03 Apr 2008 Peek Inside the Financials of iStockphoto
As part of the ownership shuffle at parent Getty Images, iStockphoto has provided some information to the public on their financial performance. iStockphoto earned $72 million in 2007 (up from $22 million in 2006) and contributors were paid $20.9 million. There’s a lot of encouragement for microstock contributors in this information and a lot to be learned by the competition.
The first information to come to light was in an SEC filing which didn’t slip past eagle-eye Daryl Lang at PDN. He wrote an insightful article about the figures concluding that “If counted separately from Getty Images, iStockphoto would probably be the world’s third-largest stock agency this year.” The few die hard detractors who still maintain that microstock is an insignificant portion of the stock photography market may now have more difficulty making a convincing case.
Getty Images are projecting iStockphoto earnings will reach $122 million in 2008 and continue growing to $262 million by 2012. Interestingly, they project the proportion of iStockphoto’s earnings for all Getty Images business will go from 14% in 2008 to 22% in 2012.
The second gem of information to come out was the $20.9 million paid to contributors in 2007, listed by iStockphoto boss Bruce Livingstone on the iStockphoto front page and discussed in the forums. It’s created quite a buzz and with good reason. This information allows a lot of conclusions to be drawn about iStockphoto’s success and that of their contributors.
One such conclusion is the proportion of sales from exclusive contributors as discussed at Microstock Group. With $20.9 million in payouts from $72 million in earnings that’s an average payout of 29%, assuming the earnings is almost entirely from image sales. Non-exclusive contributors earn 20% and exclusive contributors earn between 20% and 40%, so the 29% average implies the majority of sales are of exclusive content. No great surprise there, but it confirms what was previously only speculation.
Of course the 29% figure has elicited the usual calls for the contributor commission to be raised, countered by the usual citations of staff, infrastructure and marketing expenses. Other microstock agencies who attract contributors with generous commission at 50% and above must envy the ability to buy new business. It’s obviously working for iStockphoto who seemingly have no trouble attracting contributors with a 20% commission.
Revealing financial information always has some negative effects. In this case gold-level exclusive contributors at iStockphoto may be reassessing the appeal of contributing directly to Getty Images while Getty’s microstock business is growing faster than their macrostock business. Regardless of the commissions at Getty, with the lions share of $21 million they’re probably not missing much.