If contributor attitudes as expressed on web forums are any indication iStockphoto is headed downhill fast. Most of the discussion seems to be taking place on the
iStock official forum and at
Microstock Group. In this article I’ll try to examine the issues and summarize some of the points being made by various contributors.
Best Match
The immediate problem stems from an adjustment made back in September to the Best Match search return algorithm. Since then it appears that all sellers have seen a significant drop in sales.
Many contributors report that in test searches using a wide variety of keywords almost all the images that come up in the first 200 or so returns are new images that have zero or less than 10 downloads. How can images that have never sold be the Best Match for customers looking for images? Contributors have also reported that very few, if any of the higher priced images (Vetta, TAC, Exclusive and Exclusive+) show up in the first 200 returns.
Why is 200 an important number when there are thousands of images to choose from in may searche? Customers can review a maximum of 200 thumbnails on a single search page. Mary Foster, Senior Director of Search Strategy for Getty Images, reports that most customers only look at 1 or 2 pages before switching search terms or going somewhere else. Thus, no matter how great the images are, if they are not among those delivered in the first two pages they will never be seen and never sell.
Foster claims Getty is “intentional” about how they order images in the first couple of pages, but don’t worry much after that about the order in which images appear. But she emphasizes that it is difficult to balance the mix of file types, various collections, relevance, and file age.
To contributors File Age (newest first) appears more dominant than it was six months ago. Foster says it isn’t but also acknowledges that they are trying to dial back file dominance. The situation is made worse by the movement of a lot of Flickr images from the Getty web site to iStock. These images become the newest uploaded and then to move ahead of all those from iStock contributors.
Foster also says they have good data on the relevance (how often each image has been delivered and used) when customers use a single search term. But when customers use phrases (2 or more words) determining relevance is much more complicated. Foster claims that most customers search for single words, but contributors point out that there are lots of searches where multiple words are necessary (airconditioner repaidman, mother and child, children in classroom, fruit and vegetables, Hispanic mature woman, Hispanic senior, etc.) Also, iStock encourages customers to use multiple words. So there is a suspicion that a big part of the problem is that they don’t have good relevance information for many searches. The default when they don’t have relevance information is to go to File Age.
On December 7th Rebecca Rockafellar, iStock General Manager, started posting on the forum. In answer to repeated questions from contributors about the Best Match algorithm being broken she said, “We don’t think so, but we haven’t stopped digging into whether it might be.” Later iStock acknowledged that it was broken and fixing it was a top priority. Next they said “It’s very complicated and difficult to get working right.”
Photographers have asked, why iStock can’t go back to the algorithm they were using in the summer which worked much better, but have received no answer.
Proof Is In Results
For image creators the proof that there is a problem is in the results. Sean Locke has the fourth highest number of downloads of anyone on iStock. His portfolio is of the highest quality available on iStock and he has worked steadily to grow and improve it. Yet last month he had fewer than half the number of downloads he had in January 2010. Price increases over the last three years have helped, but even with higher prices his overall revenue has fallen.
Another contributor said, “I had assumed my lack of motivation and the resultant halving of my uploading efforts was to blame for my dropping sales, but it is quite clear from your (Locke’s) chart that no amount of effort on my part would have significantly improved my numbers. You can't sell images to buyers who aren't here to buy them, or to buyers who can't find them buried behind wholly owned Getty content in the searches.”
Stan Rohrer, a contributor to iStock since 2003, with 1435 images and 64,000 total downloads says his revenue is down 70% from what it was in 2010. While acknowledging that his is an older portfolio he feels there is no way for him to build his portfolio fast enough to get back to his former income level.
He is exclusive, but “emotiomally” has decided that iStock is not the place for exclusivity. When asked, he tells other photographers to avoid exclusivity. He says, “my tipping point (where he goes non-exclusive, puts images with other distributors and gets a lower royalty at iStock) is rapidly approaching. Looking at the downloads trend, iStock will likely make my decision for me within the next few months.” He added, “I suspect I represent a significant number of old timer exclusives who helped build iStock. I am very thankful to have enjoyed riding the iStock wave - but it has collapsed.”
Another person reported that since the Best Match change in September he has seen an 85% drop in the number of sales. You'll find many other examples on the forums.
Other Reasons For Contributor Dissatisfaction
The “defining moment” when contributors began to shift from unqualified support of iStock to mistrust occurred on Sept. 8, 2010 when Kelly Thompson, then COO of iStock, announced that in order for iStock’s profits to continue to grow, contributors would have to accept less in royalties. A new royalty system called “Redeemed Credits” (RC) took effect in January 2011.
Thompson should not be blamed for this move as the idea certainly came from the top at Getty Images.
Up until that time contributors, particularly those that have agreed to give their work to iStock exclusively, believed that iStock had their best interests at heart as long as they worked hard and kept supplying new work. When RC went into effect it became clear that was not the case.
Cutting royalty rates had worked for Getty in the past.
Back in 2001 they made the first cut of RM rates. At that time the business had matured; it was hard to find new customers, and existing customers were not buying more images. Thus, the only way to increase profits seemed to be to raise prices and cut the cost of the product (reduce royalties).
While there was carping and complaining when royalties were reduced photographers continued to supply new images because they earned most of their income from stock and had little other choice. Getty was able to grow its business through acquisition, if not organically, and Getty everything continued smoothly.
But, with iStockphoto Getty forgot to take another important factor into account. Many of the iStock Contributors were also Customers. These customer/contributors had worked hard to build iStockphoto, not only by creating product, but by buying product and encouraging their friends to buy from iStock. For most of these customer/contributors the income from selling images was a supplement, not a primary income. They viewed themselves as designers, not primarily image creators.
When these contributors perceived that they were being treated unfairly they had alternatives. So they did three things:
1 – They stopped buying images from iStock and took their business to other suppliers.
2 – They discouraged their designer friends from using iStock and recommended other suppliers.
3 – As royalties began to plateau and then declined they lost all incentive to produce new images and began to focus more on other aspects of their business.
Now each new move Getty makes seems to dig iStock into a deeper hole.
1 – As iStock raises prices many customers turn to other microstock sites that offer better prices.
2 – As Getty brings wholly owned content to iStock and pushes those images in order to give customers something new to look at sales of images belonging to the iStock faithful decrease.
3 – Getty is moving Exclusive+ images from iStock to the Getty site. For the most part these iStock images generate few higher priced sales on Getty, but because of the way they are delivered in the search returns on iStock they make fewer sales than they had in the past, further angering iStock exclusive contributors.
Rebecca Rockafellar, says that in addition to solving the Best Match sorting problem their goals are to improve “site performance” and “improving the site for customers” and market iStockphoto around the world. It is hard to see how any of these other goals are being accomplished.
Want More
If you’ve got a day or so to spend reading posts check out the
iStock thread “Changes in the way we communicate to the iStock community.” It already has 680 posts, many of them very detailed. Be sure to look at “
page=18” where you’ll find some interesting trend graphs from a few leading contributors.
On Microstockgroup check out “
Nippyish note from Rebecca Rockafellar.” There are over 400 posts that have been read more than 8740 times.