Where we go from here

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kkthompson
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 been inducted into the iStockphoto Hall of Fame.
Posted Fri Sep 10, 2010 4:33PM
This week was my 6th anniversary here at iStock. Probably not the easiest week in iStock history to have it on.

It does feel very 'full-circle' though. I remember standing around with Bruce in 2004, agonizing over this new idea — exclusivity for our contributors. It was excruciating. It looked great on paper, but would it fly? Would they really leave competitors to come sell only at tiny little iStock? We had only ever paid out 20% royalties. Would a jump to 40% put us in the poor house? Would competitors follow suit? None of us slept for a week. Besides selling the company, it’s probably one of the toughest decisions of my business life.

Part of the difficulty in that decision was who was on the other end and affected the most. You aren't just contributors, many of you had, even by then, become close friends. There aren’t many businesses that can say that about their suppliers.

Of course that’s what makes these last few days so hard. It's our friends calling us out in the forums, hurt and scared we’ve sold you out.

We know this news has taken you all by surprise, and we're sorry for the anguish it's caused. We know this is a big shift, and we expected that you would have strong feelings about what it means to each of you individually, and iStock as a whole.

Looking back at the decision about Exclusivity all those years ago, the team did a pretty miraculous job with the exclusive program. I’d hazard a guess that it’s a big part of what made iStock really different from the rest. But like every decision, we didn’t get everything right. We set the canister levels to what we thought would be challenging but still attainable over the long term through hard work. What we had no idea at the time was how much and how quickly the site would grow. We expected - and wanted - to pay more and more money out to contributors. But what we quickly realized was that it's one thing for the payout amount to increase over time, it's another thing for that percentage of our total cost to always increase over time. We saw it coming, but we also took the easier road. “Ehh, we’ll cross that bridge when we get to it.”

Tuesday was iStock’s "bridge" day, and we crossed it full on.

Over the last few months we've seen this coming. These decisions have been wrestled with, thought over, adjusted, re-thought and tweaked many times over, with a very close eye on all the hard data we have accumulated over the years, and in the full light of the reaction it would bring. But this is the system we need to go forward with, and there isn't any flexibility for now.

As I've said, we will re-examine targets once the year-end numbers are in, especially if our projections prove wrong. In the meantime, we are going to have to wait and see, and we ask you to do the same, if not with understanding, then at least with patience.

We’ve known this was coming for a long time, but it’s also a pretty good time for it to come. We’re in a position where we can soften the blow a great deal, and we’ve tried to accomplish this as much as possible. Like this past year, we’re pushing for significant growth next year. For those that do happen to fall a level, we’ll push to make that up to you with more sales. For the contributors with files in Vetta or Agency, they should see a significant bump from those collections being sold on Getty Images.

In the last 6 years, easily the thing I’m most proud of is how many lives we’ve changed. We’ve opened a closed industry to tens of thousands of people who love their craft. iStock contributors are earning $1.7 million each week. That number still stupefies me (I wish I could let the 2004 me know!). We expect to bring that number up over $2 million next year.

But money isn’t going to be what makes you all happy. You want to know that this is still the best place to be, to hang out, and sell your work. You may not be convinced today like you were last week, but it’s our job to make sure you feel that way again soon.

Although some of you may still be struggling with the decisions communicated this week, I want you to know that I would tender my resignation at iStock before I had to do something I couldn't stand behind. The same can be said about all Executives here at iStock.

So hang in there. We are focused on getting the work done we need to do before the end of the year.
I've heard some comments that iStock has changed. And it has — we’re a much larger, more successful company. But what hasn't changed is what we value as a company: the people that make iStock kick-ass everyday. The changes we announced this week will keep iStock successful for many years.
wellesenterprises
Member is a Silver contributor and has 2,500 - 9,999 Photo downloads
Posted Fri Sep 10, 2010 4:36PM
"And it has — we’re a much larger, more successful company."


Then why is our pay being cut? Companies which become more successful typically reward employees with higher pay, not lower pay. How should one feel about a company which becomes more successful and then decides to lower the pay to their employees? Please tell us how we should feel about such a company. Again, your words: "...we’re a much larger, more successful company."

(Edited on 2010-09-10 16:41:50 by wellesenterprises)
jentakespictures
Member is a Silver contributor and has 2,500 - 9,999 Photo downloads
Posted Fri Sep 10, 2010 4:37PM
Looks like there's not much else to say. I hope the bad press and people leaving (contributors and buyers) won't hurt the company in the long run. I guess we'll just have to see what happens.

I do wish you would address the issues of:

- People promising to become exclusive with the guarantee that they would keep their canister level and royalty rate.
- Why Vetta files have such a lower royalty rate.
- Why illustrators' credits are worth half of photographers' credits.

(Edited on 2010-09-10 16:39:46 by jentakespictures)
dirk-r
Member is a Bronze contributor and has 250 - 2,499 Photo downloads
Posted Fri Sep 10, 2010 4:38PM
It stays the same bullshit. Bye.
dan_prat
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsExclusiveMember has had a File Of The Week
Posted Fri Sep 10, 2010 4:38PM
All fluff.  At the end of the day you're still gouging your contributors (some an ASTONISHING 85%) all well iStock fills its pockets. Nothing new said except reminiscing about the "old days".  Sorry, not good enough.
Susan_Stewart
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a Bronze contributor and has 250 - 2,499 Illustration downloadsExclusiveExclusive iStockphoto IllustratorMember has had a File Of The Week
Posted Fri Sep 10, 2010 4:39PM
You have killed any incentive to contrbute as an independent and killed the good will of the large majority of exclusives. Just how does this help a company whose success has been basedon a cooperative?
JoeClemson
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a Bronze contributor and has 250 - 1,249 Video downloadsExclusive
Posted Fri Sep 10, 2010 4:40PM
I'm now looking for somewhere else. I'm truly sorry.
CT757fan
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsExclusive
Posted Fri Sep 10, 2010 4:40PM
You are the weakest link.
jjneff
Member is a Bronze contributor and has 250 - 2,499 Photo downloadsMember is a Diamond contributor and has 12,500 - 99,999 Video downloadsMember is a contributor and has less than 125 Audio downloadsExclusiveExclusive iStockphoto VideographerExclusive iStockphoto Audio ArtistMember has had a File Of The Week
Posted Fri Sep 10, 2010 4:42PM
Stunning
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 SpotlightThis member has lost their last cage match. Consider this the black eye the bully gave you after school by the bike racks.
Posted Fri Sep 10, 2010 4:43PM
What about the reason I am an exclusive today? The 40% royalties you promised me when I hit diamond. I'm supposed to be grandfathered in to that per the agreement we signed before I went exclusive in February.
adamkaz
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 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloadsExclusiveExclusive iStockphoto IllustratorExclusive iStockphoto VideographerMember has had a submission accepted to the Designer Spotlight
Posted Fri Sep 10, 2010 4:45PM

Kelly, I appreciate your words, but nothing said to this point has justified the royalty changes. The only explanation we have is greed, whose greed I do not know. But to go back and turn the royalty % dials backwards on work that we've produced here for years is just wrong. You don't need it. iStock doesn't need it. 
GeoffBlack
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsExclusiveMember has had a submission accepted to the Designer Spotlight
Posted Fri Sep 10, 2010 4:45PM
I will no longer buy here.
PaulCowan
Member is a Diamond contributor and has 25,000 - 199,999 Photo downloadsMember is a contributor and has less than 250 Flash downloadsMember is a contributor and has less than 250 Illustration downloads
Posted Fri Sep 10, 2010 4:45PM
/
/At least I now understand this:


Why are the targets different for each file type?

The average download for each file type involves a different number of credits. The average illustration download involves almost twice as many credits as the average photo download. So to keep the
distribution of the different royalty levels more or less similar between different kinds of artists, the targets need to be different.

A Vector artist's Redeemed Credit total will grow faster than a photographer's who gets the same number of downloads. So while the targets for the Vector artist are higher, if the Vector artist and Photographer are similarly successful as far as the number of downloads they get, they will progress through the royalty targets at roughly the same rate.






What they are trying to say in a convoluted way is that basing levels on Redeemed Credits is grossly unfair. Levels should be based on downloads not credits, and this will correct the problem created by the Redeemed Credit system letting graphic artists get theire hands on too much cash.


Brilliant! Only iStock could launch a new system that includes an annoucement that the system is wrong.


(I seem to have got threads confused as they just locked the other one)

(Edited on 2010-09-10 16:56:53 by PaulCowan)
Susan_Stewart
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a Bronze contributor and has 250 - 2,499 Illustration downloadsExclusiveExclusive iStockphoto IllustratorMember has had a File Of The Week
Posted Fri Sep 10, 2010 4:45PM
Where do we go from here? Well personally I've already deactivated about a third of the files (non sellers so far). I was thinking I could live with 25 per cent royalty. But I don't think I can live with the head in the sand idiotic total lack of understanding from management about how to run a supply chain based on cooperative crowd sourcing.

I guess I'll leave the rest up, but there's a horrid sour taste in my mouth. I'm really really sorry for those people who put their trust in the company for their livelihood. Best wishes folks.
lostinbids
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsExclusiveExclusive iStockphoto VideographerThis member chickened out of their last cage challenge. What, are you scared of a little photoshop challenge?
Posted Fri Sep 10, 2010 4:45PM
Ho Hum, at least there is still an exclusivity program.
karenhermannCLOSED
Member is a Bronze contributor and has 250 - 2,499 Photo downloadsExclusive
Posted Fri Sep 10, 2010 4:46PM
Posted By wellesenterprises:

"And it has — we’re a much larger, more successful company."

Then why is our pay being cut?

That's the basic question I am struggling with -- if iS is in such a shape that they need to cut royalties so drastically to "sustain", then how can this be a more successful company?  Does not compute.  
PictureLake
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsMember is a Bronze contributor and has 250 - 1,249 Video downloadsExclusive
Posted Fri Sep 10, 2010 4:46PM
If someone mounts a lawsuit, please sitemail me. As others, I was lured here by the promises of grandfathering to the next canister level. I don't know if we stand a chance or not, but I would be interested in finding out. Though I've been involved in a lawsuit before, and they are not fun or fast.
retroimages
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a contributor and has less than 250 Video 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 Illustrator
Posted Fri Sep 10, 2010 4:46PM
You are so big and successful, you need a bigger cut of our small percentage. I must be thick Kelly because I still don't get it.
vid64
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsMember is a Gold contributor and has 10,000 - 24,999 Illustration downloadsExclusiveExclusive iStockphoto Illustrator
Posted Fri Sep 10, 2010 4:47PM
I'm not on, or even likely to ever be on a 40% rate. Why will I drop from 35% to 25% in the new year? The new system stinks and the fact the you can't see that scares me to hell.
lostinbids
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsMember is a contributor and has less than 250 Video downloadsExclusiveExclusive iStockphoto VideographerThis member chickened out of their last cage challenge. What, are you scared of a little photoshop challenge?
Posted Fri Sep 10, 2010 4:47PM
Posted By PictureLake:
If someone mounts a lawsuit, please sitemail me. As others, I was lured here by the promises of grandfathering to the next canister level. I don't know if we stand a chance or not, but I would be interested in finding out. Though I've been involved in a lawsuit before, and they are not fun or fast.

Or cheap
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