TurboSquid, Falling Pixel, & Exchange3D

by Michele Bousquet

Over the past few months, we’ve been talking extensively to competing stock 3D sites FallingPixel.com and Exchange3D.com. The discussion has centered around challenges common to the whole industry—quality control and content certification, international languages and currencies, licensing rights and undercutting.

We quickly realized that we at TurboSquid are not the only ones who are concerned about these issues. And while we could try and address these problems on our own, it makes a lot more sense for us to band together to create solutions and advance the industry. We believe the stock 3D industry could be 25 times bigger than it is today, and we are investing everything we can to grow it. There’s no reason an artist should have to build a 3D model somebody has built before, but it still happens all the time.

For this reason, TurboSquid has joined forces with Falling Pixel and Exchange 3D, and we’re working together to address common industry issues. But we also value the diversity these sites bring to the industry, and we are eager to learn and benefit from each other’s strengths. For example, Falling Pixel sells in Euros as well as other currencies, while Exchange 3D caters to the Eastern European marketplace. All three sites will remain separately open for business as usual, offering the same range of options and choices to artists and customers.

SquidGuild Benefits

SquidGuild artists can now publish 3D models for sale on all three sites manually. In the future, SquidGuild members will be able to publish to all three sites automatically using SquidGuild Syndication. Our 3D model certification program, now in the beta phase at TurboSquid, will soon be in place across all three sites as well. We’ll also be unifying payments and reports across the three sites and offering access to alternative payment options like Webmoney and Moneybookers.

Royalty Rates

Royalty rates will be unified on May 1, 2011, across all three sites to match TurboSquid’s current royalty structure of 50-60% for exclusive artists and 40% for non-exclusive artists.

We thought we’d share TurboSquid’s current average royalty rates for ALL artists for 2009-2010. These rates are now over 55%, even when non-SquidGuild 40% payments are factored in, and these average rates continue to climb month after month.

What you can see from the graph below is that in the first month of the SquidGuild, we increased rates for new SquidGuild members to the 50-60% range without changing non-members to 40% (to give people time to decide on the program), which is reflected in the initial peak in August at 53.6%. We then changed the rates in September 2009 to 40% for non-SquidGuild members.

You can see that after the initial decision period, the rates climbed as artists signed up for the SquidGuild, with high adoption rates at all levels from Clear to Diamond. The current average royalty percentage across all artists at all levels (including non- SquidGuild) is over 55%. The result of these changes is that artist payouts are the highest they’ve ever been, both as total payments and as a percentage of sales at TurboSquid.

Jonathan Lloyd of Falling Pixel

As part of this new partnership, Jonathan Lloyd of Falling Pixel is working directly with TurboSquid on a big vision and strategy for the future. Jonathan comes with a wealth of experience in running a quality stock 3D site, and we look forward to incorporating his insights and knowledge.

If you have any questions about this announcement, please see our partnership FAQ or contact TurboSquid Member Services.

17 Responses to “TurboSquid, Falling Pixel, & Exchange3D”

  1. MonkeyMan says:

    Isn’t taking about 50% royalties over an artist’s work a lot? Just for being a “simple” website with exposure!? And 60% (more than half of the artist’s asset value) if he doesn’t go exclusive?
    Aren’t regular agents taking about 15~25% for selling somebody else’s work? Without exclusivity…

    Post edited to comply with TurboSquid’s Code of Conduct

  2. Michele Bousquet says:

    The royalty we take is for far more than “being a website.” We are constantly working to bring new customers into the industry, which is one of the reasons our growth % is in the double digits month after month, year after year since we started in 2000. We work tirelessly to make sure 3D models show up in Google search results. We handle all the payment transactions. We visit customers and ask them what they need. We’re the first stock 3D site to display turntables and high-definition renderings of 3D models. We recently put forth standards for 3D modeling based many tireless rounds of customer surveys and interviews. We have 24/7 Live Chat support and we do free file format conversions, usually within 24 hours of request. And so on.

    I’m not sure which sites are taking 15-25%. Any such site would have to be a hobbyist doing it for fun, and wouldn’t have the resources to develop a customer base, educate the industry, or even provide decent support. Some artists skip marketplaces altogether and sell their own models on their own sites, which is a way to keep 100% of the sale price. But such artists inevitably find that dealing with payments, fraud prevention, site upgrades, support, conversion requests, etc. takes up a lot of time. Some stick with it, and some just leave it to TurboSquid to deal with all that stuff.

    In the end, only you can decide if it’s worth it to sell your work at TurboSquid. We do sell more than other sites, so if you’re interested in making the most money in this business, you’d have to look at whether 40-60% of a large piece of pie is better than a larger percentage of a smaller pie. We do have competitors, and you have choices of where to sell, which is one of the great things about this industry.

  3. Plutonius3d says:

    I have my own site and I have never had any problem with site upgrades, fraud prevention, support or conversion requests. Most buyers never even ask for support or conversion requests. There is little reason why any 3d marketplace should be taking more than 50 percent of an artists royalties.

  4. Kupfer says:

    Great news! It would just publish my model on three sites simultaneously, it is easier to my publications, I’m interested

  5. Michele Bousquet says:

    @Plutonius3d: It sounds like you’re doing well for yourself! We have 2 million members and they seem to ask for conversions constantly. If you can manage your own site and you’re happy with the sales you’re getting, then there’s no reason why you shouldn’t keep doing that.

  6. Michele Bousquet says:

    @Kupfer: Yes, we’re very excited about this opportunity for you! Between the three sites, we’ll be reaching a broader international market.

  7. Jamie says:

    I’m pretty happy about this. I hated selling on Falling Pixel + TurboSquid back in the day. I felt like I was competing with myself, and forcing the two sites to compete over me. This might just be my point of view, but I love the fact that TurboSquid handles the business from end to end.

    There’s nothing worse than getting an email from a customer demanding “a fix (whether it’s user error or not) before EOD or money back” at 2pm while at your day job. I LOVE that fact that TurboSquid will take care of that for me, and contact me with a simple ticket stating the issue (if they can’t resolve it).

    I’m also not a fan of managing assets across different sites, so thanks TurboSquid! I really feel like it’s a win-win situation.

  8. Plutonius3d says:

    Michele Bousquet,

    Of course I sell nowhere near as many models on my personal site then Turbosquid. Of course customers are going to need robust support options such as conversions. I hope I was not implying this. My only issue is the lower royalty rate forces myself to raise prices and lose a bit of a competitive edge. As such, I lose a significant amount of flexibility when it comes to price adjustments.

  9. ExTSsupporter says:

    Until the merger with exchange3d, an artist could get up to 75% royalties. At another marketplace unaffiliated with TS, The3dStudio, an artist gets a flat rate of 70% simply for agreeing to sell content for at least 1 year… without having to sign an exclusivity contract!

    Understandably, this is a business. As equally significant, each artist is trying to maintain his/her own business. We, the artists, pay you a fee for allowing us to sell our content at your established marketplace. In that sense, you work for us. At what point did it become the other way around? Were it not for artists supplying the content, your market would be of no consequence in the industry.

    Royalty rates at 40% for non-exclusivity and a cap at 60% are both extremely too low. That didn’t have to be put into text, really. The acquisition of FallingPixel and Exchange3D marketplaces will not prove to expand, only to force both of them out of the market as artists pull their content. What residual income they do manage to procure through the cross-platform hosting of content will not be anywhere near what they gained on their own.

    Now that both of the other marketplaces are adopting the rates, there’s no reason to bother. Quite frankly, the numbers suggest that only TS would prove to gain from this. Not the other marketplaces or the contributing artists.

    Will there ever be a reconciliation between your revenue and what is right for contributing artists?

    Post edited to conform with our Code of Conduct

  10. Michele Bousquet says:

    First, a fact check: The3dstudio agreement is to keep your models up for 5 years, not 1, and in their Help I don’t see any mechanism for cancelling if you change your mind. Compare with the SquidGuild, which you can leave at any time with 30 days’ notice.

    TurboSquid’s royalties are 40-60%, allowing us to plow our take back into getting customers. We actively go out and find production artists who either don’t use stock 3D, or used to use stock 3D but stopped for one reason or another, and get them buying stock 3D instead of making things themselves. These customers weren’t buying from any marketplaces at all until we got them back into the game. That is why our sales are higher than other sites.

    Ultimately, we had a choice: offer higher royalties and then have little to no resources for growing sales, or offer our current royalty structure and have the resources to woo customers and grow sales. We chose the latter. Some of these wooed customers go and shop at other sites, too, but that’s fine with us. Growing the industry as a whole is one of our main goals.

    We have heard the argument before that certainly we could still have the resources to grow sales even if we had a higher royalty rate. Other sites with higher royalties have been unable to touch our volume of customers and sales; you can reach your own conclusions based on that. We consider our relationship with artists to be a partnership. We go out and find the customers so you don’t have to, and we can do this if only we have the resources to do so.

  11. Femi says:

    I think the problem here is that some people don’t understand what it takes to scale and maintain a business. Personally I think TS have a right to charge the fees that they do because it is necessary for them to survive as a business. For the artist it will eventually be a win-win situation because most people are more comfortable buying from a recognised brand and their assets are more likely to sell greater volumes. The argument here is one of volume over value and in business volume almost always beats value for income generation

  12. Shashank says:

    Great News, i just have one question (if i might have skipped on something above), will the Royalty rates be revised for benefit of the sellers in the coming months for the seasoned artists or artist with extensive collection at TS and the Squid-Guild Artists? Thanks.

  13. Chris says:

    What I want to see are these things implemented ASAP.

    1) Proper names for Authors, not JoeCracker etc. That does not give me confidence to buy.
    2) A clean up of TS to get rid of pirate models. That would give you credibility.
    3) A customer bill of rights, that clearly states, that the model’s I pay for are NOT pirate.
    4) Validation of every model uploaded that its not pirate. That gives us both relief.

    Those things a) i’ve been waiting for a long time. b) Would make you a ‘serious’ business.

    If you want to get back and attract new customers and are serious about that,
    those points ARE the only way forward to get the business serious & professional.

    I state this in all sincerity as a customer, who has purchased, who is concerned about getting legal work, and as one who values the efforts of legitimate artists.

    Chris

  14. ExTSsupporter says:

    @Michele Bousquet: you’re absolutely right. I was incorrect about the duration of the T3DS contract and it is indeed a 5 year deal. However, with an increase to 70% royalties WITHOUT having to agree to exclusivity (meaning that I could join the MLP and still sell here and elsewhere), I see no reason to worry about the difference. Of course, under the contract, the terms are clearly defined so there wouldn’t be a mechanism for cancellation due to the agreement being focused on the 5 year span… unless one were to simply approach Matt Anderson personally with a request for cancellation.

    The TS royalty rates between 40 and 60 percent are justified because this is your marketplace. The rates may not be embraced by the majority of contributing artists but who cares. As long as the income flows, the system works. Ethics, however, may conflict here but, again, who cares.

    Someone elsewhere made the point that, if TS were a real estate agent taking a 60% commission on sales, it wouldn’t stay in business long. Obviously we’re dealing with a different scenario as there’s really not a great deal of competition in this industry – yet – but that’s where attempts can be made to buy-out the competition and subsequently control the market. However, in doing so, TS has managed to effectively place The3dStudio as a primary competitor that is unwilling to merge.

    Would it really hurt TS that greatly to, at least, offer 20% higher royalties to the artists? I’m not asking simply because I’m interested in your business but as a prior member artist.

    As for how the TS revenue is spent: It doesn’t particularly matter to me how the money is invested or if it’s merely pocketed. It’s your business. The only problem I’ve got is how tales are spun. According to advertisement, TS is the highest selling venue. Perhaps by volume, yes, but from the perspective of the individual contributing artists, hardly the case.

    In closing: there is competition out there and there will come a day when the TS royalty practices will either bend or break. The question is: does TS wait to be forced to make a decision at that point or reassess its’ practices now to save-face? I could speculate…

    Posted edited to conform to TurboSquid Code of Conduct

  15. Michele Bousquet says:

    As for how the TS revenue is spent: It doesn’t particularly matter to me how the money is invested…

    I believe this should matter. There are two types of structures a 3D marketplace can have: our current royalty structure, which gives us resources to invest in growing the customer base (and the industry as a whole; many customers that we hustled for ourselves spill over to other marketplaces), or a higher royalty rate and no resources to grow the market. Artists can actively choose which type of marketplace they’d like to work with.

  16. Michele Bousquet says:

    @Chris: Thanks for the input. We’re working on these items, and I hope you continue to notice improvement as time goes on. As the marketplace has grown, the challenge has been to work out new, scalable solutions to these problems.

  17. CGAndy says:

    The real estate analogy makes no sense in relation to this marketplace…

    Real estate is typically a ridiculously HIGH PRICED, ONE-TIME sale with which a very small percentage makes a nice little bit of change…

    As for competition, well, there is a ton of it out there if somebody googles 3D assets/models/textures and has been for many years. Seeing how many of those things come up as Turbosquid results does not mean that there is little competition but is a tribute to the success of TS search engine campaigns (which is where part of their revenue goes).

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