An
iStock Exclusive photographer asked, “Given that Getty is ‘racing to the bottom’ and is about to eliminate Rights Managed from its collection, do you think our Exclusive contracts will be next?
I don’t think so. It seems to me that it will still be to
Getty’s advantage to keep the Exclusive segment of iStock.
The big difference between iStock Exclusive and Getty RM is that the iStock images are still RF. Customers can use any Exclusive image for anything they want - as long as they want. From Getty’s point of view, the prices are higher for the Exclusive images so there is a chance for them to make a little more money from some of the licenses.
Based on past reports there are indications that iStock licenses about the same number of Exclusive images as Non-exclusive one, but customers pay 3 times the price for the Exclusive ones. I don’t think Getty can afford to lose that extra revenue on top of what they will be losing by discontinuing RM.
A bigger question is whether they will integrate all iStock into Getty and convert the iStock subscription sales to Premium Access sales. it looks like Getty intends to fully
integrate iStock into the Getty site and offer everything to Premium Access customers. For several years they have been selling a lot of iStock images through Premium Access. If they give all the iStock subscription customers Premium Access deals it will result in a further decline in revenue for all iStock contributors.
Currently, iStock Exclusive contributors receive revenue from 4 different sources – Credit Packs, Single RF sales, Subscription and Premium Access. Based on the data I have been able to collect from some iStock Exclusive contributors it looks like their Images Licensed and Revenue Percentages break out as follows:
| |
Percent |
Percent Images
|
| |
Revenue |
Licensed |
| Credit Pack |
31% |
10% |
| Single Image RF |
13% |
5% |
| iStock Subscription |
38% |
50% |
| Premium Access |
18% |
35% |
Contributors earn a higher average royalty percentage for Subscription sales made through iStock than when their images are licensed to the Getty customers as part of Premium Access deals.
The Credit Pack and Single Image RF represent only about
15% of the number of images licensed, but generate about 44% of all royalties. Subscription sales generate
50% of images licenses and another
38% of royalties. Thus,
65% images licensed represent
82% of royalties.
But another
35% of images licenses are sold through Premium Access deals and these sales only generate
18% of royalties. The average Premium Access sale generates only about 2/3rds as much in royalty as a Subscription sale and only about 10% of a Credit Pack sale.
If the high volume of Subscription sales drops to Premium Access prices it will be a severe impact on the total royalties earned by Exclusive iStock contributors. It will be even worse for the Non-exclusive iStock contributors because they don’t get the extra benefit of higher prices for Credit Packs and Single Image licenses that go to the Exclusive contributors.
I think at least 70% of the images Getty licenses are to customers with Premium Access deals. With those deals customers pay a flat monthly fee and can use as many images as they want. All images are priced equally regardless of the collection they come from. The price-per-image-used is based entirely on the total number of images the customer downloads in the month divided into the monthly fee they pay.
If Getty does decide to totally integrate iStock it seems likely they will go to the best iStock customers and say, “Hey, now you are part of Getty Images. We offer Premium Access deals. If you pay us a flat monthly fee, you can use as many images as you want from any of our collections. This includes images found in the iStock Exclusive collection, the non-exclusive collection, Getty Creative, Getty Editorial or Getty Footage. It makes no difference. Choose whatever you want.”
Getty’s Premium Access subscriptions are different from (and worse) than all the other microstock subscription plans. With other microstock subscriptions there is always a fixed bottom line price. That number may be very low, but there is always a limit on the number or images you can download for a fixed price. With Premium Access there seems to be no limit and sometimes the royalty share can be as low at $0.01.
Take
Shutterstock for example. A customer can get 750 images for $199 per month (or $0.27 per image if they actually download 750, but at least the is a limit. Of course, very few, if any customers who purchase these plans actually download as many as they are allowed.
With Getty’s plan there is no limit and that is why you get $0.01 sales. The volume of sales can never make up for the low prices. It is a terribly stupid strategy, but in over a decade of operating PA they have not been able to see this flaw.