Thanks to Adobe Stock gross microstock revenue will start to decline. Let me explain why. 

I estimate that about $143 million of Shutterstock�s 2014 revenue came from subscriptions. Based on the $0.25 to $0.38 they are paying in royalties for subscription downloads and the fact that they say they are paying out 28% of the revenue they receive in royalties, it seems that they are earning about $1.25 for each image downloaded through a subscription. Thus, total subscription downloads were in the range of 114 million images for 2014.

We know that many of subscription customers don�t actually use all the images they download in projects. They download extra images that they use in the design stage of their projects, or maybe just to have on hand in case they might be used in a project in the future. Because it is all part of the subscription price that allows them 750 downloads per month there is no additional charge for downloading these extra images.

The big question, and the critical issue as we look ahead at the Adobe Stock offering, is how many of these 114 million images were actually used in projects. Nobody, not even Shutterstock, knows.

With the new Adobe system customers can store extra images they select in the Adobe Creative Cloud, use them during the design stage of a project, keep them there for reference just in case, and not have to pay for any they downloaded until an image is actually used in a project.

It costs Shutterstock subscribers $2,388 for a year�s subscription. If we assume that everyone subscribes for a year that means that Shutterstock has about 59,882 subscribers. (Obviously, some subscribe for less than a year so this number will vary.)

Let�s assume that these subscriber really only use an average 10 images a month (120 per year). It they switched to Adobe Creative Cloud they would pay $360 a year instead of $2,388. Gross revenue if all 59,882 were to make the switch would be $21,557,520 instead of $143 million. Suppose they use, on average 240 images a year, gross revenue paid out to Adobe would be about $43 million instead of the $143 million to Shutterstock. That�s $100 million in savings for the customers.

Another way to look at it is that the average Shutterstock subscription subscriber downloads about 1,900 images a year. Suppose these customers only use 1 out of every 3 of the images they download, or 633 per year. They can save money with Adobe and still have access to all the same images. At $2.99 per image they would pay Adobe $1,894 instead of $2,388 and they save additional money for every image less than 633 that they use.

A significant percentage of the Shutterstock images are also available on Adobe Stock. If the customer can�t find what they want on Adobe they can always go to Shutterstock and purchase what they need as a single image for about $10.

Of course, all of Shutterstock�s subscribers are unlikely to switch, and the switching will occur over time (a year or two), unless Shutterstock can do something to counter Adobe�s advantage.

But it is hard to see how Shutterstock can offer a cloud option that so perfectly integrates with Adobe�s other products, and even if they could one would think they would need to match Adobe�s pricing. Consequently, it is hard to see why a significant number of Shutterstock customers won�t eventually switch to Adobe.

Anyone want to make a guess as to how many of that 114 million downloads were actually used in projects?

this is possibility, good post, probably because of that,  they "rise" our rankings, im 100% they didnt begin to respect us.

we have very simple weapon, we can  close accounts on fotolia.

we know what to do.

I don't think a relevant amount of SS customers will move to Adobe.

I do believe in FT and SS taking market share from IS and the small agencies, which is great.

this is possibility, good post, probably because of that,  they "rise" our rankings, im 100% they didnt begin to respect us.

we have very simple weapon, we can  close accounts on fotolia.

we know what to do.

Once adobe gets going all images downloaded and not purchased will be available to the user indefinitely, how then do you close your account?

fotolia is 15% of my income, i can live without 15%

if they destroy market, we must close accounts, there is no other option.

but they still have and keep selling your images regardless of account closure.

fotolia is 15% of my income, i can live without 15%

if they destroy market, we must close accounts, there is no other option.

You start first.

Lots of assumptions that I would guess are way wide of the mark - in a way that makes Adobe's ability to convert SS's customers much harder.

1) The companies who like subscriptions are those with budget folks who want certainty. Even if you download 10 images most of the time, what about the few months when you want more? The subscription eliminates all the budget surprises and overhead of seeking extra funds for exceptions. Not to mention the business team subscriptions (I assume SS introduced those because of user requests). Central control over how many subs each team gets and how many seats you have a license for

2) The point everyone else has made is that other than Adobe's watermarked comps are larger, there's no real difference from anywhere else. Also, with SS's corporate deals, although they've refused to disclose license terms, they have said that one of the benefits clients get is unwatermarked comps while only paying for what they use in the final pieces.

3) Do some searches on Adobe and SS for a variety of terms (and get a bit specific so you're not looking at hundreds of thousands in both cases. Adobe just doesn't have the coverage SS does - and that's even for photos. No footage on Adobe for the time being. The minute you start buying multiple places, the complexity (budget and digital asset management) goes up again - the very thing companies want to avoid. As I understand it, Adobe's management of digital assets will only apply to things purchased from them, so they don't have a simple workflow any more if they have to buy things other places.

4) Integration with Adobe products of the choice and purchase of stock images is nothing like as big a win as it would have been once - managing the assets is hard and important, but the act of selecting and downloading  really isn't, especially if your DAM is WebDAM and you've organized around it already (and I don't know much about how widely used that product is; they say they're the leading DAM but that could mean 50 customers if that segment hasn't really taken off).

Alamy had a go at trying to manage this problem - multiple departments buying the same thing and tracking who had a license for which images - and I don't know how well they did, but they're not the leading agency (except perhaps for UK newspapers).

Given that users have apparently been managing to buy and download their stock images/illustrations/videos for over a decade without integration with Photoshop/Illustrator/InDesign, it's not at all clear to me that they'll just drop what they've been doing and run to a new provider because of a built in search and some asset management for some of their assets.