https://www.prnewswire.com/news-releases/shutterstock-reports-second-quarter-2017-financial-results-300498083.html

SSTK closed at $34.37 Tues Aug 6, down $3.26 for the day, which suggests to me investors weren't happy with the results and/or their lowered guidance for revenue and earnings for the 2nd half. The market recovered somewhat today (DOW up 1.21%) so this drop was all about Shutterstock specifically.

Edited to add that the closing price on Fri Aug 9 was $34.54 - the price had recovered somewhat later in the week, but I guess investors settled back to what they first thought after Tuesday's report. Aug 12 closing price was $33.96 (but the market was down too).

https://seekingalpha.com/news/3487422-shutterstock-reports-mixed-q2-weak-fy-view

Couple of things I noticed.

-They say paid downloads increased over Q2 2018, but the absolute number of paid downloads in the quarter was down on Q1 2019 and Q4 2018 - 46.6 vs 47.2 vs 46.8. That is not now it went if you look at Q2 2018 versus Q1 2018 and Q4 2017 (45.2 vs 43.7 vs 43.9)

What that says to me is that in addition to filling the collection with image spam, the growth in purchases is slowing, both providing pressure on income of existing contributors.

-While the e-commerce/enterprise split is sill about 60%/40%, e-commerce growth was 6% in the quarter versus enterprise declined 0.2%

-In explaining the increase in operating expenses they mentioned "one-time severance costs". Not sure who or how many were severed...

I couldn't find a transcript of the earnings call (see link to one below), so I listened to parts of the recording (and that was a pretty downbeat experience - they talk about being excited in tones that suggest they're bored stiff). They talked about restructuring the enterprise channel and Jon mentioned getting back to our roots; thinking big and acting bold. The phrase "critical re-evaluation" was used to describe their look at the enterprise business. The new guy - Co-COO Stan Pavlovsky talked after Jon about how wonderful the company was, the people, the new "View in Room" feature; understoring their path forward... etc. Both of them were clearly reading from a prepared script.

The questions asked what was up with the enterprise segment: was there potential for growth, were there competitive pressures, was SS going to change pricing or offer new products or... I did listen to the responses from SS but they really have learned to avoid specifics and the analysts just say thank you. They did mention changes in how things were organized and in incentive systems. Several mentions of their "go to market" strategy, but I have no clue what that is.

There was some talk about making it easier for customers who purchase both images and video but no details about changes.

They're still looking for a new CFO - the previous one, Steven Berns, quit "to pursue other opportunities". His LinkedIn page shows his Shutterstock job ended in June, but not anything new.

Couple of interesting factoids mentioned in passing. About 1/3 of their revenue is in foreign currency, primarily GBP and Euros. Jon mentioned the term "data velocity" - new to me - in talking up how they're going to keep growing and fix whatever ails enterprise sales. He said they sell 6 images a second and that this was faster than anyone else. He did use the term images, so I have no idea if that includes video or not.

Shutterstock slides

http://investor.shutterstock.com/static-files/43c73326-25aa-4ad8-9306-d7f57ef87091

Edited to add a Motley Fool article on the reaction to Shutterstock's Q2 earnings report

https://www.fool.com/investing/2019/08/06/sales-slowdown-hits-shutterstock.aspx

They picked up on the drop in actual numbers of paid downloads Q1 to Q2. No one (in the general investing community) seems to have picked up that all these happy talk numbers about collection growth conceal the truth about the vast amount of garbage they've allowed in along with all the really good and useful content. I wonder if any enterprise customers have expressed frustration at the difficulty of sorting the wheat from the chaff...

Edited Aug 7 to add a link to the earnings call transcript

https://www.fool.com/earnings/call-transcripts/2019/08/07/shutterstock-inc-sstk-q2-2019-earnings-call-transc.aspx

Suspending forum privs for a little while won't hurt you, but closing your contributor account probably would. I'm not in any way criticizing you or defending Shutterstock's pathetic lack of useful measures to prevent upload of stolen content.

I just want to remind everyone, particularly those who haven't been around the agencies for very long, that the terms under which most agencies operate allow them to close your account at any time, for any or no reason, and you have no appeal process.

Getty was the most prominent of the "crush the uppity contributors" examples when they closed several high profile accounts during the 2013 protests over the Getty-Google partnership. Fotolia (prior to the Adobe acquisition) took a similar approach.

For those who want to pursue the agencies (who clearly could use some reminders that without contributors they have nothing to sell), just be aware of what the consequences might be for your income.

Do they mean they are updating their policy or actually abiding by the policy they already have....for those that don't get "waved through" inspection 

https://www.shutterstock.com/contributorsupport/articles/en_US/kbat02/000012339

From the end of the article, there's a paragraph that I think is addressing that topic:

"You may encounter instances in which your work was rejected even though there is similar content already exists on the customer site. Our collection is frequently evaluated and content that does not comply with our guidelines is removed. Intentional disregard of any of Shutterstock�s policies can result in account suspension or termination."

If I were to translate the above: We may never get around to removing the overwhelming amount of image spam we have permitted, but if you submit similars, we can close your account.

The way I think about the horrendous gap between the purchaser downloading the image and me getting paid is that it is covered by Alamy's higher prices. It's a very common business practice to charge less for payment up front (car rental or hotel) versus when you check in/pick up versus when the invoice arrives later.

The smaller sales with long-delayed payment are an annoyance, but I can live with that. I don't do distributor sales because I think it's a racket in the age of internet agencies and the distributor makes more than I do for essentially nothing. Fortunately, Alamy lets you opt out.

As an example, I got paid August 1st for a sale from 30 May that just cleared at the end of July. The longest was over a year (including several emails with Alamy support to remind them to chase the customer up).

I have had a few refunds, but not lots.

Apparently you got into a business you didn't understand. Insulting people who are trying to explain things - not defending them - isn't helpful to anyone.

If you're new to this, you'll get better and faster at editing the photos and handling metadata over time.

10 similars is going to get you a lot of rejections - not all agencies are equally strict, but you want to make selections based on usefulness (which equates to salability) not on how fast you can process the files.

Good images will sell for years, so the time to get it online isn't really an issue except for those image spam portfolios on SS, and there is no reason to try and be like them

I haven't tried contacting them, but I have a $20.80 balance sitting there with no new sales in nearly 2 years (but I stopped uploading there when sales stopped).

I was sort of hoping that if they shut down they'd pay their balances owed - it's not our fault their site is moribund and they should just pay us our earnings and shut up shop if they aren't going to actively manage the site.

They've been able to hang on to all those earnings for all those who haven't met the payout threshold - money in the bank for them to offset their operating expenses even if they aren't doing much beyond keeping the site up.

How about changing your policy on payout of balances to those closing accounts? Or reducing the threshold to $5 (to avoid nuisance payments for a few cents)?

Ironically:
https://www.shutterstock.com/blog/protect-your-content?fbclid=IwAR0tiYqNHX5ZEGGFY5FcCEf0RvAqdcHybIj8HC4MkCdzNM2O603HS6l42JQ

"We pride ourselves on the integrity of the content submitted by our contributors...."

Right. But that was said in 2014 - clearly a different time . . . to be judged by the standards of the day . . .

Goes along with "Your call is very important to us.."

Tossers!

https://about.canva.com/pricing/

Does that help?

Have a read

https://www.microstockgroup.com/newby-discussion/microstock-photography/

There is no economy of scale for the lawyer to make the work significantly less for handling a large number of low-value claims.

There's no class action possibility (in the US) for contributors whose work has been used without, or in violation of the terms of, a license

Given that, there's no sense in trying to pool resources to pay a lawyer.

The fundamental problem is that each violation is a small value item even if in total, the sum of all violations is large.

The only way this will change is with very expensive licenses (which is not the direction the business is moving in) or very large statutory fines for violations, regardless of the actual commercial loss.

It's the economics of microstock licenses that makes this situation hard to fight.

And that doesn't even deal with the issue of what list of countries are you going to pursue legal fights? Violators and contributors are all over the globe...

Write this off like "shrinkage" in retail. It's a cost of doing business.

...Both of these are efforts to keep users happy ...however we've become aware that there is a major downside which is a decline in contributor sales...

What planet do you live on that it didn't occur to them the Getty partnership and offering collections of free images would impact the sales of those who uploaded to Canva?

Really??

I'd take any soothing words about how they want to improve things with a truck load of salt. They're either not serious or so inept as to be incapable of implementing any remedy.

It's such a shame that a company with an honestly innovative approach - as opposed to all the Shutterstock wannabes with no marketing plans - turned out to be such a waste of space from a contributor point of view.