Basic Math At Getty

Posted on 3/2/2017 by Jim Pickerell | Printable Version | Comments (0)

Getty’s ESP system for supplying information about their sales to iStock contributors certainly offers much more information than was previously available. Unfortunately, this information may point to an overpayments problem. It all revolves around cancelled sales.
 
Contributors will recall that about three years ago Getty overpaid everyone and it took them about 3 months to discover their mistake. Over the next 6 months they deducted what they had overpaid from each photographer’s account. It looks like they are about to do the same thing again. Evidently they didn’t learn from their earlier experience.

Cancelled Sales




For some photographers there are a huge number of cancelled sales. The reports I have examined include one record of the original transaction and a second record that deducts the amount of the original transaction (usually the two transactions took place on the same day). The deduction transaction reports a royalty of zero.

In fact, instead of zero ($0.0) what they should have done was also deduct the amount of the royalty attached to the original sale.

For example:



Sales Date Sale Region Product Type Purchase License Fee Royalty Royalty
      From Site in USD Percent in USD
18-Dec-16 US SALES Premium Access Time Limited Getty -222.00 0 0.00
18-Dec-16 US SALES Premium Access Time Limited Getty 222.00 0.15 33.30
14-Dec-16 NON US SALES Premium Access Time Limited Getty -25.04 0 0.00
14-Dec-16 NON US SALES Premium Access Time Limited Getty 25.04 0.15 3.76
             
        0.00   37.06

In each of these pairs of transactions the “Asset Number” is the same. When these columns are totaled the end result is that the “License Fee” zeros out, but the “Royalty” to be paid to the contributor remains. The end result is that contributors are being paid a royalty, even when the sale has been cancelled.

In theory the cancelled sale could represent cancellation of a sale from a previous month that is not included on the report. The positive sale could represent a totally different new sale of the “same image” for the “same license fee” that happened on the “same day” as the cancelled sale. I doubt this is the case, but that still doesn’t account for the fact that there was no royalty deduction for that previously cancelled sale.



If this only happened occasionally it might not be a big deal, but for some contributors 32% of all the transactions are cancellations. This means that another 32% of the positive numbers represent transactions that had been cancelled. Thus, only 36% of total transactions reported actually generate some real revenue. (At the bottom of this story I have included a chart with a more extensive list of cancelled transactions.)

In the records I examined the royalty rate, when reported, was always 15%. There was no royalty rate indicated on the Partner Pro or the Thinkstock sales. However, if we divide the gross license fee for all transactions into the royalty paid for all transactions the royalty is 28%. When we divide the gross license fee by the total number of iStock transactions the royalty paid is 15%. With Thinkstock, we are not provided with a gross license fee but when we divide the total number of transactions into the royalty paid the royalty rate works out to 30%.

Revenue Sources


iStock contributors receive income from 7 sources. They are:
    iStock Credit Packs
    iStock Subscriptions
    Getty licensing Premium Access Time Limited
    Getty licensing Single Image RF
    Getty Partner Portal RF sales
    Thinkstock Image Packs
    Thinkstock Subscriptions
However, of all the transactions I examined 53% involved cancelled sales. To make this clearer, assume there were 1,000 transactions. 265 of them were transactions that were later cancelled (in most cases the same day) and 265 additional transactions were records of the first transaction that was being cancelled. Thus, there were only 470 transactions out of 1,000 that actually generated revenue.

All of the iStock transactions where customers used either credits or had an iStock subscription actually generated revenue. There were no reported cancellations of any of these transactions.

However, when we get to the transactions Getty is responsible for, the picture is very different.
See chart.

  Percent Percent Total Balance
  Total Transactions Of Good
  Transactions Cancelled Transactions
iStock Credit Packs 7.9% 0.0% 100.0%
iStock Subscriptions 18.2% 0.0% 100.0%
Getty licensing Premium Access Time Limited 12.8% 29.7% 40.5%
Getty licensing Single Image RF 0.5% 37.9% 24.1%
Getty Partner Portal RF sales 13.6% 13.6% 31.8%
Thinkstock Image Packs 3.5% 33.8% 32.3%
Thinkstock Subscriptions 43.6% 30.9% 38.1%

It is unclear why the system Getty has been operating for years has so many cancelled transactions on the same day the sale was made. It is particularly, hard to explain why there are so many cancelled transactions of an image download (and a report of $0 royalty) from Thinkstock subscription when there are no such cancellations from any of the iStock subscriptions.

One would think that a customer either has a subscription or she doesn’t. Supposedly, every time the customer downloads an image that transaction is recorded and a royalty of $0.28 is paid the contributor. There doesn’t seem to be any way to cancel the fact that a particular image was downloaded, but there are a huge percentage of transactions where zero royalty was paid. If we total all the transactions and divide them into the total royalty paid the average royalty is about $0.19 per download.

What kind of deals do they have with the Partner Portals that allow them to cancel 55% of the sales they make? One would think that most of the foreign partner portals would only report sales to Getty once they are actually completed -- particularly considering that the cancellation usually occurs on the same day as the sale is made. Do these portals somehow get credit for the number of transactions generated, regardless regardless of whether they produce any revenue or not?  In this case these extra transactions are actually costing Getty money. They are paying out a royalty on the positive side and not deducting anything when the transaction is cancelled.

Again why are such a high percentage of sales cancelled? What happens to cause a reported subscription download to be cancelled? One would hope that Getty will explain to contributors a little more about how Premium Access and Partner Pro sales work. 

Sales
Sale
Product Type Purchase License
Royalty
Date Region
  From Site Fee in USD in USD
2-Dec-16 US SALES Premium Access Time Limited Getty -222.00 0.00
2-Dec-16 US SALES Premium Access Time Limited Getty 222.00 33.30
1-Dec-16 NON US SALES Premium Access Time Limited Getty -16.01 0.00
1-Dec-16 NON US SALES Premium Access Time Limited Getty 16.01 2.40
1-Dec-16 US SALES Premium Access Time Limited Getty -3.20 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 3.20 0.48
1-Dec-16 US SALES Premium Access Time Limited Getty -4.10 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 4.10 0.62
1-Dec-16 US SALES Premium Access Time Limited Getty -3.24 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 3.24 0.49
1-Dec-16 US SALES Premium Access Time Limited Getty 3.24 0.49
1-Dec-16 US SALES Premium Access Time Limited Getty -3.24 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty -3.24 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 3.24 0.49
1-Dec-16 US SALES Premium Access Time Limited Getty 3.24 0.49
1-Dec-16 US SALES Premium Access Time Limited Getty -3.24 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 1.72 0.26
1-Dec-16 US SALES Premium Access Time Limited Getty -1.72 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 3.10 0.47
1-Dec-16 US SALES Premium Access Time Limited Getty -3.10 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty -6.00 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 6.00 0.90
1-Dec-16 US SALES Premium Access Time Limited Getty -2.30 0.00
1-Dec-16 US SALES Premium Access Time Limited Getty 2.30 0.35
1-Dec-16 US SALES Premium Access Time Limited Getty 3.40 0.51
1-Dec-16 US SALES Premium Access Time Limited Getty -3.40 0.00
6-Dec-16 US SALES Premium Access Time Limited Getty 1.93 0.29
6-Dec-16 US SALES Premium Access Time Limited Getty -1.93 0.00
9-Dec-16 US SALES Premium Access Time Limited Getty 3.24 0.49
9-Dec-16 US SALES Premium Access Time Limited Getty -3.24 0.00
2-Dec-16 US SALES Premium Access Time Limited Getty 3.53 0.53
2-Dec-16 US SALES Premium Access Time Limited Getty -3.53 0.00
2-Dec-16 US SALES Premium Access Time Limited Getty 3.24 0.49
2-Dec-16 US SALES Premium Access Time Limited Getty -3.24 0.00
2-Dec-16 US SALES Premium Access Time Limited Getty 4.10 0.62
2-Dec-16 US SALES Premium Access Time Limited Getty -4.10 0.00
2-Dec-16 US SALES Premium Access Time Limited Getty -3.15 0.00
2-Dec-16 US SALES Premium Access Time Limited Getty 3.15 0.47
6-Dec-16 US SALES Premium Access Time Limited Getty 4.10 0.62
6-Dec-16 US SALES Premium Access Time Limited Getty -4.10 0.00
3-Dec-16 US SALES Premium Access Time Limited Getty 2.80 0.42
3-Dec-16 US SALES Premium Access Time Limited Getty -2.80 0.00
3-Dec-16 US SALES Premium Access Time Limited Getty 2.80 0.42
3-Dec-16 US SALES Premium Access Time Limited Getty -2.80 0.00
3-Dec-16 US SALES Premium Access Time Limited Getty -11.40 0.00
3-Dec-16 US SALES Premium Access Time Limited Getty 11.40 1.71
5-Dec-16 US SALES Premium Access Time Limited Getty 4.40 0.66
5-Dec-16 US SALES Premium Access Time Limited Getty -4.40 0.00
5-Dec-16 NON US SALES Premium Access Time Limited Getty 3.25 0.49
5-Dec-16 NON US SALES Premium Access Time Limited Getty -3.25 0.00
6-Dec-16 NON US SALES Premium Access Time Limited Getty 2.65 0.40
6-Dec-16 NON US SALES Premium Access Time Limited Getty -2.65 0.00
29-Dec-16 NON US SALES Premium Access Time Limited Getty -3.08 0.00
29-Dec-16 NON US SALES Premium Access Time Limited Getty 3.08 0.46
11-Dec-16 NON US SALES Premium Access Time Limited Getty -4.32 0.00
11-Dec-16 NON US SALES Premium Access Time Limited Getty 4.32 0.65
12-Dec-16 NON US SALES Premium Access Time Limited Getty -4.65 0.00
12-Dec-16 NON US SALES Premium Access Time Limited Getty 4.65 0.70
13-Dec-16 NON US SALES Premium Access Time Limited Getty 4.87 0.73
13-Dec-16 NON US SALES Premium Access Time Limited Getty -4.87 0.00
13-Dec-16 NON US SALES Premium Access Time Limited Getty -5.02 0.00
13-Dec-16 NON US SALES Premium Access Time Limited Getty 5.02 0.75
15-Dec-16 NON US SALES Premium Access Time Limited Getty -5.83 0.00
15-Dec-16 NON US SALES Premium Access Time Limited Getty 5.83 0.87
18-Dec-16 NON US SALES Premium Access Time Limited Getty -6.13 0.00
18-Dec-16 NON US SALES Premium Access Time Limited Getty 6.13 0.92
22-Dec-16 NON US SALES Premium Access Time Limited Getty -3.59 0.00
22-Dec-16 NON US SALES Premium Access Time Limited Getty 3.59 0.54
5-Dec-16 US SALES RF Image Getty 300.00 45.00
5-Dec-16 US SALES RF Image Getty -300.00 0.00
8-Dec-16 US SALES RF Image Getty -575.00 0.00
8-Dec-16 US SALES RF Image Getty 575.00 86.25
26-Dec-16 US SALES RF Image Getty 40.00 6.00
26-Dec-16 US SALES RF Image Getty -40.00 0.00
22-Dec-16 US SALES RF Image Getty 300.00 45.00
22-Dec-16 US SALES RF Image Getty -300.00 0.00
31-Dec-16 US SALES RF Image Getty 29.00 4.35
31-Dec-16 US SALES RF Image Getty -29.00 0.00
8-Dec-16 NON US SALES RF Image Getty -122.53 0.00
8-Dec-16 NON US SALES RF Image Getty 122.53 18.38
15-Dec-16 NON US SALES RF Image Getty 116.20 17.43
15-Dec-16 NON US SALES RF Image Getty -116.20 0.00
20-Dec-16 NON US SALES RF Image Getty 212.15 31.82
20-Dec-16 NON US SALES RF Image Getty -212.15 0.00
21-Dec-16 NON US SALES RF Image Getty 225.36 33.80
21-Dec-16 NON US SALES RF Image Getty -225.36 0.00
22-Dec-16 NON US SALES RF Image Getty 158.45 23.77
22-Dec-16 NON US SALES RF Image Getty -158.45 0.00
19-Dec-16 NON US SALES RF Image Thinkstock 3.32 0.50
19-Dec-16 NON US SALES RF Image Thinkstock -3.32 0.00
19-Dec-16 NON US SALES RF Image Thinkstock 3.32 0.50
19-Dec-16 NON US SALES RF Image Thinkstock -3.32 0.00
5-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   1.60
5-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   0.00
14-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   0.00
14-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   1.60
14-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   0.00
14-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   1.60
15-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   0.00
15-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   1.60
16-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   0.00
16-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   1.60
19-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   0.00
19-Dec-16 US SALES Thinkstock Image Pack 100 Thinkstock   1.60
13-Dec-16 US SALES Thinkstock Image Pack 1000 Thinkstock   0.00
13-Dec-16 US SALES Thinkstock Image Pack 1000 Thinkstock   0.80
6-Dec-16 US SALES Thinkstock Image Pack 25 Thinkstock   1.83
6-Dec-16 US SALES Thinkstock Image Pack 25 Thinkstock   0.00
12-Dec-16 US SALES Thinkstock Image Pack 25 Thinkstock   0.00
12-Dec-16 US SALES Thinkstock Image Pack 25 Thinkstock   1.83
21-Dec-16 US SALES Thinkstock Image Pack 25 Thinkstock   1.83
21-Dec-16 US SALES Thinkstock Image Pack 25 Thinkstock   0.00
8-Dec-16 NON US SALES Thinkstock Image Pack 25 Thinkstock   0.00
8-Dec-16 NON US SALES Thinkstock Image Pack 25 Thinkstock   1.83
20-Dec-16 NON US SALES RF Image Partner Portal -1.25 0.00
20-Dec-16 NON US SALES RF Image Partner Portal 1.25 0.19
14-Dec-16 NON US SALES RF Image Partner Portal -0.18 0.00
14-Dec-16 NON US SALES RF Image Partner Portal 0.18 0.03
14-Dec-16 US SALES RF Image Partner Portal -2.34 0.00
14-Dec-16 US SALES RF Image Partner Portal 2.34 0.35
20-Dec-16 NON US SALES RF Image Partner Portal -1.25 0.00
20-Dec-16 NON US SALES RF Image Partner Portal 1.25 0.19
14-Dec-16 NON US SALES RF Image Partner Portal -0.26 0.00
14-Dec-16 NON US SALES RF Image Partner Portal 0.26 0.04
15-Dec-16 NON US SALES RF Image Partner Portal -0.26 0.00
15-Dec-16 NON US SALES RF Image Partner Portal 0.26 0.04
14-Dec-16 NON US SALES RF Image Partner Portal -0.26 0.00
14-Dec-16 NON US SALES RF Image Partner Portal 0.26 0.04
           
        0.00 385.82

Copyright © 2017 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.  

Comments

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