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Author Topic: How does Shutterstock make money?  (Read 9781 times)

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« on: January 27, 2011, 04:43 »
If a customer pays USD 250 for 750 images in a month (which makes USD 0.33 for each image) where Shutterstock pays USD 0.33 for each downloads to contributors, then how does Shutterstock makes money?

« Reply #1 on: January 27, 2011, 04:47 »
Because the average subscriber will only download a fraction of his allowance any given month.
And as the Shutterstock subscription contains a daily (not a monthly) limit they can be sure that a lot of (corporate) subscribers will not use any of their quota on weekends and public holidays.

« Reply #2 on: January 27, 2011, 05:07 »
I have one year subscription in my dayjob. There were plans and breakdowns how to use every single download.
Plans were broken three days later and average use is cca 30%.

« Reply #3 on: January 27, 2011, 10:48 »
SS has been very smart. Back when they gave raises annually and were still raising subscription prices, they'd put the price up for the buyer, let that settle for a few months so they could track buying patterns and then announce contributor increases. They apparently have been able to  get decent stats on usage patterns that hold up - probably because of the large volume of subscribers.


« Reply #4 on: January 27, 2011, 11:37 »
It's really an interesting concept. They make money by not selling product. (Not entirely true -- their product is subscriptions not images).

What if you could get suppliers to fill your warehouse with goods, with an I'll pay you later promise.
You charge customers a fee for 'all you can use' (knowing the majority of customers really can't or won't consume the full allotment).
You collect their money up front, and bank it.
You don't pay the supplier until 45 days after the purchase. (can you say 'compound interest')
Set minimum amount owed to suppliers knowing not all of them will get to that level each month (and some never).

Oh and let's not forget - (not that SS has done this - like some have) You can change the amount you want to pay suppliers at any time you like (usually in a downward fashion).

It's almost like a license to print money.

Kinda make you wish you'd thought of this 10 years ago.

« Reply #5 on: January 27, 2011, 13:16 »
Banks have done something similar for generations. They promise to look after your money, then as soon as they have it they lend it to someone else at interest, and since that someone doesn't use it all at once, they then lend some of it out again to someone else, for more interest.

« Reply #6 on: January 27, 2011, 13:31 »
You don't pay the supplier until 45 days after the purchase. (can you say 'compound interest')

...Kinda make you wish you'd thought of this 10 years ago.
Good description of SS's business model. But if you had started SS ten years ago, with the expectation of making money from interest, you would be in trouble today. The amount of interest you would be earning now is a small fraction of what you would have expected back in 2001. Who would have predicted then that a 1 year CD would be paying 1% interest in 2011?

Maybe that's one reason why SS has stopped giving us raises? Maybe if the Fed ever stops keeping interest rates near zero, we will get a raise to .39 at SS. :D


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