Dreamstime introduced new pricing structure

By the end of April Dreamstime introduced new pricing structure: updated levels (categories of products) and new royalties. Pricing of products in individual categories (in credits) remains unchanged. 

Update of levels means that almost all files were shifted up by 1 level. There are only 3 exceptions: (1) new files that didn’t sell for more than 24 months remain level 0, (2) existent files that didn’t sell for more than 24 months are allocated to level 0 and (3) products with more than 50 downloads remain in level 5. All new files will be automatically allocated to level 1 instead of level 0. 

Royalties of non-exclusive contributors were reduced by 5 percentage points and now range from 20% of the sale price (level 0) to 45% (level 5). The original range was 25% to 50%. Royalties of exclusive contributors remain at 60% of the sale price. Royalties related to exclusive images (of non-exclusive contributors) fell by 5.5 percentage points (new range is 22.5% to 49.5%).

Dreamstime says that contributors can expect same royalties (in financial terms) as they had before, with the only drawback being that level 5 files have seen a cut. This is because impact of lower royalties is offset by higher prices of products (due to their transfer to higher levels). This statement, however, assumes that unit sales of Dreamstime will remain stable despite increase of end-user prices, which is in some categories relatively significant. E.g. price of new files with 0 downloads in XS resolution was just 1 credit before the change and their allocation to level 1 means increase of price to 3 credits. I estimate that the average increase of prices is c. 30% in lower levels. It should be also noted that if statement of Dreamstime proves to be true and contributors earn same royalties, Dreamstime should earn significantly more due to these changes. 

There is highly competitive environment in microstock industry. Therefore, significant increase of prices should have negative impact on unit sales in medium term. I expect that Dreamstime will not be able to maintain its unit sales after this update of levels and royalties, revenues of non-exclusive contributors will decline and revenues of the agency will improve slightly. Though Dreamtime’s announcement does not look negative for contributors at the first sight, it just brings a hidden way how to retain more money at the agency in expense of contributors. 

On the other hand, announcement of Dreamstime shows ambitious of the agency not to upset contributors and explain changes as at least neutral. This should be appreciated, because it is not common among large microstock agencies. Also, the basic royalties of 25% for level 1 products (taking not into account products in level 0, because they are unpopular and 20% royalties rate is applicable just to their first sale) is still higher than basic rate at Fotolia (20%) and iStockphoto (15%).

If you are interested in exact calculations how roalties change in individual categories, you can find it in table presented in related discussion at microstockgroup.com. 

Updated levels and royalties are shown also in table released by Dreamstime: 

Level 0 now includes only unpopular new or existent files that didn’t sell for more than 24 months and pricing of products included in this level is no longer comparable with basic prices of competition. Therefore, level 0 files will be replaced by level 1 products in detailed comparison of prices of top microstock agencies that I post in Designers tab.

If you find information in this article or on this website useful and interesting and are you not registered with some agencies mentioned, I will be pleased if you use my links to enter microstock agencies before and at registration. You and your earnings will not be affected, microstock agencies will retain a few cents less from your sales/purchases, and my motivation to update and improve presentation will increase. Thank you!