Since Beyond Here began in June 2014, many readers have become aware of the opportunity presented by selling their images through microstock sites. Several readers have turned intent into action. They have opened accounts and are building their portfolios.
I have been a contributor to microstock sites since 2008, and an exclusive contributor with iStock since 2010. iStock has made significant changes in September 2014. I covered those developments here:
We are now 2 months since those changes. This post covers my experience and expectations, and I hope it helps your in understanding the changes at iStock and how you can make the most of them.
The Changes – iStock made a series of changes in September 2014. The key ones are outlined below.
- Offering just one payment method – credits. Previously there were multiple ways to pay, now credits is the only way for customers to buy files on iStock. In addition, and this is the key point, there is now a strong pricing incentive for regular buyers to take up a subscription plan. I have seen this pricing strategy in other online photography businesses too. A good example is Adobe making it very cheap now to use Photoshop and Lightroom by paying a monthly fee rather than buying the product outright. The advantage for Adobe, is very steady and predictable cash flows, instead of large ‘lumpy’ one time sales of their products. In addition, monthly subscribers typically are very ‘sticky’ customers who don’t go elsewhere.
- Dividing the collection into 2 tiers. This has effectively simplified the collections and the pricing structures on iStock. This is not universal popular with contributors – but I view it as a step in the right direction by making it easier for image buyers to understand the different collections and price points.
- Implementing one price per file. This is the most controversial change. It effectively means a price decrease for buyers who typically bought the largest sized files, and a price increase for buyers who bought the smallest files.
The Impact for Contributors
I am an exclusive contributor at iStock. For exclusives, the total revenue for each month is made up from 4 sources – ‘normal’ istock sales, extended licence sales, subscription and partner program sales, and sales via the Getty Images.
Normal istock sales and extended licence sales are recorded and credited in real time. Subscription and partner program sales are reported once per month – typically near the beginning of the following month. Getty Images sales are reported once per month – typically near the end of the following month. So effectively, an exclusive contributor will need to wait until nearly the end of November to fully understand October sales.
What has my experience been? September was a fair month. Overall download numbers were good. There was not a noticeable shift between normal downloads and subscriptions. I was fortunate to have several extended licence sales and a strong month for Getty Images downloads.
In October I started to see the impact of the changes. My iStock normal downloads fell by 10% from September and my subscription sales increased by 110% (from a small base). The effect was a significant increase in total downloads, and a small increase in income. (Note, October Getty Images sales have not been reported yet. When these are credited to contributors a full month on month analysis will be possible).
While it is early days, my experience is that the iStock strategy is working. They appear to be focusing on the large volume buyer as outlined in my earlier post and generating increased volume of downloads at a lower average price per download.
The changes have several implications for contributors. The way I see it, to develop your own strategy you will need to consider these issues:
- Increase in subscription sales. iStock seem to be succeeding in attracting high volume buyers through the subscription plans. This will see a strong increase in subscription sales. These are currently reported once per month.
- Decline in normal downloads. For buyers of reasonable volume, the subscription plans are very attractive. This will see an increase in sub sales and a decrease in normal downloads. As normal downloads are reported in real time, contributors will see fewer downloads and revenue being added to their accounts on a daily basis.
- More variable income. iStock income used to be very steady week to week. Because of the shift to sub sales it is likely that contributors incomes will be higher in that week, and lower in other weeks. I’d like to think iStock is considering a way to report sub sales in real time, but that has not been the message from iStock so far. For now, contributors will need to plan for more variable weekly income.
- More challenge in meeting Redeemed Credit (RC) targets. A contributors royalty level currently depends on achieving RC targets. Sub sales do not attract RCs making the step up royalty levels harder. This adds weight to the argument that iStock are going to have to revise the RC system entirely in the next 12 months. iStock have deferred this decision for another year by maintaining current royalty levels for 2015. This is of great value to existing contributors, but not much help to new ones.
- It is going to be tougher to meet exclusivity requirements. To become an exclusive contributor currently requires you to meet a minimum number of ‘normal’ downloads. Once you become exclusive you receive higher royalties. Exclusivity is getting harder to achieve due to the shift to sub sales. My view is that iStock will have to change this criteria if they want to attract contributors to be exclusive.
- Income may decline in the short term. The shift to sub sales is negatively affecting many contributors income at the moment. This is because sub sales generate less income per sale than ‘normal’ iStock downloads. It will take time to attract more larger buyers, and for the volume increase to offset the reduction in earnings per download.
I continue to be optimistic about the long term impact of the changes iStock have made. There is some “change pain” being experienced by contributors at present, and it will take time to adjust to fewer ‘normal’ downloads being reported per day. As for the future – I’d like to see iStock move to real time reporting of sub sales, changes to the RC system, and continued growth in total download numbers.
Thanks for reading ‘understanding the changes at iStock’. I hope this has been useful for you. If you are an iStock contributor, what has been your experience? or concerns?