500px Cuts Royalty Rate from 70% to 30% for Non-Exclusive Photos

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500px is cutting its royalty rates for photographers selling photos through the company’s marketplace, and it seems that many of those photographers aren’t happy about the change.

Photographers using 500px Marketplace to sell their work have been getting an email informing them that royalty rates are being cut from the 70% commission of old (it was originally launched at 30% two years ago before being bumped up to 70% after photographers grumbled). Instead of a single commission rate, it will now be split into 2 depending on exclusivity.

Moving forward, 500px will issue an “industry-leading” cut of 60% for photos sold exclusively through 500px, and a much lower 30% for non-exclusive images. For photographers wishing to sell photos elsewhere at the same time, those photos will see a 57% drop in earnings.

Here’s an excerpt of the email announcement that was sent out:

We’re writing to let you know about some changes that will affect the photographer royalty rate and the 500px Marketplace licensing tiers. We are honored that you have chosen 500px to represent your work, and that is why we are notifying you in advance of these changes.

We’ve learned a lot in our two years of running the 500px Marketplace. Since its launch in March 2014, the number of sales and clients have outperformed our projections. We want to grow this business even bigger, for your sake and ours, and we are investing in international expansion and improved technology to attract even more clients.

As we look toward doing that, we need to make some changes to ensure we will continue to be a healthy business that can deliver for our clients and for our contributors. We are changing the photographer royalty rate to ensure the sustained growth of 500px. We are also restructuring our licenses to increase market competitiveness and broaden our customer base. These changes will come into effect on April 4, 2016.

Why we’re making these changes

We’ve solicited a lot of feedback on what we need to do to meet our licensing clients’ needs and to be competitive in the market in order to grow licensing sales. We are adjusting our pricing and license structure in order to fit the market’s needs. This will also give our stock buyers more flexibility, facilitating a greater number of your photos sold.

The royalty rate

We’ve been learning what it takes to operate and grow an online marketplace. With expanding technology development, legal management and marketing efforts, we incur costs to showcase the marketplace and attract new buyers. While we want to give photographers the best possible royalty rate, and so launched with the 70% commission, we’ve learned that the reality of running a stock marketplace requires a different structure. We still believe it is important to reward the creators, which is why we will continue to give you an industry-leading royalty rate of 60% on images exclusive to 500px, while moving to a 30% rate for non-exclusive images.

There are also a number of other changes as well, including the unbundling of Multi-Seat and Unlimited Print license add-ons from the standard license, a series of new license add-ons (e.g. Items for Resale and Extended Legal Warranty), and increasing size of Web Ready license to 1800px (on the longest side).

500px says that it consulted with some of its users before making this decision, and feedback can be emailed to the Customer Excellence team.

A number of photographers are already voicing their displeasure with this change on 500px and in online forums. A common complaint is that while 70% was an attractive rate over competing stock services out there, 30% for non-exclusive shots makes 500px’s Marketplace similar to the majority of companies in the industry.

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