13 Jul 2012 Why I Removed my Dreamstime Referral Links

Photo by Peter Atkins. Referral link by Fotolia[Dreamstime have responded to this issue. See the update at the bottom of the post]

With the update to image level parameters earlier this year, Dreamstime started calculating royalties based on the value of the transaction ‘after’ referral costs. This means all Dreamstime contributors earn less for sales to buyers who were referred, and even less if they themselves were referred.

I programmed this policy into the royalty calculator I published yesterday so you can see just how much this impacts your royalties.

No other microstock agency pretends that their referral program is a cost to be shared with contributors.   It’s a marketing cost, and like all other marketing costs, it’s an expense of the agency, not the contributor.

As a direct result of this policy, I have removed all the referral codes in the links to Dreamstime from my blog.   If you spot any I’ve missed, leave a comment on this post with directions to the link.

By doing this, and publicly sharing that I’m doing so, I hope to achieve 4 things:

Avoid Making Microstockers Earn Less

The entire point of Microstock Diaries is that it helps microstock contributors earn more.   If I don’t achieve that, I have no audience, which means no revenue and no reason to be.

Dreamstime’s new policy means anyone who has clicked on my Dreamstime referral link before registering as a contributor in the past three years is now earning less than they would had they not clicked my referral link. I can’t do anything about them, but I can avoid doing it to more people.

Ensure Confidence in Me and the Links from My Website

If my readers know they might penalize themselves by clicking my referral links, they will obviously avoid doing so.   And that would be pretty drastic for me.

So by removing the referral code from my Dreamstime links I can declare that there’s no disadvantage to using any links across Microstock Diaries.   Sharing that I’m doing so also lets my readers know I value their readership and confidence.

To be clear, this is no big personal sacrifice. My Dreamstime referral earnings will not instantly disappear by removing my referral links.   They just won’t grow.   They’ve actually been in constant decline for the past two years anyway, and now represent less than 10% of my top referral income generator.

Discourage Other Microstock Agencies from Doing the Same

Microstock agencies all keep a pretty close eye on each other.   If others see no downside to Dreamstime’s policy, they may implement the same policy themselves.

So by publicly calling out Dreamstime on this policy and demonstrating that it causes both negative publicity and a reduction in inbound links, I can help give other microstock agencies a counterpoint to consider.

Encourage Others to Stop Using Dreamstime’s Referral Program

The day Dreamstime introduced this policy the amount of money they pay out in royalties probably dropped by a good 5%.   That’s going to look very appealing to other agencies considering the same policy.   The only way we can discourage them is to demonstrate a big downside to the policy.   To do that requires more than just one blogger removing referral codes.

So I encourage you to consider removing any affiliate codes from your links to Dreamstime, and let people know about it. Ask the bloggers and forum owners you know to do the same – they probably don’t want to disadvantage their readers any more than I want to disadvantage mine.

If you’re using the Dreamstime Facebook app, consider that while you might earn referral income when your friends click through your links, your royalty will be lower. You could instead use the Facebook app of Shutterstock, Fotolia or Depositphotos, all of whom pay referral fees out of their marketing budget, not your royalties.

[Update 2012-07-15: Dreamstime have responded in the comments below stating that only ‘buyer’ referral costs reduce royalties, in contrast to the policy on their website.]

[Update 2012-07-16: Dreamstime have announced that as of today they will cover 100% of their referral program costs, reversing this policy. The announcement is here, but the policy is yet to be updated. When it is I will restore my Dreamstime referral links.]

[Update 2012-07-19: The policy has been updated and I have restored my referral links]

  • Bob Davies
    Posted at 12:54h, 13 July Reply

    Heya Lee

    Thanks for bringing this to light. I had no idea they’d do this, referrals are of course a marketing expense, NOT a production one. IF they paid a huge royalty rate (like 70-80%) as standard I could understand it, but since they don’t, it’s critical that they change the policy.

    Whilst I can’t commit to remove all my referral links *immediately* (since many of my DT referrals are buyers through my various buyer tools, it’s a nightmare to update all my apps and plugins), I will however give DT a couple of weeks to respond to this (and hopefully reverse the decision), after which point I will begin removing them from my tools (not just their links, but the ability to reach/search them at all) on the next update of each app.

    It’s a shame to hear about this, since I’ve always been very fond of Dreamstime, but such a policy is shameful and I will be joining you in objecting to it 🙂


    • Lee Torrens
      Posted at 12:59h, 13 July Reply

      Bob, that’s a huge commitment, especially removing them from searches and all the tools you have! I’m sure they’ll notice the difference from that. I’m glad to see there’s someone else who puts their customers / readers first.

  • R. Kneschke
    Posted at 13:08h, 13 July Reply

    Fair move. I just removed my Dreamstime affiliate links as well.

  • Sinisa B.
    Posted at 13:47h, 13 July Reply

    Its obvious that many agencies can calculate our ignorance in their “profit desire”!
    We saw Veer-Alamy problem while ago and many before,and now this…

    Thank you Lee for your growing effort (every day) on the first line of contributor’s battlefield!

  • Sifis
    Posted at 04:54h, 14 July Reply

    Thanks for the info.

    Until they change this policy, I am removing links to Dreamstime images and their image search script from my portfolio site.

  • Tyler Olson
    Posted at 04:57h, 14 July Reply

    I wasn’t aware of this either, thanks for brining it to light Lee. The way it works now I have no desire to give a referral link to any of my friends as they’ll earn less on Dreamstime, at my expense.

    I feel your actions are set to do two things though A) Save the photographers from earning less and B) Send Dreamstime a message.

    I think you’ll accomplish A with your changes (removing referral links) but I’m not sure you’ll accomplish B
    If everyone removes their referral links, but keeps their ‘naked’ links to Dreamstime, they’ll still get the traffic, but will save paying out the referral fees. In fact, if both the contributer and buyer were a result of your referral you’re now saving Dreamstime 10% on each sale. Dreamstime is better off if you don’t use a referral link.

    If we really want Dreamstime to see that we don’t approve of this move then we’d have to remove the link all together.

    I think I’m in the same camp as Bob on this one. I’ll give Dreamstime a little time to respond and if they keep their referral program such that it gives a photographer a lower commission for being referred or for referring buyers then I remove the links altogether.

    The thousands of contributers and buyers are a site’s best marketing tool, potentially creating thousands of back links for a site with a good referral program. Some sites are working hard at providing a good, fair referral program which award buyers/contributers for helping them market their business. I can show my appreciation for this by saving my ‘link juice’ for those sites.

    • Lee Torrens
      Posted at 08:04h, 14 July Reply

      Of course you’re 100% correct. By just removing the affiliate code and leaving the link in place, it helps Dreamstime at my expense, though does save potential contributors from being penalized, which was the priority.

      I considered removing links rather than just removing the affiliate code, but while that serves me better, it doesn’t serve my readers better. Dreamstime is still among the top 6 or 7 earning microstock agencies, so it’s better for my readers if they know about it.

      So I’m not entirely sure of the best way forward. I may add a “nofollow” tag to my Dreamstime links as an interim measure, but removing links altogether isn’t the best way to serve my readers. I’ll keep thinking of other ways to get the message across.

  • MicrostockInsider
    Posted at 08:18h, 14 July Reply

    I’ve done the same on microstockinsider. After writing “Now wondering if those togs I’ve referred have gotten a bum deal from clicking on my site” on your last post I don’t think I have much choice: I feel like i’m ripping people off behind their backs.

    I guess the silver lining is that (I hope) after the 3 year referral period is up they will revert back to the full payment.

    For microstockinsider it was easy to swallow the financial loss and be able to hold my head up, I have much more of a dilemma for links on sites for buyers where DT is the exclusive revenue stream.

    • Lee Torrens
      Posted at 11:53h, 14 July Reply

      Yes, that’s a very good point Steve. What can you, and every other Dreamstime partner participating in the affiliate program, do to continue earning revenue without harming contributors’ royalties. I guess changing to another partner is the best option, but I realize that can be a lot of work.

      • Tyler Olson
        Posted at 12:00h, 14 July Reply

        Changing to a another affiliate program may be beneficial anyhow. There are some other referral programs that are a fair bit better than what Dreamstime is currently offering.

  • R. Kneschke
    Posted at 13:42h, 14 July Reply

    As I commented earlier, I removed my affiliate links and wrote a short blog post about it similar to yours here: http://www.alltageinesfotoproduzenten.de/2012/07/14/warum-ich-meine-referal-links-zu-dreamstime-entfernt-habe/

  • Serban Enache
    Posted at 16:42h, 14 July Reply

    Lee, it’s baffling to see such statement being posted without you checking first with us. The referral fee calculated via net price for buyers is a standard approach to most if not all agencies. Dreamstime is actually amongst the last to add this change as far as I know. We can go deeper into whether this is a cost that can be supported or not. I’m sure your blog has costs as well, how o you expense those? However, contributors’ fees remain unaffected. There is no lower royalty earned by them if you referred one. That is a false assumption and something you should’ve checked prior posting this.

    • Lee Torrens
      Posted at 17:50h, 14 July Reply

      Thanks for responding, Serban. Naturally I will be very happy if it’s true that referred photographers don’t earn less, but your website states in black and white that they do. Obviously I didn’t check first because I assumed what is written on your website is accurate and current.

      Here’s the quote from your website:
      “For each transaction, the photographer receives a 25-50 percent Revenue Share, which is calculated based on the net sales amount for the transaction, after referral fees have been paid.”
      On this page: http://www.dreamstime.com/sellimages

      • Serban Enache
        Posted at 18:58h, 14 July Reply

        Yes, that reffers to the fees awarded to the buyer, if he was a referred buyer. Indeed, it doesn’t clearly say that the referred photographer’s fees are unaffected and we will clarify that. It’s rather a thing missed in the q&a, I confirm once again that when you refer a photographer his royalties are equal to the case when he would signup without your referral.

        • Lee Torrens
          Posted at 20:00h, 14 July Reply

          Obviously that needs some drastic clarification on the website, but that’s great news that contributors do not earn less when they’re referred.

          However, you are stating that the contributors’ fees are not affected, but in fact they are if the buyer is referred. So to clarify, a contributors’ royalties are lower if the buyer is referred, but unaffected by the referral status of the contributor themselves.

          I will survey the rest of the market to see who else deducts buyer referral costs from contributors’ royalties. As stated, those I asked so far do not do so.

  • Serban Enache
    Posted at 06:24h, 15 July Reply

    As I said in my emails today, we’ve always been open to suggestions and improvements. Our forums are a clear proof that we take suggestions into consideration and change features anytime this is possible. It’s a shame that you posted these without checking the facts. I cannot stop to notice that you recommend competitor programs in the end of your article. Considering how many efforts they put into competing with our program, it’s not impossible to use any negative opportunity to combat Dreamstime’s referral program. The truth is that we award all recurring purchases for 3 years, something that most of them don’t. So you are not correct by saying you want your readers to earn more, as long as some will earn more from the first purchase(s) but not from the others (most buyers purchase many many times in3 years). Your past feedback to me clearly says how profitable this program was for you. And we both know many competitor programs don’t even award referred contributors. Furthermore, the referral program is mostly about residual income. So by asking people to remove links you are in fact just helping competitors and decreasing readers’ earnings. Most of them earn revenue from several agencies. Removing one source will just lower their revenue.
    And one thing more. Not everyone reads your blog. Giving us feedback would help the entire industry. Posting without checking helps just competitors. Less competitors lead to monopoly and we all know how bad that is.
    Again as I said in my emails to you, we would be keen to see what things people want to improve in our program. There is no such thing as the perfect program but with the community’s help we can improve ours. Giving feedback would be a way more profitable approach for everyone than removing links without even giving us feedback.

    • Lee Torrens
      Posted at 09:34h, 15 July Reply

      Serban, this article is in no way criticizing the parameters of your affiliate program itself. It is criticizing how it impacts contributor royalties.

      I don’t believe it’s reasonable to expect people to make critical suggestions on your forums while your ban policy is so heavy. I politely suggest you need to ban less and explain more. People only complain when they care, so respectfully setting them straight helps both you and them.

      I recommended competitors’ Facebook apps, not their referral programs.

      There is no shortage of competitors who can avoid a monopoly without continually “increasing competitiveness” at the expense of contributors.

      Can I politely suggest that you update your website so it clarifies this situation? It still says that you remove all referral costs from license fees before calculating royalties.

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