Important!: Royalty Changes and iStock Collections

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kkthompson
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Posted Tue Sep 7, 2010 1:18PM
First, I’d like to thank everyone for bearing with us while we made the shift to F5. It went almost flawlessly, which is a testament to the strength of iStockphoto. We’ve seen excellent growth in sales and traffic since the launch. We also have many more features to roll out now that the underpinnings are there. I’ve been in the meetings watching them evolve. They're exciting and will make everyone's lives much easier. The team is excited to get them into your hands.

Building upon the success of F5, this post is about other changes to position iStock for continued long-term success. iStock is making changes to contributor structure & compensation and our collections with the goal of expanding our industry leadership in fresh, creative, quality, exclusive content.

With that overriding objective, we wanted to produce a solution that:
- would not change most contributors' total compensation (except for the better)
- adjusts the model to better reward contributors of premium content
- adjusts the model to better reward new contributors submitting high-quality work
- allows our top contributors to earn more
- rewards active participants in the iStock community
- takes advantage of the full reach of Getty Images to get your content in front of more customers.

Some of these changes will take place as soon as this month and some will take effect in the first weeks of 2011. I will outline the changes in this post and provide links to pages with more details. Please take the time to read everything through carefully. We'll be happy to answer questions or clarify where we can.

iStockphoto is changing its royalty structure and how it's determined. Beginning in 2011 each contributor's royalty rate will be based on the total number of credits used to download files from the previous year, as opposed to a lifetime download total.

We are adding a new premium content collection: The Agency Collection. It will be a premium product priced above Vetta. It will include content from external agencies as well as selected iStock contributors. We are also making changes to Vetta including how it is priced, the royalties associated and how the collection is sold within the Getty Images family.

So here are the details of what's changing:

New Royalty Levels
Effective January 2011
Royalty rates will no longer be associated to your lifetime download totals, represented by the canister icons. Canisters will now be separate from royalty rates and continue to reflect total lifetime downloads (but they will no longer indicate royalty rates).

iStock will now set royalty levels annually. The levels are set based on overall iStock credit usage from the previous year. Beginning in January 2011, all iStock contributors will qualify for their royalty level based on the total number of credits used by customers to download a contributor’s files in 2010 – these will be referred to as Redeemed Credits. There will be different royalty levels set for each file type.

The royalty rate level you start with beginning in January 2011 will depend on the total number of Redeemed Credits from January 1, 2010 to December 31, 2010. As with the current system, over the course of 2011, you will continue to graduate to higher royalty levels as you meet the targets.

• Each iStock credit used on your files equals 1 Redeemed Credit
• Your initial royalty rate for 2011 will be determined by the total number of Redeemed Credits you get in 2010 – those are the numbers we’re posting today
• January 11, 2011 we will post new targets. These targets will affect your royalty growth for 2011 and set your initial royalty rate for 2012.
• Your minimum royalty rate will not decrease throughout the year. You are guaranteed this royalty rate for the entire year with the possibility to go up levels as you meet additional targets
• Redeemed credits do not pass from one year to another
• You will retain the royalty rate from the end of the previous year


This new structure addresses a number of often asked for items:
• Because royalty targets are now based on the number of credits used and not the number of individual downloads, you will accumulate Redeemed Credits on extended licenses as well
• Now a Vetta download doesn't have the same value as a dollar bin download, and a small file isn't the same as an XXL one. If a file sells for 50 credits, that's the value you'll receive
• Your royalty percentage will be private--this information will not be publicly available unless you wish to share it
• The new structure is more fair to talented artists just arriving at iStock, yet takes nothing away from active long-timers who represent a critical element of the iStock community

We have added a field in the Stats tab of contributor’s profile pages that shows the total number of Credits Redeemed for both 2009 and 2010 to date (up to September 1), as well as the target levels.

The 2011 royalty targets are posted here.

For non-exclusive contributors the royalties will range from 15 to 20% for content sold on iStock.

For Exclusive contributors, we are happy to announce there will be a new top royalty level of 45%. The range will now be: 25, 30, 35, 40, 45%.

Non-exclusive contributing artists will still qualify for Exclusive status based on their total lifetime downloads. Just to be clear – everyone who is currently Exclusive will remain that way. No one will be dropped from Exclusivity and Non-exclusive artists are still eligible for exclusivity after 500 downloads or early exclusivity at 250 downloads with a 50% approval rate.

We will continue to pay out royalties based on the value of the credit purchased. In the case of royalties from Subscription credits we are adjusting the minimum value of the subscription credit from $0.95 to $0.65. This is still the highest minimum subscription payout in the industry. We are also removing the 10 percent bonus on Extended License royalties for Exclusive contributors.

The Agency Collection
Effective September 2010
Later this month we will introduce a new collection here at iStock--it will be the first time we've allowed outside agencies on the site. The Agency Collection will feature some of the world's best photographers and agencies, selected by Content teams at Getty Images and iStock. Later in the month, we'll be inviting select iStock photographers to submit to the collection as well.

The Agency Collection will be priced at a premium to Vetta and will be available on iStock, Getty Images, Jupiter and PunchStock.

Exclusive iStock contributors will be invited on an individual basis to add their content to this collection. We will pay a modified royalty for the Agency Collection that fits between traditional stock and current iStock royalties. The royalty range for this collection will be: 22, 24, 26, 28, & 30% when sold on iStock. For content sold off of iStock, all royalties will be 20%.

Vetta Collection Changes
Effective September 27, 2010
Vetta has been more successful than we ever thought possible. It's been a wakeup call to the industry--it's that good. Vetta has far surpassed the definition of microstock and is underpriced when looking at any of its competitors. As such, we will be increasing the prices for Vetta content as well as adjusting Vetta royalties, which will now range from 22, 24, 26, 28, & 30% when sold on iStock. Even with the decrease in royalties, this will be a net gain for contributors, and customers are still getting one of the best collections in the world at a fraction of traditional stock pricing.

The Vetta Collection will now be mirrored at Getty Images under their traditional license model. We've been doing similar content mirroring with iStock Vectors and Videos for several months now, with exceptional results.

For the remainder of 2010, Vectors will be removed from the Vetta Collection and added back into the Exclusive collection under the Elaborate category (at the same price point). We have a bigger plan in the works for Vectors and will be telling you more about this in the months to come.


iStock Content at Getty Images
Effective October 2010
The Agency and Vetta Collections mirrored on Getty Images site’s will have the standard Getty Images' royalty rate of 20%. These royalties will be paid to your iStock account no later than 45 days after the end of the month (e.g. March royalties will be paid out by May 15) and will be handled through the existing iStock ASA – you will not have to sign a new Getty Images contract. By opting-in to be considered for Vetta and/or Agency Collection in your ‘Preferences’ you agree that your content may be made available for license in the Vetta and Agency Collections on other Getty Images’ sites.

Downloads from content sold off of iStockphoto (Partner Program and any collections sold on Getty Images and Getty Images family of sites) will not accumulate Redeemed Credits (as they don't use credits for the purchase).

Summary
These are substantial changes. They are designed so the bulk of our members won't see any change in overall payouts. For those who participate in Vetta & Agency, we expect decent raises in your total take-home payouts with the collection being sold on the other properties.

More and more of our contributing artists are investing full time in iStockphoto and we take that seriously. We have a responsibility to ensure that people who work hard creating our content are paid well.

We know change is never easy and comes with challenges, but these changes allow iStockphoto to continue to improve the quality it offers customers and appropriately reward those creating the content demanded by customers. These changes reward participation and talent, and are critical to the long-term success of our customers, contributors and iStock.
rogermexico
Member is a contributor and has less than 250 Photo downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsMember has won a contest
Posted Tue Sep 7, 2010 1:18PM
We've prepared a condensed version of all the main facts here. Please refer to this page often.

Please read everything before you start asking questions. It is a lot to take in and people are going to have a lot of questions. We will do our best to make sure all questions about how the new system works get answered.

I'm going to reserve the next post for FAQ answers as we start to see what the main things that need clearing up are.
rogermexico
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Posted Tue Sep 7, 2010 1:19PM
- - Reserved for FAQ - -
JJRD
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 125 Audio downloadsMember is a contributor and has less than 250 Flash downloadsMember is a Bronze contributor and has 250 - 2,499 Illustration downloadsExclusiveExclusive iStockphoto IllustratorMember has had a submission accepted to the Designer SpotlightMember has had a File Of The WeekMember has been inducted into the iStockphoto Hall of Fame.
Posted Tue Sep 7, 2010 1:19PM
Please take the time to read carefully, and thank you so very much indeed.

(Edited on 2010-09-07 13:19:58 by JJRD)
Thomas_EyeDesign
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsMember is a contributor and has less than 125 Audio downloadsExclusiveExclusive iStockphoto Audio ArtistMember has had a File Of The Week
Posted Tue Sep 7, 2010 1:28PM
Interesting I'll need to read this a few times before commenting.
dgilder
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsMember has had a submission accepted to the Designer Spotlight
Posted Tue Sep 7, 2010 1:31PM
I have read carefully, and basically what I see is that the 5% bump I was expecting sometime in the next year when I finally hit Diamond is actually going to be a 5% pay cut starting January 1st.

Fail.
shank_ali
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsExclusiveMember has won a contest
Posted Tue Sep 7, 2010 1:31PM

iStockphoto is changing its royalty structure and how it's determined. Beginning in 2011 each contributor's royalty rate will be based on the total number of credits used to download files from the previous year, as opposed to a lifetime download total.


Read it 3 times and still don't no what the implications are for my wallet....
dan_prat
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsExclusiveMember has had a File Of The Week
Posted Tue Sep 7, 2010 1:33PM
Wow. I did not see this coming.
Thomas_EyeDesign
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsMember is a contributor and has less than 125 Audio downloadsExclusiveExclusive iStockphoto Audio ArtistMember has had a File Of The Week
Posted Tue Sep 7, 2010 1:37PM
Posted By shank_ali:

iStockphoto is changing its royalty structure and how it's determined. Beginning in 2011 each contributor's royalty rate will be based on the total number of credits used to download files from the previous year, as opposed to a lifetime download total.


Read it 3 times and still don't no what the implications are for my wallet....

At this point no one does, time to beat those numbers, and see what comes out.
pastorscott
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsExclusive
Posted Tue Sep 7, 2010 1:37PM

Well there goes a -33% $ drop from yr to yr for me and subsequent increase for you. It just keeps getting harder and harder doesn't it?

ETA: Correct %. Thanks Adam Kaz for reminding me.


iSCAPRC

(Edited on 2010-09-07 23:31:30 by pastorscott)
redhumv
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsExclusiveMember has had a submission accepted to the Designer SpotlightMember has had a File Of The Week
Posted Tue Sep 7, 2010 1:39PM
Wow ... lot's to be digested in there! Glancing at the credits I've received thus far this year, it appears it will be no payout change in where I was targeting with my canister changes (other then the Vetta payouts decreasing). I'm going to have to step up my game and am looking forward to more details on the new collections. The shared Vetta files on Getty sounds like some great exposure.
JasonPrince
Member is a Bronze contributor and has 250 - 2,499 Photo downloads
Posted Tue Sep 7, 2010 1:39PM
okay just checking this quick...so non-exclusives effectively have to achieve 1,400,000 credits in a year which will mean they receive 20% for the following year in royalties?...also at the moment, prior to the cahnges, are non-exclusives earning 20% royalties default or is there a cannister implication (for non-exclusives) in their remuneration...searched for it but its a bit unclear so could not draw my own conclusions..

if i read between the lines here the push from IS side is really to make contributors consider strongly taking the avenue of going exclusive as a non-exclusive can never earn more than 20% but can earn less - depending on the previous years sales right? I dont mind this so much as I am striving to get to the 250dl mark but i think this might leave a stink with some folks - anyways different strokes for different folks!...sorry if my question above are mundane but i tried finding the answers in the FAQ and got some but as said not so clear, so appreciate all the help.

Still think you guys deserve kudos for a good platform for the public! Well done from my side!
Alina555
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a Bronze contributor and has 125 - 1,249 Audio downloadsMember is a Bronze contributor and has 250 - 2,499 Illustration downloadsExclusiveExclusive iStockphoto IllustratorExclusive iStockphoto Audio ArtistMember has had a File Of The Week.
Posted Tue Sep 7, 2010 1:39PM
wow .... major changes... off to read some more ...
GavinD
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsExclusive
Posted Tue Sep 7, 2010 1:40PM
It would be awful to miss out on a higher percentage by being one redeemed credit too few.
theasis
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a Bronze contributor and has 250 - 1,249 Video downloadsMember is a contributor and has less than 125 Audio downloadsMember is a contributor and has less than 250 Illustration downloadsExclusiveExclusive iStockphoto VideographerSpecial Ops - Awarded to Administrators as a temporary badge to denote their dedication to large horrible jobs that pay little or nothing. Bearers are rewarded with great respect and public admiration.
Posted Tue Sep 7, 2010 1:42PM
That's a lot to absorb.
I have one mundane question that's not covered by the article or Kelly's post, as far as I can see.
Will our upload limits be based on canister level or Redeemed Credit level (or, indeed, something else)?

Thanks
JJRD
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 125 Audio downloadsMember is a contributor and has less than 250 Flash downloadsMember is a Bronze contributor and has 250 - 2,499 Illustration downloadsExclusiveExclusive iStockphoto IllustratorMember has had a submission accepted to the Designer SpotlightMember has had a File Of The WeekMember has been inducted into the iStockphoto Hall of Fame.
Posted Tue Sep 7, 2010 1:43PM

Posted By theasis:
That's a lot to absorb.
I have one mundane question that's not covered by the article or Kelly's post, as far as I can see.
Will our upload limits be based on canister level or Redeemed Credit level (or, indeed, something else)?

Thanks

Canister levels.
IngredientsPhoto
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsMember is a Silver contributor and has 2,500 - 9,999 Illustration downloadsExclusiveExclusive iStockphoto IllustratorExclusive iStockphoto VideographerMember has had a File Of The WeekMember has won a contest
Posted Tue Sep 7, 2010 1:44PM
This is the most awesome news from all the time. Good work, thank you for taking care of us.
rmfox
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a contributor and has less than 250 Flash downloadsMember is a Silver contributor and has 2,500 - 9,999 Illustration downloadsExclusiveExclusive iStockphoto Illustrator
Posted Tue Sep 7, 2010 1:44PM
Read...and re-read...and read again....and looks like i'm getting less now if i'm figuring it right
Whiteway
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsExclusiveExclusive iStockphoto Videographer
Posted Tue Sep 7, 2010 1:45PM
Another Collection? Oh, joy!

What happened to K.I.S.S. (Keep It Simple, iStock)?
GavinD
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsExclusive
Posted Tue Sep 7, 2010 1:45PM

"With that overriding objective, we wanted to produce a solution that:
- would not change most contributors' total compensation (except for the better)"


Surely 'most' are non-exclusive? They get 20% royalty at the moment as a base level. This is going to go down to a miserly 15%. That's a 25% drop for them in hard-earned royalties. I cannot see these contributors cheering this one!
This thread has been locked.
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