iStock Goes for Subscription Business

Posted on 4/4/2008 by Julia Dudnik Stern | Printable Version | Comments (0)

iStockphoto, which is the third-largest generator of stock-image revenues in the world, has announced plans for a subscription offering. iStock says it is diversifying in response to customer demand.

Currently in private beta, the subscription offering will be substantially different from other available options. Instead of using the number of images as a benchmark for a given time period, iStock plans to use the number of credits, by imposing a daily credit limit.

Most important, this addresses a key contributor complaint about subscription products, which typically pay the same commissions for low- and high-resolution images. At iStock, contributors will be paid a standard royalty percentage for the revenue generated by each image.

In addition, the subscription product will mix different types of stock. Buyers will be able to buy photos, vector illustrations, Flash and video clips. Available to individual and corporate buyers, subscription plans will be sold in three, six and 12-month increments.

Though many microstock leaders have similar products, iStock's entry into the niche is likely to have the highest cannibalizing effect on Shutterstock. The New York-based business founded by Jon Oringer has been the unquestionable leader in the subscription area. Its Web-site traffic and number of image downloads rival iStock and Dreamstime, and microstock photographers often say Shutterstock is their top earner.

The evolution of the micro segment has seen Shutterstock following others with a recent price increase of about 25%. Ranging from a month to a year, subscriptions now start at $249 and top out at $2,559.

iStockphoto is not yet ready to discuss the details, including opting-out from the program or its financials. However, the company indicated that the lowest-priced option will cost $96 for 84 credits per month. The minimal discount is similar to the option of buying credits in bulk. The subscription product will launch in late May.

Copyright © 2008 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


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