That's a clever insight, and a lot of maths to work through!

iStock openly charges a premium for buyers using foreign currency (they all have the opportunity to buy in US dollars), so another perspective you may choose to take is that the buyer is paying the extra (US$0.205 per credit in your example) for iStock to manage the currency, and the remainder (US$1.30) is what buys the photo.

In reality it all goes into the pot, and whether 20c per credit is enough for iStock to cover the FX costs or not is up to them. I'm sure they'll adjust the foreign currency prices so that they cover the costs with a bit of a margin to cope with fluctuations in the real exchange rate.

Your example does highlight the size of the premium. Buyers pay an extra 15.7% to use Australian dollars in your example. (1.505 vs 1.30)

but the photographer gets $1.3 x 20% = US$.26

I remember statements that the photographer gets 20% of the actual cost of a credit, not 20% of the costs in US$. That was mentioned during the short "let's screw Brits a bit" phase at the beginning of the year when photog got incredible large royalties from those British and European buyers ...

..fair share.... 20%.

Quote from: lathspell on February 14, 2008, 22:16

Quote from: rustyphil on February 14, 2008, 18:28

but the photographer gets $1.3 x 20% = US$.26

I remember statements that the photographer gets 20% of the actual cost of a credit, not 20% of the costs in US$. That was mentioned during the short "let's screw Brits a bit" phase at the beginning of the year when photog got incredible large royalties from those British and European buyers ...

ok, so if someone pays the US$1.505 per credit, I will still get 20% so US$.30

Yep.