Though unit sales are declining for many iStockphoto sellers, many of the same people are also seeing significant revenue increases. Here’s how.
In early 2010, iStock raised the prices charged for the photos belonging to its exclusive photographers. It is not clear how many images this represents, but according to iStockcharts of the top 1,000 photographers, at least 643 of them are exclusive. All of the top 1,000 have had more than 18,000,000 total downloads on iStock.
In addition, there are another 139 photographers out of that first 1,000 whose names—and whether or not they are exclusive—have not been identified at the photographer’s request. Given that those who are exclusive might be more likely than non-exclusives to request that their sales information not be disclosed, it is reasonable to believe that more than three-quarters of the top 1,000 are exclusive.
A few months ago, iStock created the Exclusive Plus collection, where images are licensed at an even higher price point. Each exclusive photographer is allowed to designate between 10% and 20% of his or her images for placement in the Exclusive Plus collection. The formula for allocation takes into account accepted images and number of sales. The photographer selects the images that will be marketed at this price point. Some who have put their best-selling images into Exclusive Plus are discovering that despite the fact that their number of monthly sales has declined significantly compared to a year earlier, gross revenue has increased to where contributors are earning much more than they were a year ago. The table at left compares pricing of different iStock offerings
| Table. iStockphoto pricing by collection |
| File size |
Image price (credits) |
| Main Collection |
Exclusive |
Exclusive Plus |
Vetta |
| XSmall |
1 |
2 |
5 |
|
| Small |
3 |
5 |
10 |
20 |
| Medium |
6 |
10 |
15 |
30 |
| Large |
10 |
15 |
20 |
40 |
| Xlarge |
15 |
20 |
25 |
50 |
| XXLarge |
20 |
25 |
30 |
60 |
| XXXLarge |
25 |
30 |
35 |
70 |
A recent analysis of 14 months of sales data for 198 top iStock contributors demonstrated that unit sales were declining for many, and that overall number of units licensed was flat to declining slightly from month to month. A few individuals have seen significant drops (see chart), but they may be the ones who are earning the most money.
The higher prices could be doing two things. First, they could be driving some customers to buy more images from the non-exclusive collection. Higher prices could also be driving customers to other microstock sites. Not enough information is available to determine if either of these things is happening.
There are, however, lots of complaints on the iStock blog about the new exclusive prices not working for some. Part of the reason may be that these photographers have only put a few of their images into Exclusive Plus and have focused more on the decline in units licensed.
When everything was in the main collection, the average price per download was between $6.00 and $6.50, not counting the occasional extended license sale that can skew the averages. If a photographer has reached the diamond level (currently more than 25,000 downloads) and receives 40% of gross sales, he would have received $2.40 to $2.60 per download in 2009.
So far in 2010, some photographers are averaging over $4.00 in royalty per download. Some who have made a full commitment to Exclusive Plus are seeing an average sale price (overall for all the images in their collection) of well over $13.00 per download. This puts the royalty for a diamond photographer (those with over 25,000 downloads) in the range of $5.20 per download.
Assume a photographer averaged 2,500 downloads a month in 2009. At $2.40 per download he would have earned $6,000 per month. But suppose, due to the new higher prices, that his sales drop by one-third to 1,650 per month. At $5.20 per download his earnings would be $7,590 per month or over $91,000 per year.
One of the things iStock is discovering is that a significant number of its customers are more than willing to pay more because for them the Exclusive Plus prices are still reasonable. If iStock can manage not to lose too many customers on the low end, the strategy will work for the company. Overall that seems to be happening right now as total number of downloads seems to be stabilized, but are not growing. Contributors will have to decide if they are more interested in a high volume of sales (which may be the proper strategy when trying to reach the diamond level), or in maximizing revenue.