Author Topic: What Is Midstock? (Read 19787 times)

Pickerell · « **on:** October 04, 2013, 15:41 »

Getty Images is finally declaring iStock a “Midstock” brand given how high they have pushed the prices of iStock’s exclusive imagery. I estimate that about 35% of the images on iStock are exclusive. Getty has told debt investors that 70% of iStock revenue is generated from exclusive images and that the gross revenue for the last 4 quarters was about $300 million. In Q2 2013 iStock revenue was down 9% compared to the revenue in Q2 2012.

Based on my analysis of the downloads of 192 of iStock’s leading contributors (http://www.selling-stock.com/Article/istockphoto-download-trends) with almost 33 million total download (about 20% of iStock’s total downloads since its founding) I believe that iStock had about 10 million total downloads in 2012. Based on first half results downloads for 2013 should be about the same as last year. Downloads are down from about 25 million in 2009 and 2010.

Demand For High Priced Exclusive Images

It is helpful to get some idea of how many exclusive images are actually being purchased by customers. It is unclear whether the 70% of revenue for exclusive was based on the prices before the “1/2 Our Imagery Is Now 1/2 The Price” promotion, but I will assume it was before.

The price of a credit ranges between $1.40 and $1.67 depending on the size of the package purchased. For the purposes of my calculation I will use an average price of $1.50 for each credit.

Non-Exclusive images range in price from 4 to 18 credits or $6 to $27
Exclusive images range in price from 5 to 28 credits or $7.50 to $42
Exclusive+ imges range in price from 10 to 55 credits or $15 to $82.50
Vetta images range in price from 35 to 160 credits or $52.50 to $240.00

It is interesting to note that Midstock images are often higher priced than Premium images purchased on Gettyimages.com. And on gettyimages.com the customer is not limited to 500,000 impressions before paying an additional “Extended License” fee.

Recently, I was able to analyze the sales figures of several of the major RF contributors to Gettyimages.com. In 2007 when Getty was a public company the average price of an RF license was about $240. In the sales of the collections I reviewed the average price per-image-licensed in 2008 was $219. In 2012 the average price pre-license had dropped to $126. (Images had been added to the collections during the period.) This wouldn’t have been so bad if there were more sales, but in fact only about one-third as many images were licensed in 2012 as in 2008. In addition, 25% of the licenses were for prices under $25. Is the Midstock model sustainable when Getty’s Premium images are being licensed at these prices?

The large file sizes on each of these iStock brands are priced as follows:
Non-exclusive - $15.00
Exclusive $25.50
Exclusive+ $60.00
Vetta $112.50

If 70% of iStock revenue is from images that are “Only from iStock” that means that about $90 million is from the licensing of Non-exclusive images and about $210 million from the three higher priced categories combined.

Assuming 10,000,000 downloads, if we divide $90 million by a $15 average price per image we get 6 million downloads of non-exclusive images. If we assume a $60 average price for the various exclusive collections we get 3.5 million downloads of exclusive images. The $60 price may be a little high because relatively few customers may be purchasing Vetta images at their higher prices, or on the whole customers may be purchasing smaller file sizes. We also have to take into account that a portion of that $210 million in revenue comes from the purchase of Extended Licenses. That, or a higher average price in general, could mean that there are fewer exclusive downloads.

Non-exclusive Revenue

If iStock licenses the same number of non-exclusive images in the second half of 2013 as they did in the first half their revenue from non-exclusive images will be cut to $45 million since non-exclusive images are being licensed at half price. It is hard to believe they will license as many non-exclusive images since those images now appear so much lower in the search return order.

That would mean that in order for Getty’s Midstock revenue to grow they will have to license a lot more of their higher priced images. But, are there really more customers that are willing to pay that much?

If you disagree with my numbers, or my analysis, please let me know.

Sean Locke Photography · « **Reply #1 on:** October 04, 2013, 15:49 »

"Getty Images is finally declaring iStock a “Midstock” brand given how high they have pushed the prices of iStock’s exclusive imagery."

Are you saying they've slapped a label on it somewhere?

tickstock · « **Reply #2 on:** October 04, 2013, 15:57 »

Pickerell · « **Reply #3 on:** October 04, 2013, 16:03 »

Getty has $2.6 billion in debt and that debt is traded. Getty is telling Debt Investors that iStock is "Midstock" and they are trying to make an argument that it is aimed at a different customer from those who buy Premium stock (Getty's name for what they call the higher quality stock that can be found on Gettyimages.com -- their characterization, not mine).

Sean Locke Photography · « **Reply #4 on:** October 04, 2013, 16:11 »

Quote from: tickstock on October 04, 2013, 15:57

Quote from: Sean Locke Photography on October 04, 2013, 15:49
"Getty Images is finally declaring iStock a “Midstock” brand given how high they have pushed the prices of iStock’s exclusive imagery."

Are you saying they've slapped a label on it somewhere?

"One third of Getty’s revenue comes from its midstock business"
http://www.businessweek.com/news/2013-09-04/caryle-group-s-getty-images-ratings-on-review-for-cut-by-moody-s

Well that's a newspaper saying it. Of course it doesn't matter what you call it. It is what it is.

ShadySue · « **Reply #5 on:** October 04, 2013, 16:12 »

Wonder if this confirms that they are intending to split off the Main collection, which is hardly priced at midstock.
(But then if they do, what about their 'half-price forever' promise now: "Half our collection is now half the price, and we plan to keep it that way"?)

bunhill · « **Reply #6 on:** October 04, 2013, 16:30 »

1.

Quote from: Pickerell on October 04, 2013, 15:41

In Q2 2013 iStock revenue was down 9% compared to the revenue in Q2 2012.

The Bloomberg report said that mid stock revenue was down 9% - is anyone else saying that specifically means that iStock is down 9%.

2.

Quote from: Pickerell on October 04, 2013, 15:41

Based on my analysis of the downloads of 192 of iStock’s leading contributors with almost 33 million total download (about 20% of iStock’s total downloads since its founding)

I am very dubious of this metric as a starting point because I believe that imported exclusive content (much of it very high quality) now likely accounts for a very significant proportion of sales. I do not believe that the time-served leading contributors and iStock members are taking nearly such a big share of the total. That is not to say that they are not still doing very well - only that much of the work in the imported collections is probably doing very well also.

I do not believe that you can extrapolate from 192 accounts.

3. I am not convinced that it is possible to draw a useful picture from a calculation put together from so many guesstimates, ifs and maybes - the uncertainty compounded and the possible accuracy diminished at every if ?

wds · « **Reply #7 on:** October 04, 2013, 16:32 »

Are you taking into account iStock's collection promotions (e.g. E to E+ or Vetta) of images? In other words, they may have raised the price of many images that were say in the "E" collection to the "E+" collection...images that they saw selling.

tickstock · « **Reply #8 on:** October 04, 2013, 16:32 »

gostwyck · « **Reply #9 on:** October 04, 2013, 16:34 »

Excellent analysis Jim.

As an non-exclusive contributor I can tell you that, since the price decrease, my downloads have actually increased by about 30% whilst my average royalty has been slashed from about $2 down to 70-80c. I'm on the 18% royalty rate.

The net result is that my earnings at IS are down about 45% (and so is Istock's cut of my sales) when compared to the same month the previous year.

If my figures are anything to go by I think Q3 for Istock, when it finally gets reported, is going to be a lot worse than Q1 & Q2.

gostwyck · « **Reply #10 on:** October 04, 2013, 16:35 »

Quote from: Sean Locke Photography on October 04, 2013, 15:49

"Getty Images is finally declaring iStock a “Midstock” brand given how high they have pushed the prices of iStock’s exclusive imagery."

Are you saying they've slapped a label on it somewhere?

Well, there is the new logo ...

gostwyck · « **Reply #11 on:** October 04, 2013, 16:45 »

Quote from: bhr on October 04, 2013, 16:30

2.
Quote from: Pickerell on October 04, 2013, 15:41
Based on my analysis of the downloads of 192 of iStock’s leading contributors with almost 33 million total download (about 20% of iStock’s total downloads since its founding)

I am very dubious of this metric as a starting point because I believe that imported exclusive content (much of it very high quality) now likely accounts for a very significant proportion of sales. I do not believe that the time-served leading contributors and iStock members are taking nearly such a big share of the total. That is not to say that they are not still doing very well - only that much of the work in the imported collections is probably doing very well also.

I do not believe that you can extrapolate from 192 accounts.

3. I am not convinced that it is possible to draw a useful picture from a calculation put together from so many guesstimates, ifs and maybes - the uncertainty compounded and the possible accuracy diminished at every if ?

Don't forget Jim is talking about downloads not revenue on those 192 accounts. Also, we all sold far more images in the past than we do today so the totals are somewhat skewed by sales from years ago. Personally I think it is extremely feasible that the top 200 contributors were responsible for 20% of total sales ... I'm almost surprised that it's not higher.

bunhill · « **Reply #12 on:** October 04, 2013, 17:08 »

Quote from: gostwyck on October 04, 2013, 16:45

Personally I think it is extremely feasible that the top 200 contributors were responsible for 20% of total sales ... I'm almost surprised that it's not higher.

How can you tell who the top 200 contributors are today when so much of the best quality content is from collections which were not represented even 18 months ago ?

Either way, it's feasible. But it's a guess. As is more or less everything else here. There is no data. Building a calculation out of guesses is pointless because anything multiplied by guess = an unknown. And the unknown gets bigger at every iteration.

Also - there is nothing here about strategy.

gostwyck · « **Reply #13 on:** October 04, 2013, 17:28 »

Quote from: bhr on October 04, 2013, 17:08

Quote from: gostwyck on October 04, 2013, 16:45
Personally I think it is extremely feasible that the top 200 contributors were responsible for 20% of total sales ... I'm almost surprised that it's not higher.

How can you tell who the top 200 contributors are today when so much of the best quality content is from collections which were not represented even 18 months ago ?

Either way, it's feasible. But it's a guess. As is more or less everything else here. There is no data. Building a calculation out of guesses is pointless because anything multiplied by guess = an unknown. And the unknown gets bigger at every iteration.

Also - there is nothing here about strategy.

Those new collections might be significant in terms of revenue today but certainly not in terms of sales compared to the past. I think in their peak years Lise was selling north of 20K per MONTH and Yuri up to 30K.

Pickerell · « **Reply #14 on:** October 04, 2013, 21:15 »

wds
I lumping all the Exclusive images into one group. I’m not trying to make judgment about the percentage of sales that are just Exclusive, the percentage that are E+ and the percentage that are Vetta.

Gostwyck
Thanks for the insight on your numbers.

I didn’t say that my list is the 192 top contributors, I said the list is “192 of the top contributors.” There is a difference. I know I am missing some of the top contributors. Back when we had istockcharts.de I started tracking the top 200 people and later expended it to the top 500. Some of the original top 200 have slipped down in the list and a number of the lower ones have had a lot more downloads and have moved up. I have also been able to add a few people that I have discovered from other sources as the years go by. Regardless this group of contributors has a combined total of almost 33 million downloads and I can’t imagine that iStock has had more than 150 million total downloads given the numbers istockcharts was reporting when they finally stopped supplying information. Thus, I think the contributors I’m tracking representing 20% of total downloads.

Bhr
I think we all have to make judgments about what to shoot, how much to invest in new production and the likely direction the business will take in the future since every stock producer is betting that there will be increasing demand for the images he shoots one, two or three years down the road. I wish we had more and better data, but I think it is worth basing our judgments on what little data we can find, rather than just hoping that everything will work out alright.

MichaelJayFoto · « **Reply #15 on:** October 05, 2013, 01:45 »

Quote from: Pickerell on October 04, 2013, 15:41

Getty Images is finally declaring iStock a “Midstock” brand given how high they have pushed the prices of iStock’s exclusive imagery. I estimate that about 35% of the images on iStock are exclusive.

If you perform a broad search like "people OR landscape OR object" (add a few more), you can get the search to show many millions of images. When you then click the "only from iStock" checkbox, search will limit to exclusive images. I just made such a search for 6.37 million files of which 3.11 million were exclusive. So the percentage of exclusive files is closer to 50% rather than 35%.

Quote from: Pickerell on October 04, 2013, 15:41

The price of a credit ranges between $1.40 and $1.67 depending on the size of the package purchased. For the purposes of my calculation I will use an average price of $1.50 for each credit.

This only takes into account the prices for "standard" accounts. Prices for Corporate Accounts (http://www.istockphoto.com/corporate-accounts-corporate-credits.php) can get far lower. And you will know that for averaging credit prices it only takes one large corporate account buying 30,000 credits to reduce the average price for hundreds of small buyers dramatically.

Add to that there are always discount codes for 10, 15, 20 per cent floating around plus additional discounts for the largest clients on top of the large corporate packages, and the average price per credits is likely to be quite a bit lower than your estimate.

goober · « **Reply #16 on:** October 05, 2013, 04:06 »

A few weeks ago I got 18 cents for one download and yesterday I got 51 cents for another. Tell Getty's debt holders that Istock is bottomfeederstock.

I'm expecting that the person that paid 18 cents will ask for a refund.

cobalt · « **Reply #17 on:** October 05, 2013, 04:37 »

Jim,

that is a very interesting analysis thank you. If anything I would believe that the volume of sales of non exclusive content is on the rise, at least 30% more, like gostwyck suggests. These sales might increase in the coming months as more and more customers realise that independent content has been dropped so drastically in price.

They are probably hoping to attract more buyers and might make up part of the loss by pushing more of their wholly owned content on which they pay no royalties.

Other than that I don´t know how they will make up for the loss in revenue unless they really believe that lowering the prices on indie content is enough to draw back buyers from SS and Fotolia. However, price was only one part of the attraction of those sites.

You still have the problem of exclusive content series being spread over 3 different price points (vetta,s+ and main for images from the series) which is very confusing for the customers and the strange choices for "automated" editors pick which puts even objects on white in higher price collections.

Unless the customers can really see a difference in quality between the different price points, I guess many will prefer to look at the cheap content first.

Anyway, at least something is finally being done with istock. I hope the new logo comes with more money for marketing so my friends who are still exclusive will finally see some growth. They deserve it, they work really hard.

As an indie the price cut was a dissapointement, but already fotolia and SS combined have overtaken istock for me (with only 530 files online), so I understand that for indies istock now plays a minor role in their attention.

I am still a long way from recovering my old income, but at least now when I upload my files I get views and sales, so at least I see a connection between work and income again.

BaldricksTrousers · « **Reply #18 on:** October 05, 2013, 05:27 »

Quote from: Pickerell on October 04, 2013, 21:15

since every stock producer is betting that there will be increasing demand for the images he shoots one, two or three years down the road.

Surely that isn't the case? Over and over again we hear of declining sales as images age. Lifestyle work is particularly vulnerable to changing fashions, but other subjects are prone to being buried under the weight of new, similar material, not to mention the iStock phenomenon of "lost and gone forever" for new material entering the search, never to be viewed at all. Twelve of my last 20 images it iStock (uploaded between three and four months ago) have not been viewed even once. I guess you'd need a deep-water drilling rig to reach them in the search now. The other eight have produced three sales from 19 views. That is a pretty good hit-rate and I like to think it means that if people looking for the type of work I do get to see it then I have a reasonable chance of making a sale, but search burial destroys that chance and it's hard to see it as being a reversible effect.

I'm seeing much the same pattern as Gostwyck.

gostwyck · « **Reply #19 on:** October 05, 2013, 05:36 »

Quote from: cobalt on October 05, 2013, 04:37

Jim,

that is a very interesting analysis thank you. If anything I would believe that the volume of sales of non exclusive content is on the rise, at least 30% more, like gostwyck suggests. These sales might increase in the coming months as more and more customers realise that independent content has been dropped so drastically in price.

They are probably hoping to attract more buyers and might make up part of the loss by pushing more of their wholly owned content on which they pay no royalties.

Other than that I don´t know how they will make up for the loss in revenue unless they really believe that lowering the prices on indie content is enough to draw back buyers from SS and Fotolia. However, price was only one part of the attraction of those sites.

You still have the problem of exclusive content series being spread over 3 different price points (vetta,s+ and main for images from the series) which is very confusing for the customers and the strange choices for "automated" editors pick which puts even objects on white in higher price collections.

Unless the customers can really see a difference in quality between the different price points, I guess many will prefer to look at the cheap content first.

Anyway, at least something is finally being done with istock. I hope the new logo comes with more money for marketing so my friends who are still exclusive will finally see some growth. They deserve it, they work really hard.

As an indie the price cut was a dissapointement, but already fotolia and SS combined have overtaken istock for me (with only 530 files online), so I understand that for indies istock now plays a minor role in their attention.

I am still a long way from recovering my old income, but at least now when I upload my files I get views and sales, so at least I see a connection between work and income again.

Great points Jasmine. In my view the greatest obstacles that Istock faces, in competition with SS in particular, is the speed of the site, the accuracy of the search results and the simplicity of the pricing architecture.

'All images same price' is always going to beat 'half price images forever' especially when confronted by 'multiple collections' no matter how simple or effective the 'price slider' becomes.

I'd have very happily invested in SS stock (before the price went ballistic) but I wouldn't dream of buying IS stock were it available.

bunhill · « **Reply #20 on:** October 05, 2013, 08:56 »

Quote from: Sean Locke Photography on October 04, 2013, 15:49

"Getty Images is finally declaring iStock a “Midstock” brand given how high they have pushed the prices of iStock’s exclusive imagery."

Are you saying they've slapped a label on it somewhere?

Quote from: Pickerell on October 04, 2013, 16:03

Getty has $2.6 billion in debt and that debt is traded. Getty is telling Debt Investors that iStock is "Midstock" and they are trying to make an argument that it is aimed at a different customer from those who buy Premium stock (Getty's name for what they call the higher quality stock that can be found on Gettyimages.com -- their characterization, not mine).

What you are saying here (along with the rest of this item) seems to be based entirely on the summary of Moody's Sept 03 report and the reporting of that summary eg - Bloomberg / Businessweek item.

I would like to specifically ask whether you have another source for your statement that "Getty is telling Debt Investors that iStock is "Midstock" ". And I would like to ask from what you are concluding that iStock is down 9%. Let me explain my question:

The Moodys summary does not say that iStock is midstock. iStock is not mentioned.

The Bloomberg Businessweek item pads out the summary with various related factoids including, for example, that Getty's midstock business has been challenged by Shutterstock etc - but it does not define the midstock business as being specifically iStock. That could equally mean that midstock (as a price point) has been challenged by microstock. As we know. Word association maybe makes us think they mean iStock specifically.

And - even if iStock is "midstock" - from what are you concluding that iStock is all of their midstock and therefore that iStock is down 9%. The Bloomberg piece talks about midstock being down 9%.

Unless there is specific evidence to the contary I would take Getty midstock to mean mid priced RF in general across all sites. I would take premium to largely mean RM.

So - what makes you say that iStock is down 9% ?

PeterChigmaroff · « **Reply #21 on:** October 05, 2013, 11:29 »

Jim, I think the first time I saw the word "Midstock" was a few years ago when SuperStock was trying to pull together a collection of images to target a price point between the then, well delineated prices of microstock and traditional RF. Stock photography is probably better studied using the laws of diffusion than any business technique. For some time all the "factions", and they are that, existed with some separation. Not anymore. It has become increasingly difficult to justify higher prices of one collection while the lower tier appears to have many images that are at least as good and for much less money.

Ed · « **Reply #22 on:** October 05, 2013, 19:27 »

Jim, in short, midstock is just an outdated term. More and more, there is no "microstock" or "midstock" or "traditional agencies". There are only price points that relate to license rights.

The challenge isn't in trying to define semantics...it's about educating buyers about rights associated with a certain price point. What's going on at iStock isn't about the customer...it's about attracting more contributors to become exclusive at their agency.

The thing I do find fascinating about your research is your discovery that iStock had 10 Million Total Downloads in 2012. Are you sure this is just iStock and not Getty in total? James, at Alamy, in comparison stated that they had about 365,000 downloads at the same time with about 30 million images. That's a very big difference.

BaldricksTrousers · « **Reply #23 on:** October 06, 2013, 00:38 »

"Midstock" is the term used for a stock pricing policy that causes agencies to fail.

Pickerell · « **Reply #24 on:** October 06, 2013, 14:13 »

Thanks everyone for your comments. Here’s some more thoughts.

I agree that Midstock is a pricing policy that is an attempts to define a price point between Premium pricing and Microstock and tha I would say that in general there are 4 different price points – Premium, Midstock, Microstock and Subscription. It seems clear to me that the higher you price the product the fewer sales you make.

The rights buyers get with Subscription, Microstock and Midstock are pretty much the same. The only difference is price.

It seems to me that with its Midstock offering Getty is saying, “We’re going after customers that have more money to spend and we’re willing to give up sales to those buyers who can only afford Microstock prices.” The question is whether the higher prices will make up for the reduced volume. It is very difficult to position a brand so it will be attractive to off-the-rack shoppers and also attract buyers who want exclusive, unique and are also willing to pay premium prices for such a product.

How I get to the 10 million downloads is very simple. I have identified a group of contributors who are responsible for over 20% of iStock’s total downloads and they had about 2 million downloads last year. If somehow the people who have the other 80% of downloads historically are making a disproportionally higher share of downloads today then my 10 million estimate is off. In the last year-and-a-half I’ve expanded the list of people I track to over 400. The total downloads for all 400 are about one-third of iStock’s historical total and the downloads for this group in the last 12 months seem to be around 3.3 million.

In coming up with my average price per credit I didn’t take into account that some buyers could be paying a lot less for their credits as a result of corporate account buying and discount codes. If we assume the average price per credit is $1.20 instead of $1.50 that would mean that there would have been about 7.5 million non-exclusive downloads and 4.375. Exclusive downloads for a total of 11.875 million based on the gross revenue reported. My estimates could certainly be off by that much.

The interesting thing is that any iStock contributor receiving a reasonable number of downloads could easily calculate what their average royalty per download has been over a period of 6 months or so, factor in their royalty percentage and come up with an average price paid for the use of their images. I haven’t seen that kind of reporting and I would think such a number would be useful for the people participating in this group.

If the volume of non-exclusive content is on the rise that would be a good thing and mean that Getty is pulling customers back from SS and FT. However, given that a customer has to use the slider to find the non-exclusive content I would think it would be more likely that it is in decline. If people with a fair number of images can tell us that their unit sales went up in the last quarter compared to earlier in the year that would help us understand what is happening.

My guess is that most customers want to use the default search and that should mean that Exclusive sales are on the rise as a percentage of total units licensed.

Gostwyck’s analysis that the percentage of exclusive files is closer to 50% than 35% makes sense.

I get a lot of calls from investors wanting help in understanding the stock photo industry. It is clear to them that when Getty talks about Midstock they are talking about the iStock brand and not Premium RF. If Getty was including the RF they sell on Gettyimages.com in Midstock then the total sales of Midstock would certainly be much more than $300 million. The investors are also told that Premium sales also generate about $300 million and there is no way RM alone is doing that well. It is unclear where Getty puts Thinkstock. It shouldn’t be part of either Premium or Midstock, but it must be rolled into one of these categories. I can’t imagine Thinkstock generated much more than $10 to $20 million annually which doesn’t make it a big issue in either case.

bunhill · « **Reply #25 on:** October 06, 2013, 14:33 »

Quote from: Pickerell on October 06, 2013, 14:13

I get a lot of calls from investors wanting help in understanding the stock photo industry. It is clear to them that when Getty talks about Midstock they are talking about the iStock brand and not Premium RF.

What would they be basing that on. At best it's an assumption, right ? I take it that those actually invested in Getty are not talking to you about it.

I don't see that the 9% = iStock leap of logic in your article has been explained. It might be true but is has not been shown. And clearly, iStock is both midstock and microstock.

BaldricksTrousers · « **Reply #26 on:** October 06, 2013, 15:06 »

You're wildly underestimating TS/PP, Jim. It's now on a par with IS for non-exclusives and they have a huge mountain of wholly owned stuff in there as well.

gostwyck · « **Reply #27 on:** October 06, 2013, 16:24 »

Quote from: BaldricksTrousers on October 06, 2013, 15:06

You're wildly underestimating TS/PP, Jim. It's now on a par with IS for non-exclusives and they have a huge mountain of wholly owned stuff in there as well.

I'd agree. My income from TS/PP is about 12-15% of what I earn from SS (and I have a somewhat smaller port on TS due to IS's hopeless 'connector').

Taking into account that TS/PP also pay smaller royalties than SS I think that TS/PP revenue could be as much as 20-25% that of SS. That would put them in the region of $40-50M annual sales.

gostwyck · « **Reply #28 on:** October 06, 2013, 16:29 »

Quote from: BaldricksTrousers on October 06, 2013, 00:38

"Midstock" is the term used for a stock pricing policy that causes agencies to fail.

Whahaaay!

dbvirago · « **Reply #29 on:** October 06, 2013, 19:50 »

As long as I continue to get sales for under a quarter, they can call it any thing they like, they are microstock

StanRohrer · « **Reply #30 on:** October 06, 2013, 20:34 »

Quote from: Pickerell on October 06, 2013, 14:13

The interesting thing is that any iStock contributor receiving a reasonable number of downloads could easily calculate what their average royalty per download has been over a period of 6 months or so, factor in their royalty percentage and come up with an average price paid for the use of their images. I haven’t seen that kind of reporting and I would think such a number would be useful for the people participating in this group.

I've got to think this number is very portfolio dependent and these numbers may or may not be representative.

Based on 941 iStock downloads in 9 months of 2013, I think the buyers have paid, $22.52 per sale. The contributors cut is his percentage times $22.52. This does not include partner and GI programs.

With Partner and GI included for 8 months of 2013 and an exclusive contributor, I think buyers paid $18.10 per purchase (based on 1221 sales). The contributors cut is his percentage times $18.10 - albeit, the outside programs have there own different percentages than does iStock proper. This paragraph is a whole lot more complicated, than this broad brush, due to the different payment plans and the amount of allowable images in the various outside plans.

Pickerell · « **Reply #31 on:** October 07, 2013, 14:52 »

Thanks Gostwick for your Thinkstock percentages compared to Shutterstock. Obviously, Thinkstock customers have not liked the collections I have been tracking anywhere near as well as Shutterstock customers like them. Your experience may be more representative.

The next question for me is where does that $40 to $50 million for Thinkstock fall in the overall revenue reporting. Investment analysts are being told there are 4 categories of revenue – Premium Stock, Midstock, Editorial and Footage. The numbers they are being given are $300 million for PS, $300 million for Midstock, $225 million for Editorial and $75 million for Footage. Total $897 million in the last 4 quarters.

Even with a 9% drop in the last year, I have trouble believing is much below $300 million. I can’t imagine they are throwing $40 or $50 million of Thinkstock sales into that box. Does anyone think that could be true?

I could believe that RM and traditional RF sold through Gettyimages.com could only be doing about $250 million and $50 million of Thinkstock revenue is lumped in there. It doesn’t make much sense to lump subscription offerings with what are supposed to be Premium priced products, but maybe they are doing that to make the investors think Premium pricing still has a future. What do you think? Any ideas?

StanRohrer’s numbers are interesting. I agree with his point that the average price per image may be very portfolio dependent. His numbers would indicate that customers are either usually buying the small file size of his images, or there are some other huge discounts being factored in. It would be interesting to know if other with different portfolios are having the same experience.

On another point, according to Rebecca Swift, head of creative planning for iStock there are more than 30 million images on iStock. Does, anyone believe that number? Where did all those images come from? Given how tight the editing has always been I don’t think they were anywhere near that number a year ago. Anyone have any thoughts?

tickstock · « **Reply #32 on:** October 07, 2013, 15:00 »

gostwyck · « **Reply #33 on:** October 07, 2013, 15:26 »

Jim,

My view is that the term 'Midstock', in the context that Getty are using it, includes Istock, Thinkstock and Photos.com. Jupiter Images is probably allocated to Premium stock.

My guessitmate at the time was that Istock probably peaked at something like $300M-$350M in 2010. It was the introduction of the RC system in Sept 2010, together with countless price increases (when they were being 'harvested' by H&F), that finally broke the dam. It's all been downhill ever since IMHO ... and rapidly too. They're now on their 3rd boss in little more than 2 years.

Before the price reduction in June the buyers of my images at Istock were paying just under $10 per download. Now that figure is down to about $4.20.

MichaelJayFoto · « **Reply #34 on:** October 08, 2013, 01:43 »

Quote from: gostwyck on October 07, 2013, 15:26

Before the price reduction in June the buyers of my images at Istock were paying just under $10 per download. Now that figure is down to about $4.20.

I'm getting to $9.88 before the price drop and $4.22 after, so I can confirm your numbers from the meager number of downloads I am having.

BaldricksTrousers · « **Reply #35 on:** October 08, 2013, 14:03 »

Quote from: MichaelJayFoto on October 08, 2013, 01:43

Quote from: gostwyck on October 07, 2013, 15:26
Before the price reduction in June the buyers of my images at Istock were paying just under $10 per download. Now that figure is down to about $4.20.

I'm getting to $9.88 before the price drop and $4.22 after, so I can confirm your numbers from the meager number of downloads I am having.

I'm the same: from $9.76 in May to $4.25 in September.

I think perhaps the relevant question is not "what is midstock" but "what isn't midstock?". It can't claim to be the cheapest, that's microstock; it can't claim to be elite, that's Premium. So what can it claim? The answer, apparently, is nothing, because what Getty is doing is to try to piggyback its midstock exclusive brand off its microstock inde brand. That's what the "half-price forever" campaign is about. They're trying to promote iStock as a cheap option, then push customers into expensive areas. The only reason I can see for doing that is that their research has persuaded them that "midstock" is not a price point that can pull in new customers on its own merits.

The old sales pitch was that exclusive files were superior files, a claim that was propagated very effectively by the community. There was a time when suggesting parity between iStock exclusive files and those elsewhere was a sure way to get your head bitten off in the forums. When Getty killed the community spirit (as seen from the length of the ever-shrinking Woo-yay threads) it also killed the propaganda that said there was something magical about its collection.

Pickerell · « **Reply #36 on:** October 09, 2013, 19:18 »

OK here is more speculation.
It is interesting that the average gross sale price for a Non-exclusive image seems to have been around $9.88 for the first half of the year and around $4.22 after the price drop. I’m going to use those numbers for some calculations.

We have been told that total Midstock revenue was about $300 million in the last 4 quarters ending June 30, 2013 and that the bulk of Midstock, if not all of it, comes from iStockphoto. Getty has also told investors that 70% of the Midstock revenue is generated by exclusive images.

That means there was $210 million in revenue from Exclusive images and $90 million from other images.

If we assume all the $90 million was generated by iStock non-exclusive images and divide $9.88 into $90 million we get about 9,109,312 total downloads.
If we assume an average price of a credit at $1.50 and an average price of $60 per download there would have been 3.5 million Exclusive downloads.

But some have argued that $1.50 is too high, so assume an average price or $1.20 per credit and that would drop the cost per download to $48 and result in 4.375 total download.

Add the Exclusive and Non-Exclusive downloads together and we get 13,484,213 total downloads for the year. I have estimated that the total downloads for the period was right around 10 million. I might be underestimating that much, but I don’t think so.

Gostwyck thinks that Thinkstock revenue could be included in this Midstock category and that it could be as high as $40 to $50 million. I have trouble seeing how they could argue that Thinkstock is Midstock, but I guess they can give it any name they want. I accept that Thinkstock revenue is much higher than my earlier estimate ($10 million).

Assume that Thinkstock is $45 million and it makes up half of $90 million in “other” revenue. That leaves the other $45 million for iStock Non-exclusive. In that event at $9.88 gross revenue per download that would be 4,554,656 Non-exclusive downloads. Add that to the Exclusive downloads and we get a total of 8,929,656 total downloads for the year. I think that is fewer than the actual number of downloads.

But, if we assume that Thinkstock is included and total revenue generated was about $30 million instead of $45 million (remember this was from July1, 2012 through June 30, 2013) that would leave $60 million in Non-exclusive iStock sales. Divide by $9.88 and you get 6,072,847 downloads. Add that to the 4,554,656 Exclusive sales and you get 10,627,530 total downloads. What do you think? All these numbers could be off, but maybe they supply some perspective.

The other interesting thing is how the price drop might affect the revenue numbers. If the average price dropped from $9.88 to around $4.22 and the downloads remained the same the revenue generated by Non-exclusive sales would have been:

9,109,312 total downloads at $4.22 each would generate $38,441,297, not $90 million
6,072,847 total downloads at $4.22 each would generate $25.617,424, not $60 million
4,554,656 total downloads at $4.22 each would generate $19,220,648, not $45 million

Getty will have to sell a significant number of additional Exclusive images or see a significant increase in Thinkstock subscriptions to make up for the revenue lost from lowering the price of the Non-exclusive images unless the Non-exclusives are seeing their downloads increase from 30% to 50% as a result of the discount price offer.

I predict that Getty saw another decline in Midstock revenue in Q3 2013.

MichaelJayFoto · « **Reply #37 on:** October 10, 2013, 01:34 »

Quote from: Pickerell on October 09, 2013, 19:18

If we assume an average price of a credit at $1.50 and an average price of $60 per download there would have been 3.5 million Exclusive downloads.

But some have argued that $1.50 is too high, so assume an average price or $1.20 per credit and that would drop the cost per download to $48 and result in 4.375 total download.

How did you get to the average price per download for exclusive downloads? If we are talking about iStock as midstock, this sounds far too high. This might be the average price for the Vetta downloads but not overall as Signature and Signature+ are priced well below that and probably have far more downloads than Vetta images.

I have a low-end portfolio (had almost no Vetta images) and in 2012 as an iStock exclusive I have made roughly $5,000 in royalties from about 1,100 downloads at a 30% royalty rate. So my average royalty per download was around $4.50 which indicates that the customer paid about $15 per download for my images. You might find other contributors showing a higher average number if they had a large percentage of their portfolio in Vetta / Agency but I doubt it would be far beyond $20-25.

BaldricksTrousers · « **Reply #38 on:** October 10, 2013, 03:22 »

I don't think it needs any complex maths to see that halving the price of independent files is going to have a serious effect on the income. Even if we only account for 20% of their sales, it still means losing 10% of the revenue, which is a huge hit for any company.
The only way to make sense of it is to assume that they thought it would pull in more than enough additional customers to plug the earnings gap. It is true that my sales have risen about 25% on the price drop - but is that due to new customers flooding in, or is it just raking some existing sales off exclusives?
You only have to look at the August and September iStock earnings threads to see that very few exclusives are feeling the love that should have come with an influx of new buyers - in fact it looks more like a straight transfer of sales from them to us not only with no new buyers but very probably with a loss of buyers (maybe abandoning quality control wasn't a brilliant idea).
It would not surprise me if it turned out to be a very, very bad quarter indeed for Getty's midstock. Happily, I'm not an investor living on promises of jam tomorrow.

Pickerell · « **Reply #39 on:** October 10, 2013, 08:55 »

In my beginning post on this thread I explained how I came up with an average price per credit of $1.50. It was later pointed out to me that $1.50 may be too high based on volume discounts to big users and promotion deals so I lower the credit price to $1.20, but I still based the average sale on the Large (default) file size and that’s how I came up with $48. I’m getting the sense now that a much higher percentage of the images used are small to medium than I expected. Thus, $25 to $30 maybe makes more sense. I know of Vetta and Exclusive+ contributors who were getting royalties significantly above $10 last time I checked.

The problem with the $25 number is that means there would have taken 8,400,000 downloads to generate $210 million and that puts total downloads counting non-exclusive at 13 to 14.5 million which is much higher than the analysis of 192 of the leading iStock contributors would indicate. (See: http://www.selling-stock.com/Article/istockphoto-download-trends). I still think my download analysis or around 10 million is fairly accurate. I would like to see more exclusive contributors weigh in to this discussion and let us know what their average sale is.

MichaelJayFoto · « **Reply #40 on:** October 10, 2013, 09:09 »

Quote from: Pickerell on October 10, 2013, 08:55

I still based the average sale on the Large (default) file size and that’s how I came up with $48.

I don't have a summarized statistic on this but I quickly went through my monthly numbers from 2012 and before: Only about 3% of my downloads were bigger than Large, the other 97% were more or less evenly distributed across XS, S, M and L. This would indicate that the average download is probably a bit smaller than M.

This has not changed much over the course of the past years. It only changed with the price drop for non-exclusive files: I am now seeing a higher number (10-15%) in XL and larger. Probably lots of customers are choosing a bigger than needed size because the price difference is insignificant for non-exclusive images.

tickstock · « **Reply #41 on:** October 10, 2013, 09:20 »

Gannet77 · « **Reply #42 on:** October 10, 2013, 10:21 »

Quote from: tickstock on October 10, 2013, 09:20

Quote from: Pickerell on October 10, 2013, 08:55
The problem with the $25 number is that means there would have taken 8,400,000 downloads to generate $210 million and that puts total downloads counting non-exclusive at 13 to 14.5 million which is much higher than the analysis of 192 of the leading iStock contributors would indicate. (See: http://www.selling-stock.com/Article/istockphoto-download-trends). I still think my download analysis or around 10 million is fairly accurate. I would like to see more exclusive contributors weigh in to this discussion and let us know what their average sale is.

My numbers show that buyers paid between $25 and $30 per image. Taking 192 members and extrapolating for everyone just may not be that accurate.

I'm Exclusive. My numbers are very similar to those of tickstock - based on my royalty percentage, buyers have paid an average of between $24.49 and $30.77 per image for my sales, this year, not including ELs, PP or GI.

ShadySue · « **Reply #43 on:** October 10, 2013, 11:39 »

I'm exclusive, have very few Vettas and relatively few E+, most of my sales are M and below and the average cost per dl this year so far has been $18.60.

Pickerell · « **Reply #44 on:** October 10, 2013, 11:40 »

To MichaelJayFoto

I didn't mean to ignore you. The post I was referring to was the first post on this thread. I am somewhat digitally challenged. I haven't figured out yet how to copy sections of a post and include them in my post. Please forgive me.

Pickerell · « **Reply #45 on:** October 10, 2013, 11:43 »

Thanks to everyone. It sounds like $25 may be a good average for Exclusive sales.

MichaelJayFoto · « **Reply #46 on:** October 10, 2013, 12:10 »

Quote from: Pickerell on October 10, 2013, 11:40

I didn't mean to ignore you. The post I was referring to was the first post on this thread. I am somewhat digitally challenged. I haven't figured out yet how to copy sections of a post and include them in my post. Please forgive me.

Press the quote button on the post you want to quote and delete the parts you don't need for your response.

Seriously, I don't feel ignored. I highly value your insights and the amount of work you put into figuring things out. I am happy to provide the small data points I have access to.

gclk · « **Reply #47 on:** October 11, 2013, 03:57 »

Quote from: Pickerell on October 07, 2013, 14:52

(snipped)

On another point, according to Rebecca Swift, head of creative planning for iStock there are more than 30 million images on iStock. Does, anyone believe that number? Where did all those images come from? Given how tight the editing has always been I don’t think they were anywhere near that number a year ago. Anyone have any thoughts?

Never seen a claim that iStock has 30 million images... could it have been misheard or a typo, and she actually said 13 million? At www.istockphoto.com/stats the figure given for total files is 16344161, but that includes all media types, and apparently isn't totally reliable.

Different subject, and I'm sure you're very well aware of this Jim, but when trying to approximate revenue or profitability for agencies people often see the agency's income as just the commission side of the commission/royalty split, so between 55% and 85% of sales in iStock's case.

But that's only part of the story - on top of that there's also revenue from... credits expiring after a year; other unused credits; smaller contributors who never reach or take payout; subscriptions that are not used; exchange rate 'hedging' (an extra commission fluctuating somewhere around 15-25% on the full price of non-USD purchases, taken before the normal commission/royalty calculation); Extended legal guarantees at 100 credits, where the contributor gets no royalty. I'm sure there are many more...

ShadySue · « **Reply #48 on:** October 11, 2013, 04:02 »

Quote from: gclk on October 11, 2013, 03:57

Quote from: Pickerell on October 07, 2013, 14:52
I'm sure there are many more...
Their (presumed) 'fixing fee' for the big 'deals' ...

Pickerell · « **Reply #49 on:** October 16, 2013, 18:04 »

I have been able to confirm that Getty does include Thinkstock in the approximately $300 million that they report as Midstock revenue. It is unclear how much of that $300 million is generated by Thinkstock.

ShadySue · « **Reply #50 on:** October 16, 2013, 18:16 »

Quote from: Pickerell on October 16, 2013, 18:04

I have been able to confirm that Getty does include Thinkstock in the approximately $300 million that they report as Midstock revenue.

They redefine all sorts of words to suit their own agenda.

Do they think they sell any microstock nowadays?

tickstock · « **Reply #51 on:** October 16, 2013, 18:18 »

Mantis · « **Reply #52 on:** October 16, 2013, 18:44 »

Quote from: tickstock on October 16, 2013, 18:18

Quote from: Pickerell on October 16, 2013, 18:04
I have been able to confirm that Getty does include Thinkstock in the approximately $300 million that they report as Midstock revenue. It is unclear how much of that $300 million is generated by Thinkstock.

The numbers you are using come from this report right? http://www.businessweek.com/news/2013-09-04/caryle-group-s-getty-images-ratings-on-review-for-cut-by-moody-s

It says 33% is midstock, 33% is premium, and 25% is editorial. What is the remaining 9% ($80 million)?

Robbing the contributors.

tickstock · « **Reply #53 on:** October 16, 2013, 18:50 »

Mantis · « **Reply #54 on:** October 17, 2013, 15:52 »

Quote from: tickstock on October 16, 2013, 18:50

Quote from: Mantis on October 16, 2013, 18:44
Quote from: tickstock on October 16, 2013, 18:18
Quote from: Pickerell on October 16, 2013, 18:04
I have been able to confirm that Getty does include Thinkstock in the approximately $300 million that they report as Midstock revenue. It is unclear how much of that $300 million is generated by Thinkstock.

The numbers you are using come from this report right? http://www.businessweek.com/news/2013-09-04/caryle-group-s-getty-images-ratings-on-review-for-cut-by-moody-s

It says 33% is midstock, 33% is premium, and 25% is editorial. What is the remaining 9% ($80 million)?

Robbing the contributors.

And how about a serious answer too?

Lighten up tick.

tickstock · « **Reply #55 on:** October 17, 2013, 15:57 »

Ron · « **Reply #56 on:** October 17, 2013, 17:14 »

Quote from: tickstock on October 17, 2013, 15:57

Quote from: Mantis on October 17, 2013, 15:52
Quote from: tickstock on October 16, 2013, 18:50
Quote from: Mantis on October 16, 2013, 18:44
Quote from: tickstock on October 16, 2013, 18:18
Quote from: Pickerell on October 16, 2013, 18:04
I have been able to confirm that Getty does include Thinkstock in the approximately $300 million that they report as Midstock revenue. It is unclear how much of that $300 million is generated by Thinkstock.

The numbers you are using come from this report right? http://www.businessweek.com/news/2013-09-04/caryle-group-s-getty-images-ratings-on-review-for-cut-by-moody-s

It says 33% is midstock, 33% is premium, and 25% is editorial. What is the remaining 9% ($80 million)?

Robbing the contributors.

And how about a serious answer too?

That was, but as usual you always refuse to look at the entire picture and choose to selectively support your posts with clippets.

What does that mean? It was a question about where the other 9% of revenue was coming from because 33% + 33% + 25% does not equal 100%. Robbing contributors is your serious answer? What they get 80 million dollars a year from illegally stealing people's money? That's quite a charge do you care to back it up with snippets, clippets, or facts?

Ask Yuri, he is familiar with adding up percentages to less than 100%

tickstock · « **Reply #57 on:** October 17, 2013, 17:15 »

Ron · « **Reply #58 on:** October 17, 2013, 17:16 »

Quote from: tickstock on October 17, 2013, 17:15

Quote from: Ron on October 17, 2013, 17:14
Ask Yuri, he is familiar with adding up percentages to less than 100%
I don't get the reference or what it has to do with the question.

Its an inside joke. Never mind.

Ron · « **Reply #59 on:** October 17, 2013, 17:18 »

You remind me of Buzz Killington.

Quote

Buzz Killington is a well-dressed British man from the late 19th century. His name is a play on the term "buzz-kill." He is what one would imagine to be "cool" in late 19th-century times, but is a complete and utter buzzkill by modern standards; hence his name, and whence the humor surrounding him derives. The one who mentions how much of a buzzkill he is groans, lifts his glasses and rubs his eyes as if he has a migraine, at the end of each of Buzz's jokes.

http://familyguy.wikia.com/wiki/Buzz_Killington

MichaelJayFoto · « **Reply #60 on:** October 18, 2013, 04:25 »

Quote from: tickstock on October 16, 2013, 18:18

The numbers you are using come from this report right? http://www.businessweek.com/news/2013-09-04/caryle-group-s-getty-images-ratings-on-review-for-cut-by-moody-s

It says 33% is midstock, 33% is premium, and 25% is editorial. What is the remaining 9% ($80 million)?

Speculation A: As I read it, it does not say "33%", it says "one third". Nobody is saying that meaning "exactly 33%". It could mean anything in the range of maybe 30% or 35% or even 38%... we can just assume it is more than "about a quarter" and certainly less than "about half".

Speculation B: Getty does have other smaller areas for revenue streams. They might consider "Footage" another stream that adds a few more percent. They might consider "copyright enforcement" a different stream. As far as I know they offer customized shoots in some occasions. And we don't exactly know if they are making money from additional services.

I think we will never know every detail of their business.

Pickerell · « **Reply #61 on:** November 07, 2013, 13:28 »

Sorry for a very late reply. The other 9% of Getty revenue is probably Footage.

That's 33% for Midstock, 33% for Premium, 25% for Editorial and 9% for Footage.

Jim

pancaketom · « **Reply #62 on:** November 07, 2013, 17:18 »

My sales certainly don't average L size - much smaller. When I start to calculate how much people paid for the sales that get me pennies it just pisses me off though.

I also think that TS and the much cheaper indie content might be a too little too late attempt to choke off the competition and they are willing to take a drastic loss in income to do it.

I think the wholly owned content has to be considered here, since those DL probably don't show in any analysis of contributors and 100% goes to them.

Also you need to consider that "exclusive" might not mean what you think it means.

I also wouldn't be surprised to see TS and others lumped into midstock if they thought that suited the narrative they were spinning. Remember that a lot of this is to make a rosy picture to try to get people to part with their money. I seem to recall bragging about how great sales and profits and projections were out of one side of their mouth while crying poverty and unsustainable out the other.

Interesting to try to back out the real numbers - thanks for posting. I fear the error bars are still very large though.

cobalt · « **Reply #63 on:** November 07, 2013, 17:31 »

I wonder how many sales of the "premium" content are actually sales from istock exclusive content - either from vetta/Agency, E+ or even through House or PC contracts.

They´ll never release the data of course, but the exclusives are very reliable image producers with modern content,while many regular getty contributor portfolios are quite small.

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