Transcript of the call with analysts

http://seekingalpha.com/article/3971237-shutterstock-sstk-jonathan-oringer-q1-2016-results-earnings-call-transcript

"Content matters is something you've heard us say consistentl...With over 100,000 contributors submitting content, we continue to build scale while ensuring our content remains fresh and hot. During the first quarter, we added nearly 10 million high-quality inputs (03:00) for our royalty-free library, twice as many as we added in Q1 of 2015. And Shutterstock now provides over 81 million photos, vectors, illustrations to customers of all types and sizes.

We also continued to expand our unique video offerings with over 4 million video clips, 62% growth from a year ago. ... it's not just the size of the library, but also the quality and diversity of our offering that's being embraced by the creative community."

"Over 1.5 million customers downloaded content over the past 12 months, and we continue to see remarkably high level of revenue retention, with rates exceeding 95% over the past year."

"We now have nearly 28,000 Enterprise [accounts] (06:42), up 80% from the same period a year ago."

"We also saw a 23% increase in paid downloads, primarily from new subscribers but also from a higher level of activity across our existing subscriber base, in conjunction with the new monthly download limit we introduced during the second quarter of 2015"

"Currently, 40% of our revenues are from customers in North America, 34% from European customers, and 26% from the rest of the world. Each of these regions is growing at double-digit growth rates for us, and we continue to see strong momentum in nearly every country and region, including most notably, India, Korea, and Germany."

Jon Oringer was asked about getting customers to adopt the new Editor tool and his answer covered their "tech migration" as well:

"One of the things that's holding us back right now that we continue to work on and we'll be done with a lot of this, this year is our tech migration. We're spending a lot of effort right now moving our tech stack to a services-based architecture set. All of our property and all of our product can be within this one tech stack, and we can use all of our available technologies across all of our products. So, while we're even focused on doing that, we still released some amazing stuff like Editor and like Reverse Image Search. We continue to learn, and we're going to continue to innovate from there."

An analyst asked about Enterprise as a percentage of total revenue and the CFO said:

"What we've said in the past was it was in the low to mid-20%s. It accelerated from there to be between slightly over 25%. And we certainly expect it to continue to grow, given the opportunities we see both at existing and new customers."

Talking about markets in which SS is growing, the CFO said:

"So, as it relates to some of the markets in which we're expanding, Korea and India ...We have not historically been � had a large business there. And so, our growth rates have been significant. We're just hitting a great user base in terms of both larger-sized enterprises as well as small and medium-sized businesses in those markets.

We have been relatively strong in Germany, and we continue to see strength. We have an office in Berlin, aggressively pursue the European market with our team there and continue to see opportunities across both Western and Eastern Europe to further expand. Asia-Pacific remains a significant opportunity,...."

Some press coverage - seems to be viewed as a positive report. Price pressure produced a 10 cent drop in per download revenue. If Adobe's hurting them, it's not immediately obvious?

http://www.fool.com/investing/general/2016/05/04/shutterstock-comes-into-focus-with-strong-earnings.aspx

http://sonoranweeklyreview.com/shutterstock-q1-exceeds-projections-on-eps-and-revenues-affirms-revenue-guidance-nysesstk/

I have to guess that the collection size is just for marketing messages (and it's a risky strategy IMO to rely on your search to hide the piles of rubbish from buyers). Messages of the "We're bigger than Adobe Stock" variety - some analysts had been describing the two libraries as essentially the same content while AdobeStock was cheaper. If you can say that yours is 50% larger or twice the size, perhaps that's seen as an effective way to deal with that investor worry?

... is there any problem if I submit as RM (and restrict it to Editorial) pics that were submitted as editorial only on other sites?

Don't confuse editorial (versus commercial or creative) with the license type - rights managed or royalty free.

 If you have images on the micros as editorial, that's with an RF license. The user has a worldwide, perpetual license for the allowed uses. In that case you can't know what uses the license purchasers have, so you can't account for those to a future RM licensor. So they might ask if the image has been licensed for use in Germany and you would have no clue.

Alamy is planning to allow for RF editorial, so you should wait for that.

http://wherewestand.gettyimages.com/advocacy/?esource=2016_4_ALL_GI_GoogleComplaint_EN_SEG

I received e-mail about this from Getty. I don't see any articles about it yet.

I guess the earlier strategy of embracing sharing but trying to make money from it via the embedding in blogs for free, the Yahoo metadata deal or the Google Drive deal has been abandoned?

I just watched the Premier video and it mentioned - separately from access to Offset images - among the benefits "...as well as new content exclusively available to premier users"

What does that mean and where does that new content come from if not from submissions to Shutterstock?

I assume this has something to do with Premier Select, but does this exclusivity just last for a short time or is it permanent? There'd have to be a lot of business from Premier users to be willing to give up entirely income from "regular" SS customers. Giving them a 3 month window would be a lot easier.

As I don't recall anything here from anyone about being in Premier Select, I have to assume part of the deal is that people aren't allowed to discuss it if they are included.

Your monitor should be calibrated with a profile - it doesn't  matter which one as long as it's accurate. Then every image must be saved with its profile. If you edit in one profile and deliver to the agencies in another, you must convert to profile (not assign) and save the JPEG with its profile

Essentially you need a color managed workflow. If you're just matching a specific printer, that won't do

I don't think you could get any of these images accepted at an agency. Noise isn't the issue

As you realized, you cannot have business names or identifying numbers (license plates on cars, numbers on boats or planes). Even if the image is sharp somewhere, the lighting needs to be good and the choice of aperture needs to suit the subject.

All of these images are very dull, and even if you perked them up a bit with post processing, you still have really uninteresting light on subjects that aren't commercially useful. Shooting an abandoned building at f/4 is probably not ideal - having a bit more of the image sharp would be better for stock.

Composition is something else you should look at. Plunking a small plane in the middle of a large image of a cloudy sky isn't good.

For anything you're planning to shoot, do a search of that subject on Shutterstock sorted by popularity to see what sort of images sell and what they look like. It might help

They've lost the plot!

From one of my images, the totally useless blurb says "Clouds And Vivid Sunrise Colors Over Boston Harbor is a photograph by Jo Ann Snover which was uploaded on April 24th, 2014.   The photograph has colors ranging from bazaar to dark byzantium and incorporates boston harbor, new england, and boston design themes.

I don't think it incorporates any design themes, but the title says as much as their invented "themes".

Another image of a Mayan ruin has the color range "cinereous to dark jungle green". I think I have a good vocabulary but I had to look up cinereous (it's ash gray). How does putting in colors virtually no customer will have heard of going to sell prints, let alone the other crud they sell?

Increasingly glad I let my paid membership lapse...

Could be a coffee table book, or something like that.

But surely you don't need an extended license for a book? Unless it's a print run related issue.  Products for resale clause from license:

"No Products for Resale. Unless you purchase an extended license, you may not use content in connection with any goods or services intended for resale or distribution where the primary value lies in the content itself including, without limitation, cards, stationery items, paper products, calendars, apparel items, posters (printed on paper, canvas, or any other media), CDs, DVDs, mobile applications or other items for resale, license or other distribution for profit. This includes "on demand" products (meaning products in which content is selected by a third party for customization on such product on a made-to-order basis), including, without limitation, postcards, mugs, t-shirts, posters and other items"

Pond5 support replied that their accounting team has "verified all required information, so that Paypal can transfer the funds that we paid you today. Paypal has assured us that the hold should be released within the next 24-48 hours."

I also contacted Pond5 support to let them know what had happened and to ask them to help resolve this ASAP

I wrote to support yesterday (about a batch of 51 uploaded March 31st) and asked if I should upload in smaller batches. I got a very polite reply this morning that my images would be reviewed soon and they were all approved when I went to check.