contributors wondering about sales on credit packages and such.

I'm not sure this was ever said, except for the subs credits (disregarding that quoted post from Kelly from 2008).  PAYG can be anything, with the sales discounts, although the lowest they can buy them for in bulk is $.95.

ShadySue

  • There is a crack in everything
« Reply #22 on: November 03, 2010, 10:50 »
0
Not that promises mean much to IS but the last time credit prices were discussed we were promised that no matter what credits were sold for, the calculation minimum was 95 cents. So even in the buyer paid 70 cents, independents would still get 20% of 95 cents. This was said to soothe concerns about the minimum per credit package pricing dropping below a dollar, and contributors wondering about sales on credit packages and such.

I'm not sure this was ever said, except for the subs credits (disregarding that quoted post from Kelly from 2008).  PAYG can be anything, with the sales discounts, although the lowest they can buy them for in bulk is $.95.
In the EL thread in the Help forum (locked) this was said:

"I just got off the phone with istock and I'm even more confused/frustrated now.
Apparently what happened with our (at least my) really small EL download royalties is that they were purchased from a buyer who bought credits in huge bulk to the tune of 70/credit. I wasn't aware that you were able to get credits that cheap as on the "Buy Stock" page it says credits as low as 95/credit. I was told that this is a standard practice with huge corporate buyers. It's a little frustrating that we have been mislead about this. I also did not realize that subscription credits go as low as 24/credit. Did Kelly make mistake when he wrote "we are adjusting the minimum value of the subscription credit from $0.95 to $0.65"? Did he mean to say "pay-as-you-go credits"? In which case it is already almost that low."

« Reply #23 on: November 03, 2010, 14:23 »
0
Sorry, I meant the lowest price they can buy them _automated_ is $.95.  Apparently, they can work out deals.

« Reply #24 on: November 03, 2010, 17:39 »
0
Sorry, I meant the lowest price they can buy them _automated_ is $.95.  Apparently, they can work out deals.

I think a lot of people are seeing the results of a lot of worked out deals.


 

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