Rate Schedule/What does NET mean?

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cobalt
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Posted Fri Dec 14, 2012 1:35AM

I don´t understand this idea about "hedging costs of 20%". Seriuosly, what kind of deal are you getting?


The contributors deserve the correct percentage from what the customer actually paid.


I have encouraged many contributors to shoot localized content only to discover now that you are underpaying us for content sold in Euros. The difference can be up to 4 royalty percent, that is a huge amount of money.


So now I suggest that people shoot for the US market because only then will they receive their full percentage.


I would also like to have a full definition of "net" and the appropriate change of ASA. I really don´t see how "spending a month working on this" would be a problem. This is a business, not a hobby art gallery and we need to know precisely how our royalties are calculated.


Deciding not to give us a proper definition is being interpreted as another "smoke screen" to lower our income because you assume, we "silly little artists" are to stupid to use a calculator and thus the agency can happily help themselves to another part of our income.


I would also like to know if you use the same defintion of "net" on the other getty agencies, where we receive only 20%.


This would mean that on getty or thinkstock we are only getting 17% or 18%.


Why should we shoot localized content for such little returns?
georgeclerk
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Posted Fri Dec 14, 2012 1:41AM

I think it's a balancing act between all the extra money they are making from this skim (on one hand), and the reputational damage, customer mistrust, contributor mistrust and legal risk of losing a lot of money (on the other hand).


Apparently inflating the prices and keeping all of the lucrative extra proceeds is the more attractive option just now.
mbbirdy
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Posted Fri Dec 14, 2012 1:43AM

Posted By benedek:
It would be fairly easy to implement a foreign currency conversion payment for contributors with an exchange rate changed daily, as paypal does for example. Paypal also deducts the conversion fee which is no more than 3%. Why is Istock not doing the same?


 

(Edited on 2012-12-11 19:23:06 by benedek)



Exactly!!!
lostinbids
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Posted Fri Dec 14, 2012 4:22AM

I did get a straight(ish) answer regarding Net vs Gross over in the refunds thread

Posted By iStockLawyer:


Posted By lostinbids:

Posted By iStockLawyer:
^^ There is no refund budget. The amount that is refunded is removed from the revenue on which you are paid royalties.

(Edited on 2012-12-12 15:00:43 by iStockLawyer)



Then why did you include refunds of a part of the deductions from gross payment to net price in the other thread? 


Is this what happens?


A customer buys a file for $10 in credit equivilant (gross figure), the net is then calculated bringing it down to $8.50 (estimate based on what we have seen), I get my 35% royalty on that of $2.97 (I am guessing you keep the half cent too). Then the customer says he wants a refund, you take back the $2.97 off me, and give the customer back his credits.



Yes.
georgeclerk
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Posted Fri Dec 14, 2012 5:27AM
Honestly, iStock - this issue would have been a perfect opportunity to show that the company does want to foster a better relationship between iStock and contributors.

That would have involved an element of give and take.  But now we can clearly see that there's no real change, it's just more take and take.

Just the usual misleading half-truths and slippery language.  'Currency hedging' give us a break.  Currency hedging is about reducing the risk of losing money through exchange rate fluctuations.  What we see here is all about creating extra profits by significantly inflating prices and keeping 100% of the difference.  Is that really an honest or ethical way to do business?

There are established accounting standards for the management of foreign exchange risk, as detailed in the below links.
http://en.wikipedia.org/wiki/Foreign_exchange_hedge
http://en.wikipedia.org/wiki/Foreign_exchange_risk

Why are iStockphoto not following any standard, established accounting practises here?  Reckon I could guess why they're not.

Does iStock actually want to try to rebuild trust between contributors and iStockphoto?

(Edited on 2012-12-14 06:10:09 by georgeclerk)
4FR
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Posted Mon Dec 17, 2012 1:58PM

I wasn't expecting an answer to all our facts and questions. Since it is quite obvious that istock has used the term NET and HEDGE to simply make money. Its nothing more than the hidden currency conversion costs of credit cards which charge 3-6% - but istock taking up to 20% is fraud. If istock wants our trust back it is time to admit you guys did something wrong here and think of a fair compensation instead of taking us for fools!


This really upsets me since I have been long enough in the finance business and know exactly how hedging works and there is simply no reason for istock to hedge especially not with OUR money !!!
secablue
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Posted Mon Dec 17, 2012 3:40PM
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Posted By 4FR:

This really upsets me since I have been long enough in the finance business and know exactly how hedging works and there is simply no reason for istock to hedge especially not with OUR money !!!



I agree! I have worked in enough business that delt in multiple foreign currencies to know that we as contributors should not be absorbing the Hedging costs. And Net including Bad Debt and Refunds?... I am sorry but this a bit of a joke. Refunds are already taken back from us, and Bad debts are bad debts, and are written off. If you take 75% of my income and not be able to cover these costs, there is something very wrong with your Business model.
Imgorthand
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Posted Tue Dec 18, 2012 12:55AM
Can we please resume the discussion here? There are clearly more explanations needed for us to uderstand.
Starkblast
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Posted Tue Dec 18, 2012 1:09AM
Posted By 4FR:

I wasn't expecting an answer to all our facts and questions. Since it is quite obvious that istock has used the term NET and HEDGE to simply make money. Its nothing more than the hidden currency conversion costs of credit cards which charge 3-6% - but istock taking up to 20% is fraud. If istock wants our trust back it is time to admit you guys did something wrong here and think of a fair compensation instead of taking us for fools!


This really upsets me since I have been long enough in the finance business and know exactly how hedging works and there is simply no reason for istock to hedge especially not with OUR money !!!



Posted By secablue:

I agree! I have worked in enough business that delt in multiple foreign currencies to know that we as contributors should not be absorbing the Hedging costs. And Net including Bad Debt and Refunds?... I am sorry but this a bit of a joke. Refunds are already taken back from us, and Bad debts are bad debts, and are written off. If you take 75% of my income and not be able to cover these costs, there is something very wrong with your Business model.

Istocklawyer, could you please comment on these posts?
benedek
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Posted Tue Dec 18, 2012 7:43AM
Posted By secablue:
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Posted By 4FR:

This really upsets me since I have been long enough in the finance business and know exactly how hedging works and there is simply no reason for istock to hedge especially not with OUR money !!!




I agree! I have worked in enough business that delt in multiple foreign currencies to know that we as contributors should not be absorbing the Hedging costs. And Net including Bad Debt and Refunds?... I am sorry but this a bit of a joke. Refunds are already taken back from us, and Bad debts are bad debts, and are written off. If you take 75% of my income and not be able to cover these costs, there is something very wrong with your Business model.


Istocklawyer already said that the bad debt and the Refunds are not included in the foreign currency transaction "fee". They are taken off of your Istock balance whenever you have bad debt or a refund happens. Now I am just clarifying what was said. I still don't agree with the ridiculous foreign transaction scheme.
Starkblast
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Posted Tue Dec 18, 2012 9:45AM
Istocklawyer already said that the bad debt and the Refunds are not included in the foreign currency transaction "fee". They are taken off of your Istock balance whenever you have bad debt or a refund happens. Now I am just clarifying what was said. I still don't agree with the ridiculous foreign transaction scheme.

That still leaves the question unanswered why currency conversion costs are so ridiculously high AND at our own expense..
akurtz
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Posted Tue Dec 18, 2012 4:19PM

** unless a lawsuit ensues.


 


Yeah, like anyone would take on the Carlyle Group,Pifff
aprott
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Posted Wed Dec 19, 2012 1:25AM

Well it seems like "hedging" in iStock speak means taking the risk themselves for a premium of 20% - and in addition cashing in the upside...


You can think for yourself how you would name this...
secablue
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Posted Wed Dec 19, 2012 9:44AM
Posted By benedek:

Posted By secablue:
/
/

Posted By 4FR:

This really upsets me since I have been long enough in the finance business and know exactly how hedging works and there is simply no reason for istock to hedge especially not with OUR money !!!





I agree! I have worked in enough business that delt in multiple foreign currencies to know that we as contributors should not be absorbing the Hedging costs. And Net including Bad Debt and Refunds?... I am sorry but this a bit of a joke. Refunds are already taken back from us, and Bad debts are bad debts, and are written off. If you take 75% of my income and not be able to cover these costs, there is something very wrong with your Business model.



Istocklawyer already said that the bad debt and the Refunds are not included in the foreign currency transaction "fee". They are taken off of your Istock balance whenever you have bad debt or a refund happens.


but that is not 'NET' then... a refund for a file is a refund... and a bad debt is when an account is not paid... how 'bad Debt' can be somehow calculated into a NET payment, is beyond me.   Does iStock NOT always charge accounts in advance when Customers purchase a credit package?  And if there is a misuse of CC for either a Credit package or Cash sale, this would fall into a CC Fraud and not 'bad debt'?  


I REALLY want this clarified... please.


In my direct experience with multiple 'Middle Man' businesses... where we were acting as an Agent for an International suppler, taking a commission to on-sell their product... if we experienced a bad debt from one of our clients, we NEVER could go back to the supplyer asking for our money back.   Account default was handled by debt collectors, and if not successful, written off as an operational cost.  Any CC fraud was handled by the Bank.   Of course I am not naive, and understand that iStock business clients are much more difficult to track and 'fight' for the money, but again, this should never become a cost of the suppler.   Legit refunds (unused file and mistaken purchase) of course are legit refunds.
4FR
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Posted Sun Dec 23, 2012 3:34AM

We all know there is NO reasonable answer why istock is taking up to 20% on currency conversion nor why they need to hedge at all. They have used this "hidden" option to make money in the past and are now trying to spinn around the terms to make it sound legit. Its OK to screw up once a while, but then istock should really have the Respect and Greatness to stand up for it instead of trying to take us for fools.


Merry X-Mas !
Imgorthand
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Posted Thu Jan 3, 2013 12:10AM

We would like to kindly ask for continued discussion on this matter in the new year.
Leontura
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Posted Tue Jan 8, 2013 5:18AM
Posted By Imgorthand:

We would like to kindly ask for continued discussion on this matter in the new year.

I think a lot of people would agree with this.
lostinbids
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Posted Tue Jan 8, 2013 6:07AM

I think the real question a lot of us asking is,


"Why are these general costs of doing business being taken of our share?"


Why cant some of my expenses be taken out of the total sale price too? Seems only fair.
Leontura
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Posted Wed Jan 9, 2013 2:10PM
Posted By lostinbids:

I think the real question a lot of us asking is,

"Why are these general costs of doing business being taken of our share?

Yes, it doesn't sound legal to me. In iStockLawyer's professional opinion, are general business costs, including things like hedging, usually charged when we use the term "net"?

(Edited on 2013-01-09 14:24:25 by Leontura)
4FR
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Posted Sat Jan 12, 2013 1:18AM

So no answer means istock is going to continue with the fraud to take up to 20% in 2013 on currency conversion !!!
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