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Author Topic: 2008 Pricing and Extended License Adjustments  (Read 13256 times)

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Istock News

« on: December 07, 2007, 14:27 »
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With a new year just around the corner, we have a few announcements to make regarding image pricing here at iStockphoto.

First of all: we"ve made some adjustments to the extended license program. It"s now much more streamlined, with fixed costs for the four different options. We hope this leads to a lot more downloads with Extended Licenses, as designers are able to meet the needs of any project at one rate.

And second, beginning January 7th, 2008, we will be adjusting the price structure for photographs and vector illustrations. We are always trying to provide the best service to our customers while offering the greatest possible rewards to our contributing artists. We feel this new pricing structure strikes the right balance between those two needs. You can see the updated chart for 2008 here.

      


« Reply #1 on: December 07, 2007, 14:40 »
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Wow, these price increases are HUGE.

Small size up 50%.  Medium up 50%.  Large up 55%.

vonkara

« Reply #2 on: December 07, 2007, 14:56 »
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10 credits for Large...Whoou. Hope I sell one shortly when it will be working. I think it's about the best of the two world like they said. Buyers can buy a little more and we receive a lot more!!!

« Reply #3 on: December 07, 2007, 15:04 »
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Don't count your chickens before they hatch. I was around for the last big price increase a couple of years ago and on a portfolio many times smaller than I have now, I was getting more downloads a day than I do now (but making more money now). Meanwhile, Shutterstock has kept prices in line (for now) and I bet you see a bump in downloads at those places where prices don't increase. IS becomes less and less the dominant player in my agencies...

modellocate

  • Photographer
« Reply #4 on: December 07, 2007, 15:12 »
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Of course they could also "raise" prices by adding more sizes, like extra-extra small and extra-extra-extra small (1x1 pixel?)  ;D

« Reply #5 on: December 07, 2007, 15:15 »
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This increase was way too much, and they've been increasing prices too often. I have a hunch they will see total revenue fall when these new prices take effect.

« Reply #6 on: December 07, 2007, 15:23 »
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I would have liked to have seen an increase in the XS price from 1 credit to 2 credits - I get cheesed off whenever I see those 24c commissions.

« Reply #7 on: December 07, 2007, 15:27 »
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I am happy to see IS take the lead on pricing.  Hopefully, the other agencies will follow suit within the next few months.

« Reply #8 on: December 07, 2007, 15:41 »
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As a contributor, I can't complain.  :)

« Reply #9 on: December 07, 2007, 15:44 »
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As a contributor, I can't complain.  :)
You will if the price increase is too much, and your revenue goes down.

« Reply #10 on: December 07, 2007, 15:54 »
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As a contributor, I can't complain.  :)
You will if the price increase is too much, and your revenue goes down.

It will go up at other sites I submit to then.

« Reply #11 on: December 07, 2007, 15:55 »
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Bigstock too have raised the prices recently and they are not going out of business. IStock is there to stay as amazon.com , like it or not.
vphoto

« Reply #12 on: December 07, 2007, 16:37 »
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great news! As we know IS is the industry leader right now I hope others will follow them.instead of trying to compete them with prices. we all (or most of us) agree that there is still room for price increase in microstock royalties. I don't think it would hurt a buyer to pay  5 dollars instead of 1.
and yes BS's increase is also noticeable.happy with that too.


« Reply #13 on: December 07, 2007, 16:56 »
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I haven't seen much improvement in earnings after the last raise they had.  My overall earnings have gone up a lot this year but istock has been disappointing.

« Reply #14 on: December 07, 2007, 18:36 »
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As a marker leader IS won't loose market share because of the increase. I actually think the others are just waiting on the sidelines hoping for IS to increase price so that they can do the same and increase their profits.

« Reply #15 on: December 07, 2007, 18:39 »
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I dont have long expirience of microstock...but this feels good...;)
/lena

« Reply #16 on: December 07, 2007, 19:04 »
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size
now
future
XS
1
1
S
2
3
M
4
5
L
6
10
XL
10
15
XXL
15
20

Credits will range from 0.97 to 1.30, same as today, although packages will change.

Regards,
Adelaide

« Reply #17 on: December 07, 2007, 19:21 »
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Build it and they will come. 

This is one instance where I hope the other stock sites step in line to follow! All aboard!

Competition is one thing, but charging a fair price for our efforts and equipment is a fabulous move.

Good for them !!!

« Reply #18 on: December 07, 2007, 19:31 »
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Time will tell. I'm sure IS has done a huge amount of market research around this and wouldn't raise prices unless they thought they could maintain the downloads. There will always be the people that shop by price and those that go for quality. IS has always had the highest quality with DT right behind and Shutterstock way behind. We'll see in about 3-4 months what happens...

« Reply #19 on: December 07, 2007, 20:02 »
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As I pointed out over on the Getty Share Price thread, Getty had to do something to fulfil its promise to shareholders of generating an extra $50 million in revenue next year.  But I didn't expect 50% price rises straight away.

This isn't a move in isolation.  With Getty having to reduce its own RF prices, this move brings the two organisations nearer.  With the share price down 70% and profits under pressure, Getty has to take drastic action.  It's completely inefficient to be running TWO RF businesses in competition with each other, when that means two sets of employees, two marketing and IT budgets etc.

Within a year or two Getty will integrate its RF businesses into one and then be able to lay off half the employees, IT professionals and save considerable costs.

The price increases allow Getty to switch RF corporate customers to iStock.  There are millions of corporate accounts worldwide with big spending budgets - iStock doesn't need the once in a while or ordinary Joe customer.

The big question is what will happen in terms of expectations for contributors.  With these latest increases many existing Getty photographers might finally make the switch, and indeed be encouraged to do so.  We might find approval standards getting even tougher.

« Reply #20 on: December 07, 2007, 20:06 »
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There is now such a huge price difference between iStock and Fotolia it's unreal........

« Reply #21 on: December 07, 2007, 23:56 »
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As a marker leader IS won't loose market share because of the increase.
Your statement assumes that there are barriers to entry into the market. Basic economics. As the first-in company raises prices it is confronted by newcomers, expanding competitors, or both. A load of new capacity starts to come on line. As the level of customer demand hasn't changed much, there is now more competition for the same business. Either prices fall or, each producer sells fewer units. In both cases, profits decline, and market value drops with them.

The only competitive advantage (barrier to entry) that I can see on the side of IS is its exclusive contributors. I personally don't think that is enough (and I'm exclusive). As for Getty stock, I shorted it in the being of April and it turned out to be a great investment. It's near its 5 year low and I still can't bring myself to buy it because it is still a little over priced.

« Reply #22 on: December 08, 2007, 02:08 »
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I think thats good news. I doubt that iS will loose a lot of customers. And I do not think the last price increase has hurt iS growth at all. My guess is we will continue to see price increases throughout the microstock industry for the next years.

« Reply #23 on: December 08, 2007, 03:46 »
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...The price increases allow Getty to switch RF corporate customers to iStock.  There are millions of corporate accounts worldwide with big spending budgets - iStock doesn't need the once in a while or ordinary Joe customer.

Wouldn't that be a disaster for Getty?  Their RF customers are paying huge fees compared to istock.  The lowest price $49 is just for blog size, the larger sizes can go for thousands of dollars.

I have a feeling they would prefer istock customers to switch to Getty.

« Reply #24 on: December 08, 2007, 05:52 »
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I think thats good news. I doubt that iS will loose a lot of customers. And I do not think the last price increase has hurt iS growth at all. My guess is we will continue to see price increases throughout the microstock industry for the next years.


I agree on that , but the problem is that there will always be sites that will always try to have lowest prices and compete with big ones that way.

I thing that the best thing for photographers  that could happen in the future  is that   contributors form some sort of union , and a strong one. Its never possible to include all contributors , but if  most of the big non exclusive ones were part of souch project , that would start a new era of microstock.


« Reply #25 on: December 08, 2007, 07:06 »
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my sales were better one year ago..... :( now its so much less....so ...hmm...

« Reply #26 on: December 08, 2007, 09:50 »
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The price increases allow Getty to switch RF corporate customers to iStock.  There are millions of corporate accounts worldwide with big spending budgets - iStock doesn't need the once in a while or ordinary Joe customer.


Are you kidding me! That's exactly the market they should be going after, the millions if not billions of people that have an occasional need to put a paper together for something be it a term paper or church newsletter or whatever. Microstock has opened the world of stock to the masses and they really should advertise more to the mainstream...

lisafx

« Reply #27 on: December 08, 2007, 14:43 »
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I would have liked to have seen an increase in the XS price from 1 credit to 2 credits - I get cheesed off whenever I see those 24c commissions.

Know what you mean.  And better yet are the .16 ones.
Still, I think it helps their marketing a lot to be able to say "Images for as little as a dollar".  If they raise the XS price I think there will be more of a backlash...

« Reply #28 on: December 08, 2007, 19:42 »
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I would have liked to have seen an increase in the XS price from 1 credit to 2 credits - I get cheesed off whenever I see those 24c commissions.

A year ago you got these 24c for an S (~800x600px) sized image. The XS was (as lisfx wrote) probably only established to have a "1 credit" image size at all. Raising the royalties for XS IMO would make the XS size pointless so I'm pretty sure this will never happen ...

« Reply #29 on: December 09, 2007, 07:04 »
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I think this raise prepares the road to the "megapixel upgrade":
8 MP --> Medium
12 MP --> Large
16 MP -->XLarge
What do you think?

« Reply #30 on: December 09, 2007, 07:07 »
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Credits will range from 0.97 to 1.30, same as today, although packages will change.

but credits don't range from 0.95 to 1.20 today?

« Reply #31 on: December 09, 2007, 07:17 »
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I think this raise prepares the road to the "megapixel upgrade":
8 MP --> Medium
12 MP --> Large
16 MP -->XLarge
What do you think?

I don't think so.  6mp is fine for most purposes and I don't think this should be sold as a small image.

vonkara

« Reply #32 on: December 09, 2007, 10:31 »
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I think they will add some "super extra large" for example the 1dsMIII. Because Istock whit all older pictures will lost incomes for each downloads.

« Reply #33 on: December 09, 2007, 10:47 »
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my sales were better one year ago..... :( now its so much less....so ...hmm...

But, Peiling - have your sales grown every where else?  If so, is this an indication that Istock is losing customers?

« Reply #34 on: December 09, 2007, 14:39 »
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but credits don't range from 0.95 to 1.20 today?


I read it here
10 credits cost US$13 -> 1.30 per credit
1500 credits cots US$1450 -> 0.97 per credit

Regards,
Adelaide

« Reply #35 on: December 09, 2007, 18:14 »
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The business is settling down after a period of upheaval. The microstock sites which survive 2008 are going to be charging more over time. They'll need to in order to fund the sort of infrastructure and management costs required to maintain and service collections of millions and millions of images. These are real businesses now and starting to mature.

A big collection costs more to operate than a tiny collection.  Ultimately - the more images in a collection, the more people who have to be employed to maintain it. The more successful a site the more it costs to run.

I predict that some sites won't survive 2008 - they won't get their next round of funding. The credit crisis will affect their ability to find new investment. I'd be thinking first about the 2nd and 3rd tier sites. But ultimately there will probably only be room in the market for 2 or 3 viable large RF stock collections. At the most.

iStock will do really well. Being, already, way ahead of the game. And I agree with the people who say that ultimately iStock will be folded into Getty as the de-facto RF brand.

« Reply #36 on: December 10, 2007, 00:01 »
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A big collection costs more to operate than a tiny collection.  Ultimately - the more images in a collection, the more people who have to be employed to maintain it. The more successful a site the more it costs to run.

I predict that some sites won't survive 2008 - they won't get their next round of funding. The credit crisis will affect their ability to find new investment. I'd be thinking first about the 2nd and 3rd tier sites. But ultimately there will probably only be room in the market for 2 or 3 viable large RF stock collections. At the most.

iStock will do really well. Being, already, way ahead of the game. And I agree with the people who say that ultimately iStock will be folded into Getty as the de-facto RF brand.
I see a few problems here.
1) The microstock sites have increasing economies of scale. The more images in the collection, the less it cost to maintain it (per image).
2) The "credit crisis" isn't an investment capital crisis. There is still lots of liquidity in the business loan and investment market.
3) The "only room for 2 or three" assertion I believe is completely off the mark. The only time you see 2 to 3 big players  in a market is when there are significant barriers to entry. There are few barriers to entry in the microstock market. That's what Getty has failed miserably to understand here and why I wouldn't touch Getty stock with a ten foot poll. I do agree that Getty's plan is to fold iStock into their business eventually as the RF brand, but I think that's a huge mistake.

They've raised prices at iStock over the last year and a half enough to drive a lot of their original clients to others photo sources. $32.50 for a vector is getting to be prohibitively expensive for the mom and pop operations (the target market for iStock). By increasing prices so much, and adding corporate accounts, it is clear that they're positioning themselves for larger clients and effectively cannibalizing their own Getty.com customer base.

« Reply #37 on: December 10, 2007, 00:03 »
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The business is settling down after a period of upheaval. The microstock sites which survive 2008 are going to be charging more over time. They'll need to in order to fund the sort of infrastructure and management costs required to maintain and service collections of millions and millions of images. These are real businesses now and starting to mature.

A big collection costs more to operate than a tiny collection.  Ultimately - the more images in a collection, the more people who have to be employed to maintain it. The more successful a site the more it costs to run.

I predict that some sites won't survive 2008 - they won't get their next round of funding. The credit crisis will affect their ability to find new investment. I'd be thinking first about the 2nd and 3rd tier sites. But ultimately there will probably only be room in the market for 2 or 3 viable large RF stock collections. At the most.

iStock will do really well. Being, already, way ahead of the game. And I agree with the people who say that ultimately iStock will be folded into Getty as the de-facto RF brand.

I disagree with this.  There are free sites and sites that don't sell many prints that have huge collections of photos and have been around for years.  The top six microstock sites are making money and are likely to survive.  I read that LO were close to breaking even a while ago and they are one of my lowest sellers.  There might be room for 10 to 20 sites.  There is a big market and we don't know yet how much it will expand.  Sites with relatively low sales don't have to pay out to all the contributors who don't reach the minimum payout level.  I would think that as the collections increase in size, there is more of this free money.

There will be casualties along the way but it looks like sites can survive if they can get some reasonable sales going.


 

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