26 Aug 2015 Depositphotos Raises Prices and Lowers Royalties
Depositphotos has started informing contributors that their recent credit price rises implemented on August 22nd will, from September 1st, be complemented with a 10% cut to royalty rates for credit sales.
Changes In Pricing And Royalties
The emailed notification says the price increase was to bring them in line with market rates, and that the royalty cut was “dictated by the requirements of the market”.
It goes on to state the intention is to make Depositphotos more profitable so they can make further development and that, with contributor support, will help them “retain [their] leading position among other photobanks.”
This means they’re unable to grow, or grow as fast as they’d like, with their current level of profitability.
Where They Stand
Shutterstock’s royalties for ‘On-demand’ purchases range from 20% to 30%.
iStock is 15% – 20% for non-exclusives.
Fotolia provides 20% – 46%, or a flat 33% for Adobe Stock sales.
Depositphotos previously paid 44% – 52%, but now 10% less at 34% – 42%.
While still more generous on percentage terms, they’re not yet making up for it on volume. With only one exception, all the top-selling contributors I spoke to put Depositphotos outside their top five earners.
Depositphotos is still far more generous than the market’s top performing agencies. These changes just mean they’re a little less so.
Being unable to grow with their current prices and royalty rates is consistent with their activity over the past couple of years, which has been much quieter than in previous years.
It’s disappointing that they chose to fund their growth in this way rather than through innovation, but given their position in the market, it’s also a significant risk for them.
If they can’t convert these changes into noticeable growth to keep contributors happy, they could find themselves sliding further down the slippery slope of contributors’ earnings lists, risking one side of the two-sided market they worked so hard to build.