iStock To Launch Subscription Service

Posted on 3/4/2014 by Jim Pickerell | Printable Version | Comments (0)

iStock has announced that in April it will launch a subscription product based on the Thinkstock subscription product. The low priced Thinkstock product has been the fastest growing part Getty Images’ business.

Overall, Getty revenue was down again in Q4 2013 for the fifth straight down quarter. The Midstock category that includes iStock, Thinkstock and was down to $288 million for 2013. Their major competitor, Shutterstock, had gross revenue of $235.5 million in 2013 and will surely exceed the revenue of Getty’s Midstock division before the end of 2014.

Comparing the strategies of the two companies is interesting. Shutterstock started out as a subscription company, but the fastest growing parts of the company in terms of revenue generated are “Images on Demand” and Enterprise deals. Image on Demand is single image pricing at much higher fees than subscription and Enterprise involves deals with large customers that mostly result in higher unit prices for the images licensed. Subscription is becoming a smaller and smaller percentage of Shutterstock’s total revenue. But, despite the revenue shifts probably 85% to 90% of the images downloaded are still licensed through subscriptions.

Meanwhile, at iStock Getty has a strong position in the mid-level pricing range of stock photography with its Signature, Signature+ and Vetta collections. Prices range from about $10 to $250 with an average price of somewhere around $60. This segment of their business probably generates 75% of iStock’s total revenue and it is this segment of the market where Shutterstock seems to be growing revenue.

So what has Getty decided to do?

Getty will move some of the higher priced Signature images to the Main collection reducing the cost of acquiring these images on a single-image basis by about two-thirds. They will offer monthly and annual subscriptions at two different price points. The lowest price point will be for access to just the Main collection. The higher priced subscription will allow downloads from the Main, Signature and Signature+ collections. So far the prices for subscriptions have not been announced, but it is expected they will be very competitive with Shutterstock and Thinkstock.

Images in the highest priced Vetta collection will not be available for subscriptions. (Vetta prices are slightly lower, but very competitive with Shutterstock’s Offset collection.)

An interesting feature about the iStock subscriptions is that customers will be “required to use the images they download within the terms of their subscription.” Most other subscription offers allow customers to make unlimited use of the images they download as long as the total distribution is less than 500,000 copies. Customers can get a higher limit by purchasing an Extended License. Obviously, Getty hopes this will give customers an incentive to keep their subscriptions continually in force. Time will tell if that works. It is hard to imagine Getty enforcing this requirement if a customer decides to use an image for more than one month after it was downloaded.?

Getty announced last week that and Thinkstock would be consolidated. One has to wonder if eventually Thinkstock and iStock will be consolidated since both brands will have similar offerings and in many cases the same image.

Already, about 6 million of iStock’s images are on Thinkstock. Now, Thinkstock pricing will be brought to iStock. Does it make much sense to continue to operate the two brands separately? If all the images were licensed through one site it might alleviate some of the accounting problems Getty has been experiencing.

Contributor Reactions

Initial reaction from iStock contributors is very negative, particularly from those who are exclusive. The exclusive contributors agreed to only license their images through iStock in exchange for higher royalty percentages. Now it seems like their royalties will decline. The only hope is that they will make it up through significant additional downloads. Most seem to be skeptical that will happen.

The royalty rates that have been announced are:
    Non-exclusive: All Collections: $0.28/download
    Main (exclusive): $0.34/download
    Signature (exclusive): $0.75/download
    Signature+ (exclusive): $2.50/download
It is hard to see how that will work in the long run. The customer will be paying a flat fee for a subscription. If they buy the higher level subscription they will be able to download as many images from any collection as they want. Effectively, the customer is paying the same price per image regardless of which collection it comes from.

If they download all images from the Main collection Getty makes out, but if all the images they choose are from the Signature+ collection Getty takes a big hit because they have to give up 7 to 9 times more money in royalties than they would have if all the images came from the Main collection.

Assume that a customer has an all collection subscription, but downloads all the images they need from the non-exclusive main collection Getty might be paying out 10% of what they collect in royalties. If that same customer only downloads Signature+ images Getty would payout over 90% of what it collects.

There would be an incentive for Getty to push images from the non-exclusive Main collection to the top of the search return order. But they will want to keep the high priced images at the top of the search return order so their single image buyers can see them first and maybe spend more for the images they will use. This may be another plan that has not been well thought out.

It can't be long before Getty changes the royalty rate to one flat price regardless of which collection the image comes from.

Many exclusive contributors are talking about pulling out of their exclusivity and putting their images on multiple sites, particularly Shutterstock. That seems likely to further reduce the quality of the iStock and lead to a further decline in Getty’s Midstock revenue.

Copyright © 2014 Jim Pickerell. 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

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


Be the first to comment below.

Post Comment

Please log in or create an account to post comments.

Stay Connected

Sign up to receive email notification when new stories are posted.

Follow Us

Free Stuff

Stock Photo Pricing: The Future
In the last two years I have written a lot about stock photo pricing and its downward slide. If you have time over the holidays you may want to review some of these stories as you plan your strategy ...
Read More
Future Of Stock Photography
If you’re a photographer that counts on the licensing of stock images to provide a portion of your annual income the following are a few stories you should read. In the past decade stock photography ...
Read More
Blockchain Stories
The opening session at this year’s CEPIC Congress in Berlin on May 30, 2018 is entitled “Can Blockchain be applied to the Photo Industry?” For those who would like to know more about the existing blo...
Read More
2017 Stories Worth Reviewing
The following are links to some 2017 and early 2018 stories that might be worth reviewing as we move into the new year.
Read More
Stories Related To Stock Photo Pricing
The following are links to stories that deal with stock photo pricing trends. Probably the biggest problem the industry has faced in recent years has been the steady decline in prices for the use of ...
Read More
Stock Photo Prices: The Future
This story is FREE. Feel free to pass it along to anyone interested in licensing their work as stock photography. On October 23rd at the DMLA 2017 Conference in New York there will be a panel discuss...
Read More
Important Stock Photo Industry Issues
Here are links to recent stories that deal with three major issues for the stock photo industry – Revenue Growth Potential, Setting Bottom Line On Pricing and Future Production Sources.
Read More
Recent Stories – Summer 2016
If you’ve been shooting all summer and haven’t had time to keep up with your reading here are links to a few stories you might want to check out as we move into the fall. To begin, be sure to complet...
Read More
Corbis Acquisition by VCG/Getty Images
This story provides links to several stories that relate to the Visual China Group (VCG) acquisition of Corbis and the role Getty Images has been assigned in the transfer of Corbis assets to the Gett...
Read More
Finding The Right Image
Many think search will be solved with better Metadata. While metadata is important, there are limits to how far it can take the customer toward finding the right piece of content. This story provides...
Read More

More from Free Stuff