Rate Schedule/What does NET mean?

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nullplus
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Posted Wed Dec 12, 2012 2:48AM
thanks for the clarification. i'm personally fine with how things are handled and also agree that development (and all other) resources should be used for more important things.
TadejZupancic
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Posted Wed Dec 12, 2012 3:02AM

I have no problem in setting higher prices for other currencies, but we should be then also paid more. As it is currently it only screams greed. You get from 55-85% of the royalty, isn't that enough. It was always advertised that we get a percentage of what the customer has paid and not a percentage of a lower price, which iStock could set as they wished.


Let's say thay the overprice for other currencies is 15% (I think they charge even more). In that case an image, that costs $1, costs $1.15 for a foreign customer. If the royalty was calculated as it should have been, then the split between iStock and contributor would be:


iStock  contributor  royalty rate
0.98    0.17          15%
0.63    0.52          45%


And here it is what it looks like it is now:


iStock  contributor  royalty rate   real royalty rate
1         0.15          15%             13%
0.7      0.45          45%             39%


If we compare the royalties between how it is and how it should have been, iStock currently gets 2-11% more money and contributors 13% less. That is by assuming 15% overpricing (it's more in reality).
Imgorthand
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Posted Wed Dec 12, 2012 3:25AM

Thank you for the info but I have more questions:


Why istock contributors can't be paid royalty percent of what customer paid to download the picture? Whether it's lower then USD price or higher.


Can you give examples of countries with prices that are lower that in USD?


What percentage of foreign sales are made in countries with lower value than USD?


 
RapidEye
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Posted Wed Dec 12, 2012 6:57AM
You win as much as you lose on currency movements, don't you?
Starkblast
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Posted Wed Dec 12, 2012 7:19AM
/
/Exactly, and a "safe margin" of 10 to 20% is ridiculous, unless you live in Zimbabwe..


BTW, thanks for your post.

(Edited on 2012-12-12 07:21:18 by Starkblast)
benedek
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Posted Wed Dec 12, 2012 8:11AM
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Posted By MichaelJay:

Posted By jlmatt:
Thank you for the additional information. My concern lies in how convoluted everything seems to be. Am I missing something? Exchange rates calculated monthly? As stated above, calculating those rates more frequently should be easy to implement and much more efficient - unless that's of no benefit to istock, of course.



If you go back in time, the exchange rates were calculated on a daily basis before 2008. This was driving customers nuts because they made an offer today to their clients and came back tomorrow to download the image just to see the price has changed. From a business perspective I can tell you "reliability in pricing" is an important factor. A certain number of iStock customers is using "other people's money" to license images - either their clients' or their company's money. And they need to ask for approval somewhere, so they want to be sure that they can make the purchase with the amount they've been asking for. 


If I had a say in this, I would set the exchange rates once or twice a year only, even with the risk of falling below the USD pricing every now and then in between.

If buyers like the set price for a month or more that's fine with us I guess. What I was asking is why our payment (for contributors) from foreign currency purchases is not calculated on a daily exchange rate with no more than 3% exchange fee. It's not an unreasonable request. As it is, as you can see from the example above, we are loosing more than 15%. 
fototrav
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Posted Wed Dec 12, 2012 8:32AM

Covering your currency risk by hedging is a management decision, which is fine, but i don't see why this cost (which is btw ridiculously high) is getting into the calcultation of the contributors' royalties. 


I am not living in a USD country and, looking at the time of the day my sales appears, I have close to no sales from the US since you changed the BM with localised search, so I don't see why I should be double-penalised of living in a non-USD country with no US buyers!
tirc83
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Posted Wed Dec 12, 2012 9:23AM
Istocklawyer? Is that supposed to imply that you are a lawyer? Sorry - I just don't buy it. Why do I get a picture in my mind of the Wizard of Oz behind a curtain? I though Rebecca said the BS was going to stop.
CHBD
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Posted Wed Dec 12, 2012 9:48AM
Posted By tirc83:
Istocklawyer? Is that supposed to imply that you are a lawyer? Sorry - I just don't buy it. Why do I get a picture in my mind of the Wizard of Oz behind a curtain? I though Rebecca said the BS was going to stop.


 How do you know that Rebecca is who is she claiming to be and not Lobo just trying to ease things out and exploring new possibilities of communication, you swallowed that one, so why not just go along with this one
jjneff
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Posted Wed Dec 12, 2012 9:59AM
Lets not be rude to iStockLawyer, concers are one thing and hopefully wil be addressed.
fotoVoyager
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Posted Wed Dec 12, 2012 10:04AM

Posted By Starkblast:
Exactly, and a "safe margin" of 10 to 20% is ridiculous, unless you live in Zimbabwe..


It's the size of the 'hedging' I object to. It just looks like yet more royalty gouging from whoever makes the number decisions round here.

It's not reasonable and should be reduced.
GavinD
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Posted Wed Dec 12, 2012 10:19AM
Hedge all you like - all we ask is that we get the percentage of what the customs pays less a reasonable fee for the forex transaction. Currently it's massively weighted in iStock's favour at our loss.
georgeclerk
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Posted Wed Dec 12, 2012 10:41AM
Posted By GavinD:
Hedge all you like - all we ask is that we get the percentage of what the customs pays less a reasonable fee for the forex transaction. Currently it's massively weighted in iStock's favour at our loss.


Exactly.

Providing a stable monthly price to buyers is one thing.  But using currency conversion as a smokescreen for an extra, very lucrative revenue stream is not reasonable, and is certainly not ethical.

Sorry if this sounds cynical, but it just seems a little too convenient that iStock finds the 'best' way to do this involves charging customers a significantly inflated price, but then not passing it on to artists.

Very tidy, but hardly what we have agreed to.
wolv
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Posted Wed Dec 12, 2012 10:53AM

Posted By tirc83:
Istocklawyer? Is that supposed to imply that you are a lawyer? Sorry - I just don't buy it. Why do I get a picture in my mind of the Wizard of Oz behind a curtain? I though Rebecca said the BS was going to stop.


How do we know that you are actually tirc83 ?
nkbimages
Member is a Silver contributor and has 2,500 - 9,999 Photo downloadsExclusive
Posted Wed Dec 12, 2012 11:09AM
You should be paying us a straight 30% (or whatever % a contribuor makes) from what the file sold for.  All the other things mentioned (refunds, tax, etc.) are your cost of doing business.  Those are your expenses which should be covered under the 70%+ that you make from each sale.
HeliRy
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Posted Wed Dec 12, 2012 11:11AM
On the flip side, imagine what would happen if IS forecast the monthly figures too low and they lost money as a result. We all know exactly where they would pull the difference from.... our accounts.

The conversion scale is high, but I see it as a case of "damned if you do, damned if you don't."
Starkblast
Member is a Bronze contributor and has 250 - 2,499 Photo downloadsExclusive
Posted Wed Dec 12, 2012 11:25AM
Posted By fotoVoyager:


Posted By Starkblast:
Exactly, and a "safe margin" of 10 to 20% is ridiculous, unless you live in Zimbabwe..



It's the size of the 'hedging' I object to. It just looks like yet more royalty gouging from whoever makes the number decisions round here.

It's not reasonable and should be reduced.


Compare USD to EUR for the last couple of years: worst case scenarios happened three or four times in five years with rate changes of give or take 8% per month maximum! (but always bouncing back with the same speed, which is a positive scenario!) Normal rate changes would be just two or three percent. Put on top of that a generous exchange fee of say 3% and one could argue that a fair hedging percentage including fees comes at around 8%.


Next to that, I would consider this a business calculated risk, not a contributor's calculated risk.
Feverstockphoto
Member is a Bronze contributor and has 250 - 2,499 Photo downloadsExclusive
Posted Wed Dec 12, 2012 12:52PM
Posted By nkbimages:
You should be paying us a straight 30% (or whatever % a contribuor makes) from what the file sold for.  All the other things mentioned (refunds, tax, etc.) are your cost of doing business.  Those are your expenses which should be covered under the 70%+ that you make from each sale.

Spot on, we shouldn't need to deal with this stuff.
4FR
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Posted Fri Dec 14, 2012 1:16AM

Working as a currency trader for the Deutsche Bank for over 3 years and having set up many hedging plans I can't believe this.


Every company or even private person can hedge themselves against currency fluctuations at costs which are below 0,1% -> See Oanda.com


Fact is that istock has almost been taking 20% for their "hedging" !!!


Besides that there is NO need to hedge for istock. Istock is an agency and simply should pass on the % they have promised us.


EG: Customer buys Images for 100 Euro - istock converts them on Day X at that days market rate into $ an pays us the %.


There is simply NO reason why istock needs to hedge. You are willing to contact me any time even via phone if you need help on setting this up.


Just don't try to take us as fools!
Imgorthand
Member is a Gold contributor and has 10,000 - 24,999 Photo downloadsExclusive
Posted Fri Dec 14, 2012 1:26AM
Please, can we kindly ask istocklawyer to come back to this thread?
This thread has been locked.
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