Shutterstock – what is in it for them?

I think we can all agree that the new Shutterstock earnings schedule has been implemented in almost the worst way possible. Throw it over the wall, make a mistake in the email. Allow a low level forum person to give a few answers to legitimate questions, then say nothing more. Ignoring the way it was done, I’ve been thinking about this some more from Shutterstock’s point of view, which I think is important if you are going to decide how to handle the changes.

I think they have really made several major mistakes over the years and this is their “last ditch” effort to right the ship. Their stock price has gone nowhere at the same time that the US market has soared over the past 5 years. Stock price gain is a massive part of the incentives for employees and especially senior management in this type of company. They have taken on tens (hundreds) of millions of useless images and videos which are both costing a lot in terms of storage, but also are making their search efforts difficult as customers don’t want to scroll through meaningless variations of the same image. Finally, they encouraged thousands of new contributors with a very lax quality test, and now they have to review all of those new images which again adds to their cost. And, finally, they had an old policy from the early days where they paid contributors who had earned more money over the years a higher fee for their images. In those early days, it was reasonably easy to make the $10K earnings threshold because there was much less competition and generally higher prices.

In parallel, their world is changing as well. Photography has been made far easier such that anyone, anywhere can produce a half decent image of something or somewhere. They don’t need an expensive camera – they don’t need anything other than their phone. And, the culture online has moved heavily towards social media acceptance and praise – with likes or comments. Shutterstock didn’t cause any of that – it is just part of a massive global trend. All those new photographers uploaded their images (and many of them are full size images) because they wanted followers and likes. Enterprising companies came up with a plan to allow them to get loads of likes and a real measure of their skills as photographers by allowing others to download and use their images for free. What better sign of the quality of your images is there – you will see your image in print perhaps!

Finally, Shutterstock tried to react to the free image trend by offering larger subscription packages that made the cost of each image even less. I believe with the largest pack, the cost per image (if the subscription is used) is 22c. Income 22c, outgoings 38c – result, bankruptcy.

So they needed to do something. Some of us thought that they had manipulated their search algorithm to deter buyers from choosing an image which would cost them 38c. Maybe they did that – we will never know. But now, ideally, they would like to get rid of some of the useless (to them) contributors, get rid of the fixed download payment to contributors that is often as high as their income for that image, and maybe pay people based on their current usefulness to Shutterstock. They also need to keep modifying their pricing to customers so that buyers continue to pay for the surety that the image is going to legally available for the use they need, otherwise more and more buyers will go to Upsplash and the other free sites. I increasingly see articles on various websites (professional ones with paid writers) using Upsplash images which is a real bad sign for stock imagery in general.

I think we also need to be honest about our value to Shutterstock – an agent for a Hollywood star needs to be 100% focused on meeting the needs of that client (their contributor). An agent for 1 million varied contributors around the world, needs to think about getting the maximum revenue from buyers and meeting their needs and then they think about how to distribute some of that money to the contributors. Yes, they are selling our content, but there are so many of us that few of us have any power at all if we are honest. And so their plan to base payments to contributors on the price they sell the imagery for makes sense to them. They do want to incent people to upload new relevant content that sells and so they came up with a plan to increase that percentage for artists with a current track record of producing content in demand. They screwed up that incentive with the reset in January, but perhaps their next action will be to say that they made a mistake on that and they have listened and will change the reset approach! Get the rabble to accept 95% of what they want by giving way on something that isn’t that important to them?

And, coupled to all this, we still don’t know what the impact will be in June. Maybe (and I think this is giving them too much credit), they gave a short notice so that the emotions get really high, but just 5 days later we see the reduction isn’t 50%, but 10%. Then we are all relieved!

Of course, there isn’t an answer here because we don’t know the facts yet, but hopefully this will have cast some light on what Shutterstock management may have been thinking.