iStock Rewards Photogs With Punctum Day

Posted on 7/20/2007 by Julia Dudnik Stern | Printable Version | Comments (2)

Kelly Thompson, senior vice president of iStockphoto, found a novel way to thank the company's photographers. On Aug. 19, the day Louis Daguerre's discovery was released to the world in 1839, iStock will introduce the photographic community to a new holiday: Punctum Day's. The name is an homage to French philosopher Roland Barthes, who defined punctum as the profound reaction evoked by an excellent image.

The first Punctum Day will be commemorated by the launch of several "thank you" programs for iStock contributors. These will include eight contests with more than $40,000 in prizes. Plus, several other programs that offer substantial financial rewards for quality of work and exclusivity to iStock. And, on an undisclosed date within the next two months, exclusive contributors will be able to keep 100% of the revenues generated by their images.

Increasing contributor revenue

In an industry segment routinely criticized for low photographer commissions, a contributor appreciation program is likely to meet with skepticism. iStock pays contributors up to 50% on extended licenses, and its exclusive photographers earn 40% of image sales. However, its baseline 20% contributor cut is the lowest in the industry. Newer micro-payment sites have tried to woo contributors with commissions as high as 70%. "The reason why everyone else is increasing their percentages is because they cannot even come close to iStock's sales volume," responds Thompson. "We often hear that our contributors do much better by becoming exclusive to us than through all others combined."

Recent statistics put iStock's registered customer base at over five times the size of its nearest competitors, which won't disclose annual revenues more precisely than "less than $10 million." Getty Images also does not break out iStock's earnings from its revenue reports; but industry analysts - including Selling Stock editor Jim Pickerell - estimate it to be at least a $20 million per year business.

Further, iStock promotes and rewards the higher-commissioned exclusivity. About 40% of its inventory is exclusive, and this number is likely to increase with new programs. First, iStock is allowing exclusive contributors an unlimited number of image uploads during August 18-19. Second, exclusivity eligibility requirement is decreasing to 250 image downloads for contributors with a 50% acceptance rate.

Thompson highlights that the benefits of iStock exclusivity are not only financial. Exclusive contributors get additional perks, ranging from professionally printed business cards to assistance with pursuing inappropriate use of their images.

Awarding quality work

Exclusivity is also favored by the prized contests that open for iStock community vote on July 23. Awards for best image, vector, video and flash file of the year will go to exclusive contributors. Prizes will also be awarded for design of the year and Steel Cage Battle of the Year, a contest based on using images from the Web site. Community voting in these categories will conclude on Punctum Day with a short list of finalists. Later, winners will be chosen by a panel of special guest judges.

Separately, iStock's team of 85 image inspectors will choose the recipients of two $5,000 awards: most improved contributor, who will receive a cash prize, and contributor most deserving of a new camera, who will win a Canon EOS 5D with lenses. The image of the year will also be used in a direct-mail customer promotion.

Moving on up

The recent launch of SnapVillage got many microstock contributors excited about the possibility to move to the premium stock space, though Thompson notes it wasn't an original idea. "When Getty Images acquired us, the company immediately recognized that the quality of work of some of our photographers was every bit as good as Getty's own," he says. For several months, iStock's diamond-level contributors - those with over 25,000 image sales - have had the opportunity to submit five images per month to Getty's Photodisc.

According to Thompson, the program was an unprecedented success. As of September, it will be open to iStock contributors who have more than 10,000 downloads (gold level and above).

Another way in which contributor revenue will grow is a price increase. iStock is raising credit pricing by 10 cents to $1.30. It is also changing the pricing structure for vector and video files. The lowest pricing for video, which Thompson says has been growing rapidly, is going up to $10; the highest price range remains at $50. This is the second time iStock has raised prices since being acquired by Getty Images.

Punctum Day aside, iStockphoto continues to dominate the micro-payment space in much the same way its parent presides over the traditional market. As microstock enters a new age of maturity, iStock is recognizing and responding to the needs of photographers by offering new ways to increase their earnings.

Copyright © 2007 Julia Dudnik Stern. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Comments

Tim Mcguire Posted Jul 20, 2007
(fixed a few typos - reposted)

Jim,

Is there any way to estimate the amount of dilution of industry revenue that $20 million dollars in istock sales might account for? Iâ€™m assuming that all $20 million in annual sales at istock is taking a percentage of volume (number of images licensed)in the industry and diluting the revenue by charging substantially lower licensing fees per image licensed than what RF and RM of the past have been licensed for? Iâ€™m also assuming that some of the istock customers would have licensed RF or RM images had Istock and other micros NOT developed as they have.

Interested in hearing / reading any comments youâ€™d have on this. Thanks.

Tim McGuire
Jim Pickerell Posted Jul 24, 2007
Tim:

There is no good way to estimate how many RF or RM sales are being lost because the customers are buying microstock instead. There are indications that Getty's RF sales in 2006 were declining about 10,000 units a quarter or 40,000 for the year. However, this is hard to confirm because Getty acquired Stockbyte last year and this should have boosted the total number of units sold. If 40,000 units were lost at an average price of $250 that would be $10 million.

Of course Getty might not be the only company losing RF sales as a result of people buying images from iStockphoto so it might be much worse. Also there are indications that iStock only represents about one-quarter to at most one-third of total microstock sales so you have to consider the impact all the other companies might be having as well.

It is interesting, 40,000 sales only represent about four-tenths of one percent of iStock's total sales for the year. Thus, more than 99% of the microstock customers could be new to the industry and have never purchased from traditional sellers and yet that less than 1% can have a major impact on traditional sales. Consider what happens if 2% or 3% of microstock downloads are from people who would formerly have purchased from traditional sources.

Also, as of the first of 2007 Getty has stopped supplying the average price per image licensed in their quarterly review. As a result it will be impossible to calculate the number of images licensed in the future so it will be even harder to determine the trends.

Jim