Seemingly out of the blue, iStockphoto announced a major change in stock photography royalty rates starting in 2011.
Gone are the days of when a contributor’s canister level (based on number of total downloads) determined the royalty rate received by the contributor. Starting in 2011, the royalty rate will be based on annual “targets” of redeemed credits.
This is about the best summary (from full time iStock contributor Nicole Young) of the new royalty structure I’ve seen so far:
The new formula for calculating commissions and determining what kind of impact it has on the current royalty rate for contributors is challenging, as evidenced by nearly 1500 comments posted in the 8 hours since the announcement was made this afternoon. I’ve made it through about 7 pages of comments on the thread, and see nothing but negative responses thus far.
Many ill comments are directed at Getty as the corporate villain, and many contributors appear to be offended by the manner in which the announcement was made – paying particular attention to the following statement:
. . . . we wanted to produce a solution that:
– would not change most contributors’ total compensation (except for the better)
See the full announcement and forum thread here.
Are you an iStock photographer affected by this change? Feel free to chime in with your thoughts (good or bad) in the comments below. (Just keep it clean.)
UPDATE: After 2631 responses, the iStock thread has been locked and a “response from HQ” is coming soon:
OK, the folks at HQ have been reading the responses and have been putting together a reply. I’m going to lock this so everyone can catch their breath for a few minutes. I’ve been told the response will be posted within the next hour.
UPDATE 2: The official “response from HQ” has been posted here (with around 1300 comments in the first 9 hours it has been up).
Based on an initial reading, it looks like iStock has backed off of the original warm and fuzzy announcement. Now, the tone of the official response would lead us to believe that iStock will go under if it does not stop the bleeding from paying everyone 40% and all those non-exclusive contributors must “bear the brunt” and accept a 25% decrease in commission.
Since roughly 2005 we’ve been aware of a basic problem with how our business works. As the company grows, the overall percentage we pay out to contributing artists increases. In the most basic terms that means that iStock becomes less profitable with increased success. As a business model, it’s simply unsustainable: businesses should get more profitable as they grow. This is a long-term problem that needs to be addressed.
. . . .
None of this is comfort to the 24% of Exclusives who will see a rate decrease – or to any of the non-Exclusives who are, quite frankly, bearing the brunt of these changes.
Essentially, nothing has changed and iStock is moving forward with this plan in spite of the outcry from the community. The comments are even worse in this thread, with many contributors stating an intention to move away from exclusivity and take their library of images to other microstock sites.