What Is Midstock?

Posted on 10/4/2013 by Jim Pickerell | Printable Version | Comments (2)

Getty Images is finally declaring iStock a “Midstock” brand given how high they have pushed the prices of iStock’s exclusive imagery. I estimate that about 35% of the images on iStock are exclusive. Getty has told debt investors that 70% of iStock revenue is generated from exclusive images and that the gross revenue for the last 4 quarters was about $300 million. In Q2 2013 iStock revenue was down 9% compared to the revenue in Q2 2012.

Based on my analysis of the downloads of 192 of iStock’s leading contributors with a combined total of almost 33 million total download (about 20% of iStock’s total downloads since its founding), I believe that iStock had about 10 million total downloads in 2012. Based on first half results downloads for 2013 should be about the same as last year. Downloads are down from about 25 million in 2009 and 2010.

Demand For High Priced Exclusive Images

It is helpful to get some idea of how many exclusive images are actually being purchased by customers. It is unclear whether the 70% of revenue for exclusive was based on the prices before the “1/2 Our Imagery Is Now 1/2 The Price” promotion, but I will assume it was before.

The price of a credit ranges between $1.40 and $1.67 depending on the size of the package purchased. For the purposes of my calculation I will use an average price of $1.50 for each credit.
    Non-Exclusive images range in price from 4 to 18 credits or $6 to $27
    Exclusive images range in price from 5 to 28 credits or $7.50 to $42

    Exclusive+ imges range in price from 10 to 55 credits or $15 to $82.50
    Vetta images range in price from 35 to 160 credits or $52.50 to $240.00
It is interesting to note that Midstock images are often higher priced than Premium images purchased on Gettyimages.com. And on gettyimages.com the customer is not limited to 500,000 impressions before paying an additional “Extended License” fee.

Recently, I was able to analyze the sales figures of several of the major RF contributors to Gettyimages.com. In 2007 when Getty was a public company the average price of an RF license was about $240. In the sales of the collections I reviewed the average price per-image-licensed in 2008 was $219. In 2012 the average price pre-license had dropped to $126. (Images had been added to the collections during the period.) This wouldn’t have been so bad if there were more sales, but in fact only about one-third as many images were licensed in 2012 as in 2008. In addition, 25% of the licenses were for prices under $25. Is the Midstock model sustainable when Getty’s Premium images are being licensed at these prices?

The large file sizes on each of these iStock brands are priced as follows:
    Non-exclusive    - $15.00
    Exclusive               $25.50
    Exclusive+             $60.00
    Vetta                    $112.50
If 70% of iStock revenue is from images that are “Only from iStock” that means that about $90 million is from the licensing of Non-exclusive images and about $210 million from the three higher priced categories combined.

Assuming 10,000,000 downloads, if we divide $90 million by a $15 average price per image we get 6 million downloads of non-exclusive images. If we assume a $60 average price for the various exclusive collections we get 3.5 million downloads of exclusive images. The $60 price may be a little high because relatively few customers may be purchasing Vetta images at their higher prices, or on the whole customers may be purchasing smaller file sizes. We also have to take into account that a portion of that $210 million in revenue comes from the purchase of Extended Licenses. That, or a higher average price in general, could mean that there are fewer exclusive downloads.

Non-exclusive Revenue

If iStock licenses the same number of non-exclusive images in the second half of 2013 as they did in the first half their revenue from non-exclusive images will be cut to $45 million since non-exclusive images are being licensed at half price. It is hard to believe they will license as many non-exclusive images since those images now appear so much lower in the search return order.

That would mean that in order for Getty’s Midstock revenue to grow they will have to license a lot more of their higher priced images. But, are there really more customers that are willing to pay that much?

Copyright © 2013 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 www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


  • Jason Han Posted Oct 7, 2013

  • Christopher Futcher Posted Oct 23, 2013
    In September my average sale based on my 40% royalties was $31.85 which made my cut $12.74. That's with over a couple thousand downloads so the site average is probably pretty close to that.

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