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Author Topic: Shutterstock Q2 Profit Rises  (Read 15451 times)

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Tror

« Reply #100 on: August 14, 2013, 04:54 »
+1
I've said this before the last time a raise came up - SS can keep the raise provided they continue to open up the BRIC countries and others - which is increasingly evident by the results on my download map and creating opportunities for me to earn larger royalties as with single/other downloads.

Shutterstocks _PROFIT_ was increasing. Profit is the money you keep in your hands and spend for your own joy AFTER the deduction of expenses. Which means: this money is not used for expanding any market, may it be BRIC or whatever nor does it help SS in any other way. It is just about shareholders satisfaction and  their greed. Too, this shows that SS would not need to increase prices to give us a raise if they would be ok with a little less profit _increase_or the same Profit as the Q before.



« Reply #101 on: August 14, 2013, 05:21 »
+1
Why is shareholders getting an income on investment  dividend greed and photographers asking for a raise not? SS are doing a good job for shareholders and opening up markets. Do you think if they were losing money it would be a good thing?

Ron

« Reply #102 on: August 14, 2013, 05:23 »
0
I am not drawing a line anywhere, and your pricing of 5000 was artificially overpriced. There has been an excellent discussion about that between Baldrick and Shudderstock. I just made a point that it the royalties were higher once.

  No it isn't. I sold many licenses for those kind of numbers, but that was back when everything was film, and clients wanted unique images that a competitor couldn't use. The clients don't care anymore because there is no way to justify a high price for restricted use.
Right after 9/11, i sold an American flag image to a national publication to use in their masthead. They paid me $25,000. ( and they never even used it ). Prices were indeed higher once. But the genies' out of the bottle, and isn't going back in.
Because you sold at those prices, doesnt meant that it wasnt artificially overpriced. Thats how a cartel works. CDs were kept at 40 guilders and later at 25 euro (50 guilders) when they should have cost 50% less. In fact the CDs only went up in price while everything else became cheaper. This is why people started downloading torrents. They were no longer accepting these artificially high prices. Until Steve Jobs jumped in and made a deal to offer music for 99cent per DL.

Ron

« Reply #103 on: August 14, 2013, 05:27 »
0
Why is shareholders getting an income on investment  dividend greed and photographers asking for a raise not? SS are doing a good job for shareholders and opening up markets. Do you think if they were losing money it would be a good thing?
Its called greed because they are squeezing the contributors. The royalties were reduced by about 60% over the last 7 years whilst some people lined their pockets. Contributors are asking for a bit of that royalty back now it turns out that the company is making more and more profit. As Tror said, they are not losing money, they might get a little less profit.

« Reply #104 on: August 14, 2013, 05:42 »
0
I've said this before the last time a raise came up - SS can keep the raise provided they continue to open up the BRIC countries and others - which is increasingly evident by the results on my download map and creating opportunities for me to earn larger royalties as with single/other downloads.

Shutterstocks _PROFIT_ was increasing. Profit is the money you keep in your hands and spend for your own joy AFTER the deduction of expenses. Which means: this money is not used for expanding any market, may it be BRIC or whatever nor does it help SS in any other way. It is just about shareholders satisfaction and  their greed. Too, this shows that SS would not need to increase prices to give us a raise if they would be ok with a little less profit _increase_or the same Profit as the Q before.

I see and understand your point but unfortunately businesses are not created for their employees/customers/suppliers/governments to make money. Nor are they interested in environmental impact/community support/values and ethics/equality and diversity or much else that is farted out by their PR/Marketing people. Their sole purpose is to increase the dividend paid out to their shareholders - everything else is at their discretion depending on individual country regulations which they will circumvent or trample over at every opportunity to increase/protect that profit/dividend.


« Reply #105 on: August 14, 2013, 05:42 »
0
Because you sold at those prices, doesnt meant that it wasnt artificially overpriced. Thats how a cartel works. CDs were kept at 40 guilders and later at 25 euro (50 guilders) when they should have cost 50% less. In fact the CDs only went up in price while everything else became cheaper. This is why people started downloading torrents. They were no longer accepting these artificially high prices. Until Steve Jobs jumped in and made a deal to offer music for 99cent per DL.

Well, I think Porsches are artificially priced high.  I should go steal one.

Ron

« Reply #106 on: August 14, 2013, 06:03 »
-1
Because you sold at those prices, doesnt meant that it wasnt artificially overpriced. Thats how a cartel works. CDs were kept at 40 guilders and later at 25 euro (50 guilders) when they should have cost 50% less. In fact the CDs only went up in price while everything else became cheaper. This is why people started downloading torrents. They were no longer accepting these artificially high prices. Until Steve Jobs jumped in and made a deal to offer music for 99cent per DL.

Well, I think Porsches are artificially priced high.  I should go steal one.
Thats not the point I am making, I am just stating a fact.

Tror

« Reply #107 on: August 14, 2013, 06:43 »
0
I've said this before the last time a raise came up - SS can keep the raise provided they continue to open up the BRIC countries and others - which is increasingly evident by the results on my download map and creating opportunities for me to earn larger royalties as with single/other downloads.

Shutterstocks _PROFIT_ was increasing. Profit is the money you keep in your hands and spend for your own joy AFTER the deduction of expenses. Which means: this money is not used for expanding any market, may it be BRIC or whatever nor does it help SS in any other way. It is just about shareholders satisfaction and  their greed. Too, this shows that SS would not need to increase prices to give us a raise if they would be ok with a little less profit _increase_or the same Profit as the Q before.

I see and understand your point but unfortunately businesses are not created for their employees/customers/suppliers/governments to make money. Nor are they interested in environmental impact/community support/values and ethics/equality and diversity or much else that is farted out by their PR/Marketing people. Their sole purpose is to increase the dividend paid out to their shareholders - everything else is at their discretion depending on individual country regulations which they will circumvent or trample over at every opportunity to increase/protect that profit/dividend.

I generally agree but wopuld want to limit the definition of businesses to "shareholder businesses". And exactly this is what I critizise. I think any wallstreet business has the potential to bleed out the roots of its own existence - may it be nature, environment, contributors, quality, healthiness of food etc. Familiy business are very often very friendly and humble. Look at FAA. Nice people. Zero problems.

« Reply #108 on: August 14, 2013, 11:51 »
-1
"adding fresh content"

Good lord, how much fresh content do you need?


Enough to successfully implement fancy new search ranking algorithms.  SS received a huge influx of new files from new contributors. Some of them former IS exclusives who will for a time receive lower royalty rates. Now who do you suppose receives a higher ranking in the new ranking algorithm? It also explains why the RPD is higher and why they are asking contributors to make video's that contain carrots to attract new low pay tier producers.

Revenue per download Three Months Ended June 2013 2.33 vs Revenue per download Three Months Ended June 2012 2.22

2013 Number of paid downloads 2013 46,700,000 / Images in collection (end of 6 month period) 2013 27,300,000 = 1.7 Paid Downloads Per Image in SS collection

2012 Number of paid downloads 2012 35,900,000 / Images in collection (end of 6 month period) 2012 20,200,000 = 1.7 Paid Downloads Per Image in SS collection
   
http://investor.shutterstock.com/phoenix.zhtml?c=251362&p=irol-newsArticle&ID=1845768

http://www.microstockgroup.com/shutterstock-com/entries-open-shutterstock-stories-$75k-artistic-grant-program/msg337904
Snip
which "unique stories of how creating and licensing visual content has affected people's lives - ranging from building a new business, to traveling, to quitting an unfulfilling job to be a full-time "creative," to learning new artistic methods, to helping families, etc...

http://bits.shutterstock.com/

Snip from SS tech blog
Now suppose you are so diligent that you keep rolling out A/B tests, this time testing a fancy search ranking algorithm. Two weeks later you see that there is a $0.10 increase in dollar spent per visitor for the test variant compared to the control (i.e. existing search ranking algorithm) variant. If the increase is real, with 100K visitors each day, thats $0.10 100,000 = $10,000 dollars extra revenue each day. Now, lets add a twist: you need five extra servers to support that fancy algorithm in production, and the servers cost $10,000 each to buy, and another $10,000 to run per year. You want to make sure its worth the investment. Your stats tell you that you currently have a p-value of 0.3, which most people would interpret as a nonsignificant result. But a p-value of 0.3 means that with the new ranking algorithm the net gain in extra-money-making probability is 0.7 − 0.3 = 0.4. With the expected size of the gain being $0.10 per visitor, the expected extra revenue per year is $0.10 100,000 0.4 365 = $1.46M dollars. The rational thing to do is of course release it.

EmberMike

« Reply #109 on: August 14, 2013, 12:48 »
+1
Enough to successfully implement fancy new search ranking algorithms.  SS received a huge influx of new files from new contributors. Some of them former IS exclusives who will for a time receive lower royalty rates. Now who do you suppose receives a higher ranking in the new ranking algorithm? It also explains why the RPD is higher and why they are asking contributors to make video's that contain carrots to attract new low pay tier producers...

That's a very short-term gain, though, at least per new contributor. And especially if we're talking about migrating istock exclusives. Any new contributor with an existing portfolio of good images is going to quickly surpass the lower tiers. It only takes $3,000 in earnings to get to $0.36, just 2 cents shy of the maximum.

If the goal is to simply make the next few quarterly reports look a little nicer, then maybe this strategy works. But I don't think SS is in the business of looking to short-term strategies for small, temporary gains. Just my opinion, and it's certainly not impossible that this is in fact what they're trying to do. Just doesn't seem like the kind of play they'd make.

« Reply #110 on: August 14, 2013, 12:57 »
0
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« Last Edit: May 12, 2014, 11:18 by Audi 5000 »

« Reply #111 on: August 14, 2013, 13:11 »
0
Enough to successfully implement fancy new search ranking algorithms.  SS received a huge influx of new files from new contributors. Some of them former IS exclusives who will for a time receive lower royalty rates. Now who do you suppose receives a higher ranking in the new ranking algorithm? It also explains why the RPD is higher and why they are asking contributors to make video's that contain carrots to attract new low pay tier producers...

That's a very short-term gain, though, at least per new contributor. And especially if we're talking about migrating istock exclusives. Any new contributor with an existing portfolio of good images is going to quickly surpass the lower tiers. It only takes $3,000 in earnings to get to $0.36, just 2 cents shy of the maximum.

If the goal is to simply make the next few quarterly reports look a little nicer, then maybe this strategy works. But I don't think SS is in the business of looking to short-term strategies for small, temporary gains. Just my opinion, and it's certainly not impossible that this is in fact what they're trying to do. Just doesn't seem like the kind of play they'd make.

Talk to contributors who have seen huge drops in the last few months and ask their viewpoint. Ask them what happened to their files which were on fist page searches.

And yes it will be short term and that is why they are asking us to help produce videos that they can use as advertising collateral to attract new contributors. How much of the advertising budget listed in SEC filings do you suppose goes toward attracting new contributors?

« Reply #112 on: August 14, 2013, 13:17 »
0
SS received a huge influx of new files from new contributors. Some of them former IS exclusives who will for a time receive lower royalty rates. Now who do you suppose receives a higher ranking in the new ranking algorithm? It also explains why the RPD is higher and why they are asking contributors to make video's that contain carrots to attract new low pay tier producers.
They've been getting a huge influx of files for a long time now, the amount of exclusives moving to Shutterstock is probably a small portion of that.  They have always had lower level contributors, from the very beginning, and it would have been more profitable for the last 10 years to promote them.  Maybe that's happening now but you haven't given any proof.  The other thing is that RPD (you use Revenue per download) doesn't go up if lower level contributors files are bought, profit goes up costs go down and revenue stays the same.  The files cost the same for the buyer no matter what level they are.

Check the link I provided.  SS uses Revenue Per Download in their SEC filings. They are describing an increase in revenue per file downloaded. And yes profits do go up if they sell lower tier royalty files.

We have never seen influxes of files as large as we did during the last quarter. 

« Reply #113 on: August 14, 2013, 14:14 »
0
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« Last Edit: May 12, 2014, 11:18 by Audi 5000 »

« Reply #114 on: August 14, 2013, 15:57 »
0
Why is shareholders getting an income on investment  dividend greed and photographers asking for a raise not? SS are doing a good job for shareholders and opening up markets. Do you think if they were losing money it would be a good thing?
Its called greed because they are squeezing the contributors. The royalties were reduced by about 60% over the last 7 years whilst some people lined their pockets. Contributors are asking for a bit of that royalty back now it turns out that the company is making more and more profit. As Tror said, they are not losing money, they might get a little less profit.

When did SS reduce royalties 60%?

« Reply #115 on: August 14, 2013, 17:23 »
0
SS received a huge influx of new files from new contributors. Some of them former IS exclusives who will for a time receive lower royalty rates. Now who do you suppose receives a higher ranking in the new ranking algorithm? It also explains why the RPD is higher and why they are asking contributors to make video's that contain carrots to attract new low pay tier producers.

They've been getting a huge influx of files for a long time now, the amount of exclusives moving to Shutterstock is probably a small portion of that.  They have always had lower level contributors, from the very beginning, and it would have been more profitable for the last 10 years to promote them.  Maybe that's happening now but you haven't given any proof.  The other thing is that RPD (you use Revenue per download) doesn't go up if lower level contributors files are bought, profit goes up costs go down and revenue stays the same.  The files cost the same for the buyer no matter what level they are.


Check the link I provided.  SS uses Revenue Per Download in their SEC filings. They are describing an increase in revenue per file downloaded. And yes profits do go up if they sell lower tier royalty files.

We have never seen influxes of files as large as we did during the last quarter.

Right but revenue doesn't change depending on which level the contributor whose files are bought is.  Pushing different contributors files up or down the search shouldn't affect revenue in itself.


Profits or net income generally imply total revenue minus total expenses in a given period, Net income for the second quarter of 2013 increased 13% to $6.9 million as compared to $6.1 million in the second quarter of 2012.

http://seekingalpha.com/article/1616602-shutterstocks-ceo-discusses-q2-2013-results-earnings-call-transcript

Snip
Expenses included Capital expenditures for non-recurring leasehold improvements related to headquarters office relocation of approximately $10 million.

Snip
Our cash balance strengthened in June 30 with $113 million. We generated $4 million of cash from operations in the quarter and capital expenditures was $1.9 million.

We continue to expect total capital expenditures for the full year with approximately $15 million, and this total CapEx is made up of two types, $5 million of which is related to ongoing computer server and network infrastructure cost to sort of run the business and expand the operations. And the remainder or about $10 million is related to a non-recurring combination of expenses related to leasehold improvements, furniture and related cost as we relocate and expand our primary headquarters office in New York City in the second half of the year.

Snip
Furthermore, we expect adjusted EBITDA to be between $11 million and $12 million in the third quarter. We are also increasing our revenue and adjusted EBITDA expectations for the full year of 2013. For the full year, we expect revenue to be between $227 million and $229 million, and we expect adjusted EBITDA between $48 million and $50 million.

« Reply #116 on: August 14, 2013, 17:44 »
0
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« Last Edit: May 12, 2014, 11:18 by Audi 5000 »


« Reply #117 on: August 14, 2013, 18:00 »
0
I'm not arguing whether or not they profited.  You said Shutterstock's higher revenue per download showed that they were messing with the search and putting lower level ex-exclusives first in the search, at least that seemed like the implication.  I'm just saying revenue isn't changed depending which files are bought (low level vs. higher level), even Shutterstock said the higher RPD is from selling more single image sales.

Yes I should have used net income instead of RPD

I posted SS own blog regarding search changes and mentioned inquiring about anecdotal feedback from long term submitters regarding huge drops in sales. Those that I know who have taken huge hits had many images on first page searches and the more competitive those slots were the more their ports were impacted.

I will leave it to you to visit a relevant number of first page searches to determine the tier which is now occupying those hard earned spots. I do know what I found in the slots which replace my previous long term best selling images on fist page searches. 

WarrenPrice

« Reply #118 on: August 14, 2013, 18:25 »
0
I'm not arguing whether or not they profited.  You said Shutterstock's higher revenue per download showed that they were messing with the search and putting lower level ex-exclusives first in the search, at least that seemed like the implication.  I'm just saying revenue isn't changed depending which files are bought (low level vs. higher level), even Shutterstock said the higher RPD is from selling more single image sales.

Yes I should have used net income instead of RPD

I posted SS own blog regarding search changes and mentioned inquiring about anecdotal feedback from long term submitters regarding huge drops in sales. Those that I know who have taken huge hits had many images on first page searches and the more competitive those slots were the more their ports were impacted.

I will leave it to you to visit a relevant number of first page searches to determine the tier which is now occupying those hard earned spots. I do know what I found in the slots which replace my previous long term best selling images on fist page searches.

I keep reading and wondering about all the threads on search algorithms and "first page" placement.  They all say pretty much the same thing;
the search has changed and it is killing my sales.

I've yet to read anything on what to do about it.  Is there some positive change that I can make to my workflow that will combat "poor placement" in searches?


« Reply #119 on: August 14, 2013, 18:27 »
0
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« Last Edit: May 12, 2014, 11:18 by Audi 5000 »

WarrenPrice

« Reply #120 on: August 14, 2013, 18:31 »
0
Take pictures of things that don't have a lot of search results.

OKAY!!!  Problem Solved.  Now we can move on to something more important.   ::)

« Reply #121 on: August 14, 2013, 18:34 »
0
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« Last Edit: May 12, 2014, 11:18 by Audi 5000 »

« Reply #122 on: August 14, 2013, 18:41 »
0
Take pictures of things that don't have a lot of search results.

OKAY!!!  Problem Solved.  Now we can move on to something more important.   ::)
What are you looking for?  There is no secret way to get your images placed first in the search results.

are you sure?

WarrenPrice

« Reply #123 on: August 14, 2013, 18:53 »
+1
Take pictures of things that don't have a lot of search results.

OKAY!!!  Problem Solved.  Now we can move on to something more important.   ::)
What are you looking for?  There is no secret way to get your images placed first in the search results.

I'm trying to agree with you.  Placement is something over which we have no control. 
The constant rants are pointless. 


« Reply #124 on: August 14, 2013, 19:04 »
+2
Take pictures of things that don't have a lot of search results.

OKAY!!!  Problem Solved.  Now we can move on to something more important.   ::)
What are you looking for?  There is no secret way to get your images placed first in the search results.

I'm trying to agree with you.  Placement is something over which we have no control. 
The constant rants are pointless.

I don't know about you but I like to know where I stand when making business choices. That is why I take an interest in SS SEC filings.

While you are right we have limited control over search placement.  We do have control over where we park our images.

It is no wonder Symbiostock is taking up more and more of the conversation on this board.


 

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