Subscription Overview for Contributors

0. What is a subscription?

1. Target groups of image-subscriptions

1.1. New customer groups
1.2. Different customer base than existing customers

2. Background knowledge: Traditional subscription-models in the market

2.1. Short overview
2.2. Evaluation of the existing subscription-models

3. Advantages of the PantherMedia subscription model

3.1. Advantages of the PantherMedia model for image buyers
3.2. Advantages of the PantherMedia model for contributors

4. The PantherMedia image subscription plan in practice

4.1. Credits as a currency for subscription-customers
4.2. This is how the image subscription model works for you as a contributor

5. Contributors- Payout

5.1. Traditional settlement methods of other providers
5.2. New & fair commission model at PantherMedia

6. Opportunity: subscription as a sales driver

What you already know from other industries as "flat rate", "Sub" or "All you can eat" is the image subscription in the stock image market. The customer purchases the right to download a certain amount of images within a certain period of time. Besides an attractive price level, this model offers additional benefits to the customer such as long-term financial planning and a smooth and simple ordering process.

An image-subscription is especially interesting for larger companies (e.g. corporate groups) and other image buyers with a regular and high demand for images (e.g. web portals).

The advantages are obvious:

• Inexpensive: reduced image prices.
• Uncomplicated ordering process: order and pay once, then download for months.
• Safe planning for companies: a fixed amount per month covers all costs for the image demand.
• Variety: Daily new images allow the access to always up-to-date and manifold imagery (e.g. for daily updates of websites).

Customers with an image subscription are usually a different kind of image buyers than those customers which buy images through traditional single image downloads. This is due to the fundamental differences between the two models:

This means:

• With the subscription model, a new target group will be won which has not been buying from PantherMedia yet.
• The risk that existing customers migrate towards the cheaper subscription model is very low. That is what our research, customer surveys and our statistical analysis showed.

Almost as a market standard, a model has established that allows image buyers to download approximately 25 images per day in a good print resolution. If this quota is not used on any calendar day, the download option for this day expires. The contributors will receive a fixed amount of money per image sold in one standard resolution (print resolution). On market average , this amount is about 0,24 EUR/USD per image.

Most of the subscription-models can be ordered in packages of one, three, six or twelve months. The usage rights are usually limited. These restrictions usually include:

• The circulation is limited (number of print run).
• Merchandising right is not permitted.
• In-house seat restriction (only one person may access and use the image).
  

As said above most of the subscription-models have certain advantages from a customer’s point of view. Besides those, there are also disadvantages with the existing models which we would like to point out shortly.

Disadvantages of the traditional subscription models for image buyers

• Oversupply: There are customers which do not need 25 images per day and mostly not in print resolution (only web images).
• Restricted use: The images may not be used for certain purposes (e.g. for producing merchandising-products) or they are limited regarding print-runs, resolution, merchandising rights, access or other restrictions of usage.
• Invoices: It is necessary for some companies (e.g. advertising agencies) - due to financial accounting laws or for customer projects - to receive one invoice per image. This is not possible within a traditional subscription-model.
• Service: personal service or rights-clearing are mostly not possible in this bulk business.

Disadvantages of the traditional subscription models for contributors

Also from a contributor’s point of view, traditional models have some disadvantages - this is why the term „subscription“ sometimes has a bit of a negative sound in the microstock market. Mostly the term "subscription" is being associated with decreasing contributor commissions and overall unfair payment. This is true from our point of view for most of the existing models.

• Intransparent and unfair revenue distribution
  For all subscription models we have analyzed, one thing is valid: there is a very uneven distribution of revenues between the stock agency and the contributors. Since the contributor is paid on basis of his downloaded images, the sales of "non-downloaded" images of customers contingents flow into the pockets of the stock agency.
• Adverse pricing
  In most of the existing subscription models, the contributor does not receive a higher commission share when a higher resolution has been sold. This means for a print license you receive as little as for a web license.

With the incentive to make it better, we have developed a model that does not only offer image buyers many advantages, but also aims to offer contributors a new transparent and fair commission model.

PantherMedia offers its subscription-model with the highest possible flexibility and an attractive price for the image buyer.

• Demand-driven: The number of images which can be downloaded depends on the resolution (web, print, large size) – just as the customer likes it.
• No limits: The licenses available in the subscription model and through single image download are identical. This means they are not restricted regarding print-runs, display size for web usage, seat restriction or resolution.
• Flexibility: Should a customer require a merchandising license, he can purchase it within the subscription model by paying an additional charge.

• The commission share depends on the type of resolution (web license resp. print license) and usage rights (single license or merchandising license). This means increasing commissions for a higher resolution or extended license rights.
• Very, very often the maximum download capacity is not completely used by the image buyer. This turnover normally flows into the pocktes of the stock agency. Not with us! With PantherMedia, you receive a commission share even for unused subscription downloads. For details, see section "5 Contributors-Payout "
  

You can decide for yourself whether you want to take part in the image-subscription model. You can participate with all of your images or, of course, only with selected images. You can also determine if your images should only be sold with PantherMedia or also with our numerous distribution partners in the subscription plan (The commission settlement is done as usual: Sales minus distribution partner commission (= net sales) is shared between the contributor and PantherMedia evenly with 50% each). See also „PantherMedia distribution partners“. If you participate in the PantherMedia subscription model, the number of credits of your downloaded images will be credited on your account. At the end of the month, PantherMedia calculates the actual value of a credit for each month. Depending on how much income PantherMedia made with subscriptions each month and how many images have been downloaded of customers in the same period, the value of a credit is calculated individually. Conclusion: PantherMedia shares the profit through the subscription model with the contributors - in a transparent and fair manner. Learn more about the commission in 5.2. New & fair commission model at PantherMedia.

In most subscription models contributors will receive a fixed amount per downloaded image in standard size. On market average, these are about 0,24 EUR/USD. This is the value when ALL customers would use up their COMPLETE contingent EVERY day. However, it is well known that customers of subscription plans hardly use up the full contingent of credits. Often enough, a customer orders none or only a few images in a day - in addition there are days without ANY downloads due to weekend, holiday or sick leave.

It is assumed that, within subscription models, far less than 50% of the purchased credits are actually used up.

Usually, only the stock agency enjoy this “empty profit”. If no images have been downloaded, the revenue does not have to be shared with the contributors.

This is precisely where we want to set new standards. PantherMedia has decided to share the revenue from the image subscription with our contributors at with commission share of 50%. This includes the revenues from unused credits! This provides not only transparency in the commission scheme, but also fairness towards the contributor.

PantherMedia always transfers the contributor 50% of the consumed subscription credits (of hin images) to his "subscription account." All credits from each month are accumulated there. At the end of each month, the actual monthly value of a credit is calculated. This means: calculated is the complete revenue from the subscription model compared to all downloaded subscription images per month. This is the “monthly value" of a credit. This is at least 0,22 EUR/USD per credit. But this really only if EVERY customer would download ALL images EVERY day. In reality this will not happen and you can assume that the actual value is much higher than this minimum value.

We want to demonstrate clearly with an example what may sound complicated in theory at first:

Calculation of the contributor credit:

Calculation of the value of a credit:

In the image subscription model, the price per image is lower than for single image sales. However, the subscription model offers you, as a contributor, a good opportunity to increase your sales:

• We address a new group of customers which has not yet bought images from PantherMedia. This means additional revenue.
• Once a customer has bought an image subscription plan at PantherMedia the subscriber orders mainly from the pool of Panther Media. This increases the number of sold images at PantherMedia and therefore, of course, the turnover of the contributor.
• If a fixed amount has already been paid, also images are downloaded which are not necessarily or not currently needed. This leads to spontaneous downloads which would not have taken place without a subscription plan.
• The lower price per image motivates to more frequent downloads or spontaneous downloads.

This is why we are sure: The participation in the subscription model will increase the earning capacity of each participating contributor significantly.