In a forum post and email sent out to contributors, iStock/Getty have announced another major change for contributors. Actually there are two major changes: First of all iStock is now also formally be replaced by Getty Images as our contract partner.

While they say that the iStock HQ will remain in Calgary, it means that all business relations will now be transferred to the mother company. The second change is the payment schedule from a weekly on-request schedule to a monthly automatic payment.

Change from iStock to Getty as contract partner

The contractual change from iStock to Getty is a logical next step of the integration of iStock into the parent company. Getty has integrated iStock step by step after their acquisition in 2006, first by inviting selected iStock contributors to contribute to GI directly, by exchanging collections of images between the sites, by adding the partner program to iStock and transfer images to Thinkstock and photos.com (the latter no longer). Also, there has been a tighter technical integration in the background that can only be seen indirectly but also works to the better as we can see in the increased stability in recent years.

But the new change has one major impact: It also means our new business partner is located in the US instead of Canada. Apparently Canadian tax offices are quite lenient with controlling international money flows but the US American Internal Revenue Service (IRS) keeps a much stricter eye on who earns how much from where. And that is also valid for international contributors when the company has its business on US soil.

To non-exclusive contributors, this is not big news: Shutterstock and Fotolia are also based in the USA. Also, Getty house contributors already had to deal with the necessary forms. It definitely is a change and will require everyone’s attention and care because the situation can be very different depending on where you live. I won’t go into details on this as it rather requires local (national) consultation than any general advice.

Change in payment schedule

The change in payment schedule is rather easy in comparison as it affects everyone. In the past, we were able (and required) to request a payout of our royalties earned whenever we wanted to. We could make a payout immediately after reaching the minimum of $100 or wait for a bigger amount to accumulate. The latter was often an advantage for people requesting payment by cheques internationally as some bank fees were depending on the number of transactions rather than a percentage of the cheque amount. The cheque option (though not directly but through service provider Payoneer) will still be available but it will become less attractive to people making not as much money to make it cost efficient.

The second change is that payment through Skrill (former Moneybookers) will no longer be available. This is probably a hit for some people living in countries where PayPal is not available or complicated. This is likely to be true for countries that aren’t on the “list of best friends” with the USA as PayPal is a US based company and has to apply US law while Skrill is based in the UK.

While I’m sorry for the people affected by those two changes, I think the main change is not that much of a problem. It is the transition phase that will cause a lot of problems for people relying on the royalties paid by iStock.

In addition, my personal anger about this change is not towards a monthly automatic payout (which I already get from Shutterstock, Stocksy United, Getty Images, Pond5, 123RF etc.) but the fact that iStock now does not only pay far lower royalties than the most important competitors but also keeps my money much longer: While Shutterstock is reporting all sales more or less in real time and pays out all sales within a week or two after the end of a month, iStock reports an increasing amount of sales (Partner Program, Image Subscriptions, Getty 360, GI Sales) with a month delay. And as my question in the forum about this has been answered, those sales will only count in the reporting month for a payout another month later. For example images downloaded on January 15th will only be reported in February and consequently paid out on March 25th – 70 days after the actual sale. With Shutterstock, a download on the same day will usually be paid out around February 7th, less than half the time iStock takes.

Again, this is my personal peeve with this change but it also has a major additional impact on the transition phase.

Sample how the initial change will impact contributors

As the whole change is rather complex, let’s do two examples how the money flow will change:

First let’s assume an exclusive contributor – to keep the numbers easy, our sample contributor has made $500 per week in iStock royalties until now plus $500 in GI Sales each month. Until January 21st, 2015, you can continue with your current pattern. You can either request $500 each week (and $1000 in the week that GI Sales are being processed) or just make a monthly request for $2,500 or keep the money in your account as long as you like. On or before January 21st, you will have the last chance to request payments with the current schedule – if you are using PayPal, that means you will need to request your royalties on January 19th and get paid that amount on January 26th.

In December you would request your royalties as before, let’s assume on a weekly basis. You will receive weekly payments of $500 and $1,000 in the week after GI Sales have been processed (plus another $200 or so when the Image Subscriptions are added). As a result, in December your total payouts would be around $2,700.

Now let’s assume you continue doing this weekly, so you will receive $500 on January 5 (requested some time at the end of 2014),  January 12 (requested before Jan 5), another $500 on January 19 and the last weekly payment on January 26, 2015 – with the current speed, it is likely that Image Subscriptions have been added before that last request date, so you will receive $700 in your last weekly payouts. Your total payouts in this case would add up to $2,200.

Now we have to figure out what happens to the royalties you receive after January 19 when you made your last request – there is 12 days left, including two full business weeks. So we can assume that you are accumulating two weekly amounts of $500. In addition, as it was usual until now, the GI Sales for December are likely to be processed after January 19. In this case you will receive another $500 into your iStock account, so the total on January 31st would be $1,500. This amount will be paid out to you automatically on February 25, 2015.

In February, you will earn your usual $500 a week ($2,000 in total) in this example, get the January GI Sales payment of $500 plus the January Image Subscription payments (making maybe another $200). So you would end up with $2,700 in your account at the end of February which will be paid out on March 25, 2015.

All in all compared to the past payouts of $2,700 each month, you will receive $500 less in January ($2,200 payouts) and $1,200 less in February ($1,500). This money is not lost, it is “just” delayed. But it might cause some trouble in your cash flows. So be prepared – which is quite hard given that you only have one month for preparation…

Let’s make a second sample contributor: This one is non-exclusive. If he is somewhat similar to me, he receives around 60% of his royalties through the Partner Program and Image Subscriptions. For simplicity let us assume, that contributor is receiving $200 in royalties through credit sales on iStock each month and about $300 through the PP and Image Subs which are already processed a month later.

This contributor can request a payment before the end of December for the current credit sales plus the November PP/Subs sales for a total of $500. He can also make another request on January 19 (if he uses PayPal) for around $100 in credit sales (half a month) and the $300 of December PP/IS sales which usually should be processed before that date. He would receive $400 on January 26, around $100 less than the typical monthly request he may have made before.

However, in February he will only receive the amount that has been accumulated between January 19 and January 31 – as this would only be the credit sales on iStock itself, this would amount to $100 in our sample case. On February 25, he will receive only these $100 – about $400 less than usual.

In March, he will then receive the $500 he used to get each month as both the running credit sales through February would add up to the January PP/IS sales processed in February. All in all he will “lose” (by being delayed) a whole month of payouts through this transition phase. Let’s hope our second sample contributor doesn’t rely heavily on iStock’s royalties.

Changes, changes, changes – when will there be one in favor of contributors?

As if the changes in those last two years were not enough to take, iStock/Getty seems not to stop changing every part of how they run their site. There certainly have been some improvements among those changes – I believe, the new subscription offer introduced in spring was really needed to stay competitive; and as mentioned above, the technical stability has definitely improved a lot in recent years, at least on the buyer side of the business.

However, I fail to see any good news for contributors in all of these changes. I was really hoping that one day I could actually again mention iStock in a positive context again. But given how this change is being handled once again along with the ignorant arrogance shown once again with the recent uploading issues I now have completely lost any faith that there will be anything good coming out of Calgary or Seattle again, ever. There are still some things that Getty could change without impacting their business significantly but helping out the contributors. But those are still being ignored and lost in forum threads despite Getty themselves had asked for feedback years ago.

What I really appreciated hugely at one time is now finally gone forever. There is no sympathy left in me for this company. And as it happens, I don’t need to worry too much anymore – these days I am making more than double the royalties on Shutterstock than I do on iStock. For new uploads, I actually make more royalties on Fotolia than on iStock as well.

And actually with just 180 images in my portfolio, Stocksy United has earned more royalties than iStock in September and almost the same in October. So I will rather invest more time in shooting new images for Stocksy than continue uploading to iStock with their uniquely stupid and bothersome upload system. Almost eight years after registering with iStock, I now have my last images in the queue. As I am in this for business, I will certainly not remove my images as it doesn’t cost me any more time and will still make some money. But it just is becoming more and more unsustainable to supply to the company that keeps changing every aspect of their business against the contributors’ interests.