Wednesday, September 15, 2010

iStock Contributor Changes

iStock announced last week changes to their contributor royalty percentage break downs.  I did not immediately post this as I was waiting to see what kind of reaction would come out of their heavy users.  I myself have small sales numbers at iStock, so any changes are considered minor for me personally.  After this announcement though several of their big exclusive contributors have announced they will be leaving iStock as its a slap in the face to their earnings.  iStock how ever states that this will increase earning on several accounts.  I am no math expert, but starting at ground zero every year vs a built up over time does not seem it will have a increase in earnings.  This all takes place on January 2011 and your 2011 credit number will be set as of a few days ago.  Here is a link to take you to the percentage breakdown.  They are also adding another category like Vetta.  See the full write up below.

We are adding a new premium content collection: The Agency Collection. It will be a premium product priced above Vetta. It will include content from external agencies as well as selected iStock contributors. We are also making changes to Vetta including how it is priced, the royalties associated and how the collection is sold within the Getty Images family.

New Royalty Levels
Effective January 2011
Royalty rates will no longer be associated to your lifetime download totals, represented by the canister icons. Canisters will now be separate from royalty rates and continue to reflect total lifetime downloads (but they will no longer indicate royalty rates).

iStock will now set royalty levels annually. The levels are set based on overall iStock credit usage from the previous year. Beginning in January 2011, all iStock contributors will qualify for their royalty level based on the total number of credits used by customers to download a contributor’s files in 2010 – these will be referred to as Redeemed Credits. There will be different royalty levels set for each file type.

The royalty rate level you start with beginning in January 2011 will depend on the total number of Redeemed Credits from January 1, 2010 to December 31, 2010. As with the current system, over the course of 2011, you will continue to graduate to higher royalty levels as you meet the targets.

• Each iStock credit used on your files equals 1 Redeemed Credit
• Your initial royalty rate for 2011 will be determined by the total number of Redeemed Credits you get in 2010 – those are the numbers we’re posting today
• January 11, 2011 we will post new targets. These targets will affect your royalty growth for 2011 and set your initial royalty rate for 2012.
• Your minimum royalty rate will not decrease throughout the year. You are guaranteed this royalty rate for the entire year with the possibility to go up levels as you meet additional targets
• Redeemed credits do not pass from one year to another
• You will retain the royalty rate from the end of the previous year

This new structure addresses a number of often asked for items:
• Because royalty targets are now based on the number of credits used and not the number of individual downloads, you will accumulate Redeemed Credits on extended licenses as well
• Now a Vetta download doesn't have the same value as a dollar bin download, and a small file isn't the same as an XXL one. If a file sells for 50 credits, that's the value you'll receive
• Your royalty percentage will be private--this information will not be publicly available unless you wish to share it
• The new structure is more fair to talented artists just arriving at iStock, yet takes nothing away from active long-timers who represent a critical element of the iStock community

We have added a field in the Stats tab of contributor’s profile pages that shows the total number of Credits Redeemed for both 2009 and 2010 to date (up to September 1), as well as the target levels.

The 2011 royalty targets are posted

For non-exclusive contributors the royalties will range from 15 to 20% for content sold on iStock.

For Exclusive contributors, we are happy to announce there will be a new top royalty level of 45%. The range will now be: 25, 30, 35, 40, 45%.

Non-exclusive contributing artists will still qualify for Exclusive status based on their total lifetime downloads. Just to be clear – everyone who is currently Exclusive will remain that way. No one will be dropped from Exclusivity and Non-exclusive artists are still eligible for exclusivity after 500 downloads or early exclusivity at 250 downloads with a 50% approval rate.

We will continue to pay out royalties based on the value of the credit purchased. In the case of royalties from Subscription credits we are adjusting the minimum value of the subscription credit from $0.95 to $0.65. This is still the highest minimum subscription payout in the industry. We are also removing the 10 percent bonus on Extended License royalties for Exclusive contributors.