26 Jan 2008 iStockphoto Gives Contributors a Bonus
iStockphoto has effectively given all it’s contributors bonus royalties as part of the rollback of their international pricing scheme.
On January 7 iStockphoto implemented a price rise that they’d announced a month earlier. What they hadn’t announced was that customers buying credits in British Pounds or Euro would pay a premium. A small size photo became 1 dollar, 1 pound or 1 euro, despite the differences in the exchange rates of the three countries.
Contributors were happy as the higher priced credits resulted in higher commissions. Buyers in Europe, however, were not happy paying double (in Pounds) or 1.5 times (in Euro) for buying credits with their local currency.
After much debate on the forums, iStockphoto decided to roll back the discriminatory pricing on January 16 . They announced that all customers who’d paid the higher rates would be reimbursed the difference based on the exchange rate at the time of refund. However, contributors were told that they would keep the extra royalties they’d received, effectively creating an agency-funded contributor bonus.
A future change to international pricing hasn’t been ruled out, but iStockphoto CEO Bruce Livingstone apologized for the way it had been introduced this time. He was heavily criticized for implementing a strategy that was perceived as simply charging double in Europe. However, he also received a lot of praise for taking responsibility, setting it straight, and continuing to experiment for the benefit of iStockphoto’s various stakeholders.
Contributors were relieved when iStockphoto announced that there had been no drop in sales from the affected regions during the period of higher prices.