Microstock Unsustainable According To iStockphoto

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A recent announcement by the COO of iStockphoto that pay cuts were in order for their contributors because, “as a business model, it’s simply unsustainable“was met with a hailstorm of anger from their contributors on the forms (here). You can read an excellent write-up on the whole ordeal at Jeremy Nicholl’s, The Russian Photos Blog. It’s not really a topic I’m interested in, but what really caught my eye was the bit of schadenfreude pro photographers must be feeling about the whole deal, indicated by this post in the iStockphoto forum:

“All of you have been so happy to undercut traditional stock photography, copying the best selling images, shooting every hamburger you ever ate, and now that the traditional photographers (often derided as ‘trads’ by you) have come in to beat you at your own game, you’re shocked- yes, shocked!- to find out that this is a business, not a little happy family giving each other muffins and logrolling in the forums. Well, welcome to the real world- the one that you made for yourselves. 145 pages of whining and wanting things to go back to the way they were- it’s so pitiful. Face it. You aren’t going anywhere. You are going to stay here, and do what the man says. You are getting the bed you made yourselves, so go lie in it. Or go back to what you do best- arguing over the color of your little ribbons.”

Trying to be the cheapest is a miserable business to be in.

istockanger

Thx for the tip John.

There Are 59 Comments On This Article.

  1. I had to cut and paste your final thought so I never forget it:
    Trying to be the cheapest is a miserable business to be in.
    The kind of quote I would like to add as an email signature but will just keep it in my mind instead.

  2. OMG! This is just outstanding!

    It’s a pity that the photo community could never bind together for a common good for all … so seeing just desserts just makes me smile a little.

  3. I wonder, does it ever get old being bitter and out of touch? Anyone who things that the stock industry should have stopped evolving with the traditional model is foolish, and anyone who thinks they’ve got it set for life with the current microstock model is equally foolish.

    The market will continue to evolve and consolidate, and the bottom line is you have to be a great photographer to make it…lots of folks just aren’t. Which leaves them plenty of time to write melodramatic and bitter posts about the good old days, when all you had to do was know an editor at one of the big houses and you could make oodles of money in a closed market. Who would have thought they’d invent the internet and digital cameras? competition’s a b*tch huh?

    • @pathetic, with istockphoto going bust (and it’s not if they go bust, rather when they go bust) I would agree that business is a cold-hearted b*tch with a 14-inch strap-on, and all the microstockers are on the receiving end.

      and if your idea of evolution is that the percentage for the photographer goes even further down from the 15% of $1, than the best of luck to you selling at those rates. you’ll probably cover your basic expenses for this year sometime before you die of old-age.

      but it’s not about the money anyway, is it?

    • @pathetic, the ironic part about it is that those ‘photographers’ have bent over to get ****** over all those years, receiving cents when they really should have gotten thousands of dollars – AND THEY ONLY REALIZE IT NOW.

      Karma’s a bitch really – I’ve said it all along, I’d rather sell a single photo for $1000 than 1000 photos for $1.

      But hey….

  4. Yep, And that quote on “Trying to be the cheapest is a miserable business to be in.” pretty much sums up America, Walmart and Off-shoring. I love it. Thank you so much for this.

  5. LOL. Let the change roll on!

    I about lost it when I heard the Pro’s comment quoted by Rob. Below is a dialog I had with a gentleman at a restaurant in San Diego a few weeks back.

    “…put that french fry down son…don’t touch your lunch until daddy says he’s done with his photo shoot!” The chastized 5 year old, sat still in his soccer uniform at the booth.

    Out of sheer curiousity, I turned to ask the man what he was doing. He promptly told me he was a professional photographer and Exlcusive Photographer with iStockPhoto.com!

    Tongue in cheek, I shrugged and told him “Don’t forget to take the lens cap off of your EOS 300D.” He snapped around and said, as if I’d just insulted his wife – “Um, it’s a Rebel! Duh!”

    :) Funny S#!^

    Cheers and best of luck to EVERYONE!
    Rick

  6. I haven’t been able to find the exact quote, but I believe you’ve taken istock’s quote out of context. They didn’t say microstock was unsustainable, but that they believe the payout system they had in place was unsustainable. They’ve been in business like 8-10 years now and are still growing in sales.

    They have however miscalculated the impact these changes are having on their photographers. These latest changes are a huge kick in the teeth and many won’t put up with it – including the customers.

    • @planetMitch,

      I fixed the link on the quote. It now goes here:

      “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.”

      “Last year we proposed changes to canister levels designed to stave off, but ultimately not solve, this problem. In the end, we chose to scrap those. The royalty changes we released yesterday are not a band-aid solution, they are a permanent fix. They ensure a viable, long-term future for iStock and its community.”

  7. …errr at least if you take quotes out of context ;). Like Mitch said, that quote was simply refering to the royalty structure.

    As long as you’re quoting people, I wonder if you stumbled across Jonathan Klein’s press release last October? Not sure how much you keep up with the stock industry these days, but he’s the CEO of Getty Images. Which also owns that little “crap” (as you call it) stock agency called iStockphoto, which according to Klein is “the fastest growing part of our business. It is expected to hit $200 million in revenue this year [2009] – that is growth of more than 35 percent.
    [...]Traditional creative stills (RM and RF) is becoming a smaller part of our business. Our customers use more imagery online, which means more volume, but at a lower price.”

    Doesn’t appear as though Mr. Klein thinks it’s “unsustainable”…

    • @iStock is going down,
      true, i forced my opinion on the quote. corrected above, but i believe it is a harbinger for things to come. they are engaged in a race to the bottom with cost cutting and lower prices forcing artificial growth. not long before everything getty owns is converted monthly subscription.

      • @A Photo Editor, thanks for the reply, and making that correction :). I hardly see it as race to the bottom. Rather we’ve entered an era in which the stock photo industry is experiencing price consolidation. While you are right about “cost cutting”, prices are not going down. On the contrary, part of the iStock press release quoted spoke of the rise in prices for the Vetta collection (which in my exprience outsells any of my RM imagery with Getty) as well as the introduction of a new higher priced “Agency” collection. Prices on the low end will continue to rise (see Vetta and Agency), while prices on the higher end continue to drop ($49 web Res image pricing on Getty). Perhaps you’re right that they’ll end up meeting under the umbrella of a subscription system. However, stock photography is roughly a 2 billion dollar industry. And it will only continue to grow. As long as you can create exceptional photographs and recognize that it is an evolving and volatile market there is a good living to be made.

  8. Before Getty acquired istock, its revenue was in excess of 800 million. My guess is that its revenue is nowhere near that now.Growth in the istock brand means little if it is at the expense of the rest of the business.

      • @Jen, the numbers were public while getty was on the market. then they aquired istockphoto, stock price went down a gazillion percent and were bought for peanuts. which is a neat little irony all on it’s own.

        John Harrington over at http://photobusinessforum.blogspot.com/ has been following it closely all the way trough, so you should search his older posts to get more in-depth information.

      • @Jen, Getty’s revenue was over 800 million, not istocks. Sorry about that, English is my second language. My English grammar sucks. Borna’s comment is correct, except that I don’t consider $2.4 billion, peanuts. John Harrington is an excellence source, as is Jim Pickerell, when it comes to the history of the stock photo business.

        • @Chris, “in a transaction valued at approximately $2.4 billion, including the assumption of existing debt” – the second part of the sentence being the key.

          but anyways, when talking about big corporations, absolute numbers are meaningless. getty was listed at nearly $100 per share at it’s peak, after they bought istock they plummeted to $21.80 and were sold for $34.

  9. I’m not sure much is going to change. The iStockers are going to defend the company (even if it is against their own interests) and continue to ridicule anyone older than 30 who once made a living a rights managed sales. A small portion of iStock shooters make a good living. It’s unlikely that will change. But it looks like a vast majority of iStock shooters will probably realize they have little chance of making money using this model.

    Essentially, I personally don’t care one way or the other. I managed my own stock for years and never really cared or paid attention to what others do/did. I do think iStock has in some ways become a cult-like entity for its members and I do think that’s bad for the industry and the photographers both involved with iStock and not.

    • @Scott Bourne, I think your thoughts on the subject personally are the healthiest. Not every venture for the craft has the effect of improving it.

  10. Anyone interested in “professional” imagery takes all of this with a grain of salt. Photography sold as a commodity is just that. When there is money to pay for good work, none of this will matter.

    Livebooks, as classy as they started now offers reduced rates for students and educators along with their “partnerships”: Blurb, WordPress, Agency Access, etc. Follow the formula to your future!

    This business has always been about standing out from the pack. Let them wail and gnash their teeth about their fifteen cents on the dollar. Original quality content will ultimately prevail.

    Disclaimer: I have no issue with Livebooks, Blurb, WordPress or Agency Access. All great companies trying to make a living just like us.

  11. Wow a large company that survives solely on contributors turning around and shafting those same contributors, who would have guessed.

    Once everyone gets their “the world is ending” and “I told you so” rants out of their system I think this is overall a good thing. While there will always people willing to sell everything for nothing in an attempt to achieve personal fame, this has hopefully taught many good and up and coming photographers that their work is actually worth something and that maybe they should think harder about where their work is going.

    It will be interesting to see if this drives the stock industry to further separate into professional and amateur sections.

  12. I always thought the stock photo thing would blow up some day. Photography is a commodity many people can now produce “good” usable work. It’s just not photographers creating images. So you have a glut of images. Yes you have millions of outlets for images(work) but millions of these outlets don’t pay. We consume images today and always are looking for new. Everybody is out there cutting everyones legs off. There is always the guy who does it or sells it for less.
    So stock photography great in the 80’s, sucks now.

  13. I’ve shot stock full time for 20+ years. I remember when Rf was the pimp on the street and would never survive by offering images at such low prices. Today, many RF images are licensed for a higher fee than RM.

    But we are missing the bottom line in this debate: Getty doesn’t give a rat’s ass about its contributors, it has a legal obligation to its shareholders and no one else. They will do what they are legally compelled to do – make money for their shareholders. iStock, and its peers, will always have contributors because they simply survive on photographer vanity.

  14. scott Rex Ely

    Schadenfreude, is that not the greatest word?
    It goes perfectly with the image of Nelson saying “Haaa, Haaa. . .

  15. I don’t do stock sales, now, or back in the “good ol’ days”.

    I would say that the reports of microstock’s death are being greatly exaggerated. All they’re doing is adjusting a pay scale.

    And, I find it incomprehensible that so many are so bitter that someone found an un-exploited market. Like it or not, a market exists for mediocre photography. So what?
    If you used to be in the business of selling excellent photography to people who really wanted “pretty good” photography, get over it.
    If you used to be in the business of selling mediocre photography for inflated rates, shame on you.

    Bottom line is, if iStock is able to take away your clients, then YOU have the problem. Might not be your fault, but for gosh sakes — things change!!

    • @Scott Hargis,
      Scott you are a typical Microstock apologist , wonder how long it is going to take for reality to sink in.

      • @Terence,
        Which part of “I don’t do stock sales” didn’t you understand? The part where I said “I don’t do them now”, or the part where I said “I didn’t do them back in the good old days?”

        If you want to label me, call me a free market capitalist. I have this radical idea that people should be allowed to buy the products that they want. If you want to sell Ferrari’s, then good for you. But to whine and cry and wring your hands because a large percentage of the population is perfectly happy with a Ford Fiesta is just irrational.

        I’d have more sympathy for you if photo buyers were being forced to purchase microstock against their will, or if there were some sort of law against producing fine work and charging a high rate for it. But I’m pretty sure neither of those things is the case. Am I wrong?

        So my question to you is, which reality should be sinking in? I don’t give a rat’s ass whether iStock stays in business or not. Either way, the old model of stock sales is gone. THAT’S reality, pal.

        • @Scott Hargis,

          Scott, your point is quite valid and certainly with merit.

          As noted above, I have shot professionally for 20+ years and stock was my only source of income. Yes, I made a really good living for about 10 years and don’t apologize for that. I also knew that my days were numbered because traditional prices were inflated; we all rmember the days when a sales report came in when one image was licensed for $15K plus!

          However, what does chuff me with the whole micro-stock issue is the designers and advertising agencies who use micro stock. They will purchase the image for $10 in credits and then re-issue that image to clients at traditional RM fees. There are many design agencies who have libraries oif images built for this very purpose. But, as you allude, can’t blame em, but it sure does chuff me.

          Point being, these rediculously low prices are not being transferred to the end using client.

        • @Scott Hargis, there is one small, but pretty important difference to be made here. ford fiesta is a profitable car. when they calculate the material costs, the R&D, the workers and so on, they set a price that is profitable for them.

          your average microstocker doesn’t even have an idea what his costs are and what his sales should be to make his venture profitable. people who live from photography do. and that’s why 99% pro photogs won’t do microstock. other 1% are Yuri Arcurs with a production studio the size of a football field who produces thousands of targeted, perfectly keyworded and profitable images a month. the rest of the people there are just selling to make any money, far under their costs.

          in any other industry, those prices (price under the cost of production) would be considered dumping and a company doing that would be hit with a penalty that makes their revenue look like pocket change. the only problem here is that there is no company to hit, rather a million of people who all do the same thing.

  16. Your title is wrong IMO.
    “Microstock Unsustainable According To iStockphoto”

    I take what istock “owners” stated as:
    Our current commission structure must change in order for us,
    not you, to continue experiencing accelerating profits.

  17. These comments sound a lot like the whining and complaining on iStock’s forums right now, so I’ll offer up a microstock insider’s view. This announcement is an adjustment to the royalty structure that rewards those that are the best and submit a lot of work. Most of the contributors who are hurt by the change are either photographers who aren’t really all that good at producing stock, or have not been producing much recently (within the last year). Those people will be dropping from 40% to 35% or 30%, depending on their sales from the previous year. This is still quite a bit higher than the whopping 20% we get from Getty RF ;)
    As far as pricing goes, traditional prices are going down and micros are going up, that’s been happening for several years. And even iStock today has various collections and licences that sell in the hundreds of dollars range.
    And by the way, there are hundreds of microstock photogs now who make at least 6 figure incomes, and they’re not all big production houses like yuri.

    • @Steve D., The trend is changing and I see already customers coming back to original creative RM images and not willing to pay even 1$ for guys copying the best selling images.
      Cheap Photographers Only Kill Themselves, Not The Industry.If you don’t value your images who will….????
      Time will show you …..

      • @john, it’s good to hear sales are picking up for you in RM. I think that there will always be customers that need RM licensed images, and are willing to pay a premium for them.
        “If you don’t value your images…” – I value my images, I simply sell them through the RF avenue that is selling. I’ll take $1000 over $0 any day, regardless of how many sales it takes to produce that $1000. It seems that that’s akin to saying Target doesn’t value their products because their prices are lower.

  18. He didn’t say MICROSTOCK was unsustainable, just the royalty structure. Way to show some 3rd grade reading comprehension.

  19. I have mixed feelings about it. I shoot a lot of family stuff with the same approach to my pro work – if I upload it to micro stock and I may $5 yay. But shooting micro just for the sake of shooting micro for $5 – not worth the time.