I've just received an e-mail from Clipcanvas.

For us, the past year may be characterised by nice growth during last autumn, with increasing sales and an influx of more great content, while the past months have not been so great. For those of you who have been relying on us for a long time, and given us your support, we are grateful.

We find ourselves in a position where we either have to pack it up or dig in and walk on to our final battles. The main reason for this relates to i) a difficult European market with falling sales, ii) continued but unsuccessful efforts in securing sufficient funding for new development initiatives and growth, and iii) increased costs relating to a growing content base. Video is not inexpensive to handle and this has now drained our resources to the point where we are unable to solve our predicament unless we take some drastic measures. For this, we are sorry. We have been working to get our heads above water for a long time now, and it is quite horrible for us to find ourselves in this position.

Given the current circumstances, we are suggesting to do the following to increase our revenues and reduce our costs:
- reduce the royalty rate paid out to all producers from 50% to 40% for the next 12 months, starting on April 30th;
- allow certain producers with a good track record to publish and manage their own content directly;
- close certain producer accounts that either do not represent content we think makes much sense, or those accounts that contain a lot of very similar/spammy/crowding out type of content, and subsequently delete those clips and portfolios entirely;
- update our main design, user interface and SEO profile to better represent a modern look to attract more general interest and to increase our conversion rates and sales; AND
- integrate automation for payouts so you no longer need to request your payments in order to get paid.

Other and more positive changes will be considered as soon as we feel confident the current and suggested changes are having a positive effect. We still believe we're in it for the long haul, so we're not happy about some of the changes we need to make at this point either.

We do understand that we're completely dependent on your continued support. If we don't have your support, then please walk away now. We have fought for a long time to generate more sales for all of us, and made our processes both leaner and more efficient, but competition is becoming increasingly intense and we're afraid we might topple over if we don't make these unpopular decisions now. We think it would be really sad to see either you or us go, and we hope you feel the same.

The effect of the current and proposed changes will secure our future existence and hopefully establish a platform from where we can build a better and more sustainable marketplace. The alternative is closing down shop or selling out to someone who would probably decide to make those changes anyway...we prefer the first alternative.

We are not pertaining to be idiots and we are not trying to screw you over. We have just ran out of other viable options. While we realise this is most unwelcome just now, or at any time ever probably, but we would still like to suggest that things may look entirely different in 12 months time from now, and hope that you will give us your support one final time. For those of you familiar with running a business, we hope you see the logic in the measures we are taking, understand the position we are in and what we are trying to achieve.

Finally, we believe there is a good space for Clipcanvas in this industry. It makes sense to keep a mix of players around and for them to develop alongside each other. Some perform exceptionally, while others need to work harder to catch up. We hope you believe we should be one of those that perform and deserve to be part of your main outlets, and that you'll consider the real alternative looming, before you decide if life is better without us hanging around. We will work harder, if possible.

Sorry to bring you this news.

Personally I like Clipcanvas and I'll stay with them...

I'm not selling a lot with them, but I think that they deserve our support...

This is the most honest email I've received from an agency in a long time.

Giving the low sales they probably should look into making internal company changes such as faster approval times and evaluate the sales and marketing department.

They have the product but if they can't sell now how does it change if the contributors support them?

Reading through the email again, yes it is honest but what it boils down too is they are taking 10% of my Clipcanvas income because they are unable to attract new clients. 

I was surprised to get this email from ClipCanvas as my sales with them have been growing significantly over the last year and have become a solid monthly earner.  They have always seemed to be a great group of people and I have liked working with them.  While I appreciate their honesty, a reduction in contributor royalties is a slippery slope and does not bode well for their long term survival.  If an agency needs to cut royalties in order to survive then maybe they shouldn't survive.

I like Clipcanvas but this is a big concern.  Sales are good with Pond5 and SS.  I think the only reason why CC would be struggling is because buyers have gone to the other sites.  How are they going to get them back by given us a commission cut?  It takes time to upload clips and I'm not encouraged by the language in this email.  Sites don't usually start struggling then suddenly bounce back.  I'll leave my portfolio there and hope for the best but is it worth spending time uploading new stuff if it looks like they might not have a long future?

Okay... So is CC management taking a voluntary %20 cut in salary to match contributor losses?