It's a thoroughly distorted market where the middleman has gained total control.  When a middleman is adding little value while charging excessive markup, 'disintermediation' should occur.  But the physical nature of this market (i.e. the internet) has so far prevented buyers and suppliers from making direct contact.

http://en.wikipedia.org/wiki/Disintermediation

It's a thoroughly distorted market where the middleman has gained total control.  When a middleman is adding little value while charging excessive markup, 'disintermediation' should occur.  But the physical nature of this market (i.e. the internet) has so far prevented buyers and suppliers from making direct contact.

http://en.wikipedia.org/wiki/Disintermediation

What a good post! and how true. I can not even think of any other business with the exception of the automotive industry where the middleman has gained so much power.
One could ofcourse argue that without them there would not be any micro industry.

""the middleman has gained so much power.""

I have thought for a while that symbiostock and stocksy could force a shift in the opposite direction for agencies. Stealing contributors from the big 4 would not take much.  Symbiostock almost hit the nail but lacks the front end web page, advertising and image screeners.  Stocksy has it but has a style and a self limiting mindset that keeps it from gaining a lot of great contributors.  Perhaps a mainstream (contractual) 60/40 partnership could derail the current middleman model and cause the masses of contributors to jump ship.  It just seems that in the crowded arena of agencies a massive need still exist for the right one.  No agency has hit the bullseye yet and any agency that sells all or part of itself or devalues itself with partner programs is just cashing in.

Everyone loves SS, but they decided to give profits to investors.  Everyone hates IS, but they actually pay better than SS (at least I think, 15%vs 25 cents).  IS could have been king had it not stumbled it's way through the last few years like crack addicts doing brain surgery with a machette.  I believe there is a massive need for the right agency.

With that said,  Shutterstock traded it's profits for a one time sale of 1/2 the company. A well known photographer left one agency and went exclusive to another and then started a crowd sourcing business. Another well known  (and highly respected) photographer changed his direction also.  This all indicates that those with insight see some kind of writing on the wall,  maybe it is a big sign that reads  "CASH IN NOW".  But maybe that could lead to stability.  I imagine that world famous photographer has a smaller staff now or will shortly.

Everyone loves SS, but they decided to give profits to investors. 

How? No dividends have been paid and neither is there a date for when that situation might change.

On the contrary SS have been using investors' money to expand their own operation as well as ours.

I can tell you why people love SS.

Shutterstock raised payouts ( a while ago, but has not lowered it since).
Income is predictable, if you work harder you can earn more.
Shutterstock is predictable.
The shutterstock site is easy to use.
Shutterstock doesnt lie.

Contrary to
Being lied to, being preyed on, being manipulated and abused with every message you recieved in the mail.

There is just so much difference.
It really is like the good guys and the bad guys.

Me neither. But I respect them.

I don't think the SS flotation indicated anything negative about the market from the agency's point of view. There's no reason why they shouldn't keep building their market - the problem is purely for the suppliers. If there are four times as many of us next year and we are all making half as much as we did, then that would mean the agency had doubled its earnings.
Falling earnings for suppliers actually benefit the agencies, who hang on to money longer before having to pay out.

Downloads per image on SS have actually risen from from 1.094 downloads per image in 2011 to 1.169 downloads per image in 2013.
While Revenue per download for Shutterstock SSTK rose from  $2.10 in 2011 to  $2.35 in 2013. 

It is telling how long term contributors with more experience, better equipment and often times better content are seeing revenue decreases while at the same time Revenue per download @ SSTK rose by $.25 cents.

It is also telling that many long term contributors are complaining about experiencing large drops when they should be seeing an increase in sales per image uploaded. 
                                                    Three Months Ended September 30,       
                                                                   2011      2013
Number of paid downloads                           14.8      25.4
Revenue per download                              $ 2.10   $ 2.35
Images in our collection (end of period)        16.2      29.7

                                                                  Three Months Ended September 30,       
Images in our collection (end of period)        16.2      29.7
Number of paid downloads                           14.8      25.4
                                                                  1.094   1.169

http://investor.shutterstock.com/phoenix.zhtml?c=251362&p=irol-newsArticle&ID=1874040

http://investor.shutterstock.com/phoenix.zhtml?c=251362&p=irol-newsArticle&ID=1759499

"Common sense tells me to quit when working on my illustrations no longer generates enough income to justify the hours I spend on it."

If that was the case for my images I would have stopped a long time ago...