Friday, March 18, 2011

iStockphoto And The Big Call

iStockphoto was the first stock site I signed up with in 2005. I’ve long had a love-hate relationship with them. Peculiar rejections claiming image faults where there are none, and a host of business actions over the years that made it look like the adults were not in control. They did however do a good thing for me—allow me to achieve my goal of shooting and selling stock photos and in the process propel me into areas of photography I’ve never explored. It helped me improve the quality of my work. I’ve since branched out to other sites

iStock early on wanted people to be exclusive to them. It makes for good marketing leverage to have a loyal group of contributors providing content that can’t be found anywhere else. I’ve been tempted many times but only went exclusive for video clips. I’m glad I stayed independent. So much has changed there, starting with being bought by Getty Images in 2006, which were in turn bought up by a private equity firm Hellman Friedman in 2008. New owners always means thing will change and often in undesirable ways. (Starting in 2010, Getty owned stock companies can now post images for sale on Istock’s site. They can also retain their web sites for sale through them as well. No exclusive stock artist is allowed to do that. Exclusive can now mean whatever Getty-Hellman Friedman wants it to.)

The Fraud
After a series of screwy events that are too many to go into here, iStockphoto announced in December of 2010, around Christmas, that credit card fraud had occurred. The amount of fraud has never been revealed. Much to the dismay of the contributors, iStock announced that all members would bear the burden of the losses. Naturally, they were in an uproar of this! Then, it was announced in March that the fraud had continued through January and February of this year as well. I was hit with this round but only out $1.80 so I know I got off easy. One of the bigger sellers, Sean Locke posted on iStock‘s forum that he had lost over $5,000. So far, that is most of any photographer on there that has been admitted to. The idea that Getty-iStock had no intention of reimbursing any of the contributors over this is probably the biggest outrage committed by this company. Many people are wondering when the class action is going to start. Frankly, I don’t know why a majority of the exclusives haven’t left by now.

So far, there has been no apology. Not even a sense of regret from iStock management that this event happened. That is the way of corporate America—when something screws up, never admit anything.

The Big Pow-Wow
So, in order to placate the unruly mob and plug the leaks it was announced that a conference call would be enacted with six members and they would all exclusives, allowing no non-exclusives to take part in the process. Each person had to sign a non-disclosure agreement. How is that for transparency? Many questioned that and some hoped that Sean Lock would not be involved. He was one of the Six.

And what many forecast came to pass. Mr. Locke posted a vaguely worded statement on iStock’s forum full of happy talk and how the unnamed powers-that-be are working to insure this never happens again. The usual lemmings appeared to offer their gratitude for a statement filled with nothing but air.

Nancy Louie (Nano), another member of the Six also posted her thoughts about the call stating “What I did find overall were some sincere answers and disclosure for some hard lines of questioning.” How nice. Disclosure, but only for a select few. Real disclosure would actually be telling us something, right?

However, over at the Microstock Group Forum, Mr. Locke had a different reception for his non-disclosure, disclosure. When asked about what was said at the conference call, he erupted with this response:

“Either you think we're reasonably smart enough, or at least one of us is that you are able to go, "Yeah, they're positive about the outlook, so I'm good". So either you do or you don't, and I totally get it that someone would want explicit details. Heck, we didn't even get those. However, it seems we did mostly feel that ongoing work will address this (from the forum posts).”

A rebuttal from Stockastic (name unknown):

“In any other business, I think a non-report of an alleged discussion of an unspecified agenda between un-named participants would be nothing but material for jokes. Here, at this intersection of web investors, IT geeks, internet crooks, IP lawyers, black-clad art school graduates, and photographers receiving 19 cents per sale, it apparently makes sense.”


Where Do We Go From Here?
iStockphoto has been in Bungle Mode for some time now. This current credit card fraud nightmare has been the worst so far. If they think that having one of their top and most trusted photographers issue a bland statement to assuage the contributors concerns and anger, think again. That was a massive fail. We still don’t know anything. We don’t know the level of the fraud, why it was allowed to go on in the first place, why there is no insurance for this sort of thing, or whether or not law enforcement is investigating the case. And, no promise that it might not happen again.

It is also strange that the fraud is so rampant at iStock when it doesn’t seem to be affecting the other stock sites such as Shutterstock, Dreamstime and Fotolia. In fact, nobody has heard of it happening at the other Getty owned online stock sites, of which there are quite a few.

Who knows? Perhaps some good will come out of all of this mess. For the sake of the company, they had better do something. All I can see is, once Getty bought them, things have never been the same or as good. I think everybody can see that.

On the other hand, I am reminded of what Getty did shortly after they bought iStock. They bought a stock company in Ireland. No soon had they acquired it, they laid off all the staff, gave them all generous severance packages and took the company apart. That’s the kind of thing the big companies do to the little ones. “Competition is a sin,” as John D. Rockefeller once said. It’s a sin to them all.