Tag Archives: iStock

Shutterstock Makes Major Change to Earnings Structure

This week there has been a significant development in the microstock photography industry. One of the largest players upset many of it’s contributors by revamping their royalty structure. Read on to learn more about what’s happening and the reaction as Shutterstock Makes Major Change to Earnings Structure.

What is Shutterstock Announcing?

Shutterstock is announcing a major change to it’s royalty program for contributors. Previously contributors received a fixed amount for each subscription download depending on their level. The minimum royalty is currently USD$0.25. This week’s announcement moves away from a fixed amount to a percentage (also with different levels).


Contributors reactions have been angry with many proposing boycotting Shutterstock

How have Contributors Reacted?

Contributors have reacted negatively with a fear their income will be reducing. Most controversially, contributors percentage will re-set to the lowest level on 1 January each year. Regardless of your portfolio size and previous level of success, every contributor will re-set to 15% royalty at the beginning of each year.

When will the Changes Take Effect?

The changes will be effective from 1 June 2020. Although it seems barely believable, Shutterstock is introducing a major change with less than one week notice.

From this date, contributors percentage royalty will be based on the level of sales achieved so far in 2020. It will then reset to the minimum 15% from 1 January 2021.

Thoughts?

I have liked the certainty which previously came with a fixed royalty per download. If anything, it provided an incentive for Shutterstock to increase prices over time as this would expand their margins.

Unfortunately it seems they are interested in the same model as Getty / iStock who sell high volumes at very low prices, which in turn means very small royalties per download for contributors.

I believe contributors fears are well founded, and expect we will see a decline for contributors revenue per download.

Many Shutterstock contributors have already de-activated their portfolios in protest at this weeks announcement. We wait to see if and when Shutterstock responds.

Subsequent News

Earlier today another microstock agency, Dreamstime, announced an increase in royalties for contributors. The timing of this announcement can only be in direct competition with Shutterstock as they seek to benefit from the discontent Shutterstock has created with contributors.

Where to From Here?

I am going to wait and see what happens to royalties during June 2020 before deciding what actions to take with my small Shutterstock portfolio. If you are a Shutterstock contributor, what are you planning to do?

Thanks for reading Shutterstock Makes Major Change to Earnings Structure.

My Microstock Experience During the Coronavirus Pandemic

I am making the most of the current lock down situation to add to my microstock portfolios. The three microstock sites I upload to are iStock, Shutterstock, and Adobe Stock. Here is my microstock experience during the coronavirus pandemic.

Image Inspection Times

All three microstock sites continue to operate ‘business as usual’ with both uploading and downloading available. It is impressive that there isn’t any real business interruption, though both Shutterstock and Adobe Stock are indicating there may be an impact on inspection times.

My microstock experience during the coronavirus pandemic has largely been ‘business as usual’

I am uploading daily to each site and to date my experience is:

  • Shutterstock – inspection is taking 24-48 hours with files available in the database very soon afterwards
  • Adobe Stock – inspection is taking 3-4 days
  • iStock – inspection is taking 6-8 days (note, I am an ‘independent’ contributor to iStock. I am expecting that exclusive contributors file inspection is faster).

Sales of Newly Approved Files

My newly added content has been a mix of historical files and newly shot coronavirus themed images (discussed more in this post Shooting Stock Images During the Coronavirus Shutdown).

My experience with newly uploaded files is similar to my usual microstock experience:

  • Shutterstock – new files are selling well, particularly those with a pandemic theme
  • Adobe Stock – new files are selling well, and slightly better than my usual experience
  • iStock – unfortunately iStock only reports once per month so at this stage I don’t know how well new images are selling. iStock is well behind the other two agencies in the information it provides to contributors
Social distancing is a popular theme right now

Total Sales

It is still early days in the new ‘pandemic world’. Without full data yet available it seems my overall microstock sales are down on usual sales numbers. I am expecting this to be the case as the overall business activity in the economy is below the normal level.

What is your microstock experience at this time?

Thanks for reading about my microstock experience during the coronavirus pandemic. Happy shooting.

Highs and Lows of Microstock Photography Royalties

This week I received my latest monthly royalty report from leading microstock agency – iStock. It highlighted to me the highs and lows of microstock photography royalties.

So What do I Mean?

Let’s start with the highs. One of my royalties was USD$145 for a single download of one of my images. That’s good news. Especially as the image was shot about 5 years ago and continues to sell. Based on today’s exchange rate, that’s about AUD$200 for a single sale. This type of royalty is uncommon, unfortunately! But when it does happen it is a very nice boost to the overall royalties for the month.

Australian dollars

Occasional big royalties make a significant difference

Now for the lows. One of my downloads generated a royalty of just USD$0.02. I’m really not sure how Getty Images and iStock justify such low royalties. This month I’m glad these small royalties were offset by several large ones.

What Should You Learn from Your Royalties?

I’d suggest not reading too much into individual month royalty amounts. Based on a few large sales, your monthly royalty income can vary significantly from month to month. Making any assumptions based on just one month, or even a small collection of months would be unwise.

So How Should You Assess Progress?

If you are looking for measures which reflect your progress I’d suggest 2 measures are worth looking at.

First is the total number of downloads from month to month. While royalties can vary significantly from month to month, your total download numbers are likely to be much less volatile. There will be seasonal differences in what is downloaded, but the variation in download numbers will not be as dramatic as the variation in royalty amounts.

money

Growing the size and diversity of your portfolio is the only sure way to increase royalties

Second is the total number of files in your portfolio. If you are serious about stock photography you’ll be adding new content regularly. Your number of future downloads – and hence your royalty income – will be determined by the size and diversity of your portfolio. If you want a number you can directly control, measure the number of files in your portfolio and make sure it’s increasing!

What’s the Wrap?

Be happy when the larger royalties come your way. Don’t be too unhappy when they don’t. Keep building your portfolio so that it is large and varied.

Thanks for reading the Highs and Lows of Microstock Photography Royalties. Happy shooting.

Letter to Mark Getty from an iStock Contributor

I have been reading in Petapixel that Getty Images to be Fully Controlled by the Getty Family Once Again. According to that article the Getty family have taken a majority stake in the business, and will take full control. Mark Getty led the negotiation and purchase on behalf of the Getty family. I know very little about the broader Getty Images business, but I have been a contributor to iStock since 2008. I used to love iStock and the high volume, low price business model. With major changes to iStock over recent years it no longer looks like the site I joined in 2008. With this post, it’s time to write a letter to Mark Getty from an iStock contributor outlining the issues and to make suggestions to make iStock great again. 

“G’day Mark,

My name is Craig Dingle. I live in Melbourne, Australia and have been an iStock contributor since 2008. I’ve been reading in Petapixel that the Getty family has taken a majority stake and full control of the Getty Images business. I’m sure you are doing that as you see potential for a good investment. In the stock photography side of the business, and specifically iStock, I see considerable potential but not on the current trajectory. I’ve outlined the issues and potential solutions from a contributors point of view.

Background

When I first joined iStock it was a vibrant community made up of photographers from around the world. iStock was known as the micro stock industry leader, and for the high quality content on the site. It was a badge of honor to be an exclusive iStock contributor. There was a dynamic contributor forum, and contributors who were submitting strong content were making a considerable income. That’s not the case today.

money

Up until 2012/13 contributors could make a significant income in microstock

Where it All Changed

Many things have changed about iStock since 2008.

Where the fundamental shift occurred was when iStock stopped selling licences to contributors images – and starting selling subscriptions. At this point, the most important change in iStock history happened. The interests of iStock and contributors were no longer aligned.

iStock is interested in selling subscriptions. I can see why. With a subscription iStock’s monthly income will fluctuate much less than if it were based on a percentage of image sales revenue.

Where is the misalignment? The contributor is still receiving a percentage of the amount to licence their image.

In my case, I was exclusive and on a 35% royalty. I decided to drop exclusivity last year and now receive 15% royalty as an independent contributor. That means I see many royalties of less than USD$0.20 per download. The lowest royalty I have received for a download is US$0.02. (Some contributors report seeing royalties of US$0.01 but I haven’t had one of these – yet!)

Contributor Royalty Rates Versus other Microstock Libraries

So, one issue is the misalignment of Getty Images interests with contributors interests. The second issue is how the royalties are structured and what it means in royalty per download for your contributors.

Contributors are sometimes receiving US$0.02 royalty when a customer licences one of their images via iStock. Let’s let that settle in for a moment. It’s worth repeating. Contributors are sometimes receiving US$0.02 royalty when a customer licences one of their images via iStock.

iStock’s major competitors overcome this by offering minimum royalties. I now contribute to Shutterstock. My minimum royalty there is US$0.33. It’s not much per download, but it is 16 times higher than iStock is paying on some downloads. iStock is paying contributors much lower royalties per download than the other major microstock agencies.

What’s the Implication of Paying Contributors so Little?

At the level of an individual contributor – the implication for me is that it no longer makes financial sense to contribute images to iStock which have any cost of production. That means I only contribute content that has cost me nothing to produce.

All my other content goes to other agencies where there is a greater financial reward for the contributor.

Again, let’s pause and let that settle in.

Melbourne lifestyle

My stock photography has focused on lifestyle content in the last 3 years. I don’t upload it to iStock as the financial returns are not there.

Other contributors will be in the same boat. I expect that iStock – previously the market leader in microstock – is becoming a dumping ground for contributors of low cost of production images. That’s not likely to make any difference to the iStock collection or business in the short term. But in the long term, iStock risks being the low quality, low price image library. I presume you’ll need to do massive volumes to make that business model work.

Contributor Reporting

An outcome of the royalty structure is that iStock contributors see a major delay in reporting. We get visibility of what content has been licensed at what prices on the 20th of the following month. So for August sales, I see reports on the 20th of September.

Mark, I imagine Getty Images has a monthly board meeting in the middle of each month. I imagine financial results are tabled at that meeting plus management commentary for the previous month. Can you see the irony here?

While Getty Images reviews the previous month’s financial results, contributors are still waiting for their financial reports.

To compound the issue for iStock – your competitors are miles ahead in this area. Each time one of my files is licensed on Shutterstock I get instant notification on my smart phone. It tells me which image was downloaded, what my royalty was, and the total amount Shutterstock now owe me.

The process I take to receive the same information on iStock is – wait until the 20th of the following month to receive data. Then, I download a text file. I save it to my computer desktop. Then I upload it to Qhero stats function to see what has sold for what amounts.

Shutterstock is leaving iStock behind by making it easier for contributors to run their business.

New Content Visibility

When I look at the Qhero stats functionality I see it is mainly my old files which customers are licensing. I’m not getting a return on recent files, which is a major disincentive to upload new content. You can read more about that in this post iStock Shutterstock Comparison.

iStock has identified issues with ‘search freshness’ but there is no evidence that it is taking action. The lack of sales of recent content is a further disincentive for contributors to add fresh material.

Melbourne lifestyle

My new stock content is going to other stock libraries, not iStock

Priorities to Make iStock Great Again

I have more than 10,000 files on iStock so I have a vested interest in seeing that business succeed. As the Getty family take majority ownership and full control, these are my suggestions for priorities to make iStock great again.

Priority 1 – Align the Interests of Contributors with iStock. When a customer licences an image (who’s copyright belongs to the contributor) there must be a financial benefit to the contributor as well as to Getty / iStock. Please don’t suggest that US$0.02 is a fair financial benefit to the contributor.

Priority 2 – Get Serious about Reporting for Contributors. Ironically, iStock doesn’t have a business without contributors content. We are partners. iStock need my content, and I need iStock’s distribution strength. If you want me to produce current, fresh content, you are going to need to build reporting which supports that.

Priority 3 – Find Ways to Reward High Quality Content. The first 2 priorities are the necessary first steps. Priority 3 must be finding ways to reward high quality content. I can tell you directly that I won’t invest in paying models, hiring venues, and paying assistants to receive US$0.02 per download. If the iStock team think back to the high quality collections of the past (Vetta and Signature+) these were real incentives for contributors to excel.

Priority 4 – Clarify the Business Model. iStock is getting confused as to whether it is an image library for royalty free content, or a broker of contract work between customers and contributors. The Custom Content initiative would not be happening if the core stock photography model worked better for contributors and customers. I see this as a distraction from iStock’s core business.

Conclusion

Mark, I genuinely want the iStock business to be successful – and much more successful than it is now. I would love to be proudly telling people I’m an iStock contributor. That’s not the case today, and I fear that the current trajectory means poor outcomes for contributors in the short term, and for the iStock business model in the medium term.

I hope the Getty family taking majority ownership and full control is an opportunity to steer the ship on a new course.

Kind regards,

Craig Dingle”

Note, I don’t really expect Mark to read this content, nor to respond. But I hope that it is helpful for photographers considering stock photography options to understand the current market and make decisions appropriate for their goals. Thanks for reading this letter to Mark Getty from an iStock contributor.