Now that I've had time to consider this scheme further, I'm afraid my conclusion is that it is not as good as I first thought.  Yes, it is much, much better than DT or StockXpert, but it nonetheless could be detrimental to earnings.

The clue is given in the IS post by kkthompson where he confirms that subscription credits will be priced at less than 38c (and geopappas subsequently compared that pricing to SS on another thread).

At present credits are priced maximum at 10 credits for $13 ($1.30 each) or cheapest at a bulk buy 1500 credits for $1450 (96c each).  Non exclusive commission is 20% of these levels, or 26c to 19c.  Note that 19c is a 26% discount compared to 26c.

If subscribers can get credits at 38c or less, WHY ON EARTH WOULD ANYONE NOT BECOME A SUBSCRIBER?  We have to assume that all customers will become subscribers unless they are completely stupid.

Under subscription sales, photographers get a fixed 19c minimum payment per credit spent.  This means that all the 26c payments disappear.

Doesn't sound a lot, but in a worse case scenario this represents a drop in income of up to 26%.

Let's consider percentages for a moment; when something drops 26% it results in 74%.  To get back to 100% that 74% has got to grow by 35%.

So in this example, a photographer has got to increase sales by 35% just to stand still.

Clearly this is an extreme example.  And can be offset by a) increased sales from the subscription scheme b) occasional payments from the 'free lottery ticket'.

Because subscriptions are going to be so much more attractive to buyers than 'per credit' packages, I am going to have to assume that all my present 26c payments will drop to 19c payments.

Yes, I understand your points completely - what I've described above is very much a 'worst case scenario' where all present payments are 26c and all future payments drop to 19c.  Of course the real world doesn't work like that and the 'free lottery ticket' arrangement of all unused credits per day being treated as 'spent' is an unknown quantity that could make a huge difference to the numbers.

But it remains the case that subscriptions are going to be so attractive in terms of pricing, that there is a real likelihood of the present 26c payments disappearing and being replaced with '19c plus a share of unused credits'.

You are probably much more of a mathematician than I am, and to correctly assess the expected income from the new scheme needs either expert knowledge of 'unused credits' from subscription schemes or some major assumptions for those credits.

It is quite clear that the scheme will work to huge advantage IF subscribers typically spend a lot less than their daily allowances (fingers crossed).

Yes Madelaide, that's my concern - that all the present 26c payments get replaced with 19c payments.  But as yingyang points out, all the unused credits get treated as 'spent' - that is the unknown quantity.

The problem (for me, anyway) is that I just don't know where all the subscriber profits come from; yes, Yuri has given some calculations and assumptions for SS, but it remains the case that we really don't know if SS's profit comes from 'completely unused days' or 'partial days'.  Remember that photographers get no benefit from 'completely unused days' at IS (or SS).

I've purchased subscriptions in bygone years.

1.  No matter how hard you try you never download your full allotment.  Even when you make it a point to try.

2  You download images you "might need some day" because you have downloads still available and you figure "use them or lose them".  So a lot of images that get downloaded never actually get used.

3.  You'll see larger downloads for the same reason.  So instead of a .19 XS, you'll get a .38 S or better.

I think this has real potential.

Many thanks to Hatman, Yingyang and Madelaide for running the math on this and sharing your thoughts and conclusions.  As a very poor math student, the whole thing has been way over my head and I haven't known what to think. 

After reading all of your well considered and explained scenarios the fog is lifting
Sounds like it is definitely not the disaster I at first feared.  I have to admit I am relieved. 

Anyway, one of the scenarios they gave - 30 credits a day - is not so unrealistic.  That's just 6 M-sized images or 3 L-sized ones, and it's monthly cost is US$300.  (For you SS contributors: how those daily limits compare with an similar SS packages price?)

The lowest SS plan is $199 for 25 images/day.  As you are aware, on SS though, a buyer can download the largest image sizes that are available.

i'm not sure how many buyers will accept day by day system -- doesnt seem ike IS really thought this thru -- do they really expect buyers to spend part of EVERY day selecting images?  even if the buyer's workflow included searching for new images every day, are they still going to work weekends?  certainly the SS stats show drops on weekends

single day use it or lose it just doesnt make any sense;  if IS doesnt change it, then the discussion will be moot since there will too few subscribers t omatter

steve

I share a lot of Hatman's concerns. 

While the IS plan looks great compared to other mixed sub/credit plans, I just don't have a good feel for how this will truly play out.  YingYang makes a compelling case, but I think he is being optimistic.  And regardless of how positive the increase is for contributors, who can say how it will compare to the SS raise which we haven't even seen yet?

I can't imagine going exclusive at this point in time.  There is too much flux taking place in a still evolving market place.

  why naive?  more like realistic -- do they REALLY think buyers are going to use the site EVERY day including weekends?  how many people need images every day?  and what happens when you need more than your allotment one day, but none for the next week?   the timesacle is just too short.  a subscription neeeds frexibility.

I think you're missing the whole point of a subscription service. iStock is planning on people not needing images everyday because that is how they will make their money. It is NOT a per day subscription. Also, the part you quoted was talking about something different from what you're talking about.

Translation Error?

I'm not so sure... I asked about that in their forum, and this is what I got from Rogermexico:

Quote

Your subscription gets you a daily credit limit - x number to use for x number of days at x dollars.

So it seems one will not be required to subscribe for a month.  Ok, maybe just one day won't be allowed either, but am I wrong in my interpretation?

Yes I think you're reading too much into his basic statement. They came out and said specifically that there will be no 1 day subscriptions. They didn't say weekly subscriptions were out the window, but I highly doubt that will be an option.

Consider it this way. 1 day subscriptions would destroy the profits for iStock. They're going to be making their money from the unused credits on days like Saturday and Sunday. People that would want 1 day subscriptions are the type of buyers that would use most or all of the credits, which would cause iStock to actually lose money on the deal.  It is in iStock's best interest to have longer subscription lengths, not shorter ones.

Roger was giving you the basic formula. I think you're reading too much into it.

They came out and said specifically that there will be no 1 day subscriptions.

I didn't read that. They could be more clear in their explanation. The thread was contaminated by a side discussion and I gave up following it.

Regards,
Adelaide