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Author Topic: Shutterstock Creates First Silicon Alley Billionaire  (Read 24414 times)

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« Reply #50 on: June 29, 2013, 11:25 »
-1
Some posters here seem to believe this was the only possible outcome, and that therefor we should rejoice in it, and enjoy Oringer's success vicariously.

which agency have paid you more $$$ since you started?

don't you think that an agency paying you the most every single month since the very first second that contributors submit their work proudly? impossible to have other feeling!

its hard for you to accept that SS took over microstock but in fact IS and all other agencies have made a nice job screwing it up lowering royalties and recently pricing cuts when SS maintained their strategy (actually they have increased it, not in my time but from reading other comments it started at 20 cents I guess)

sure I would love to have a 5$ RPD but I also believe that we need to get down to earth and see what competitors have been doing, at this moment you can try to adapt or continue complaining as you do so well ;D


Ron

« Reply #51 on: June 29, 2013, 11:27 »
+3


like others said in this topic, build your own site and wealth, I really don't think we can complain looking at ALL other agencies, would you have a reason to continue doing microstock without SS at this exact moment?
I dont agree with all these similar statements. Because Shutterstock does better than other agencies is no be all and end all. You need to judge SS on its own, not by comparison, because by comparison Shutterstock is great, I agree,  on its own they pay 25 cent royalty per sale. Give or take a few on demand downloads, but the majority of the downloads is subs. Lets take it the other way, if Shutterstock is doing so well with an average RPD around, then by comparison you cant complain at all about DT with one of the highest RPDs.

« Reply #52 on: June 29, 2013, 11:30 »
0
Ron you aren't being honest, who is having 25 cent sales? (this month I am close to 90 cents)

Noedelhap

  • www.colincramm.com

« Reply #53 on: June 29, 2013, 11:33 »
+2
I don't hate Shutterstock. In fact, I think it's the best microstock company out there. But being all happy for Jon because he hits the 1B $ mark is a bit silly while we contributors still make pennies for each download. Jon Oringer is not a hero or a god or a friend, so I couln't really care any less, as long as I make some money off of this.

like others said in this topic, build your own site and wealth, I really don't think we can complain looking at ALL other agencies, would you have a reason to continue doing microstock without SS at this exact moment?

I'm not complaining about SS, I'm just not personally overjoyed by Oringer's success.

« Reply #54 on: June 29, 2013, 11:34 »
+3
...The formula has been to force suppliers' prices below the floor, to the point where it's hardly worth continuing....
You always seem to forget the fact that istock didn't pay anything at the start.  SS has gone from only $0.20 to paying $120 for some sales.  My RPD has gone up with them every year.  They aren't perfect and I fear that they will pay us less in the future but that's mostly because so many people supply a site that pays 15-20% commission.

« Reply #55 on: June 29, 2013, 11:39 »
0
Ron you aren't being honest, who is having 25 cent sales? (this month I am close to 90 cents)
Just checked and my average is $0.91 this month.  That's the highest since I started in 2006.

Ron

« Reply #56 on: June 29, 2013, 11:42 »
+1
Ron you aren't being honest, who is having 25 cent sales? (this month I am close to 90 cents)
Nothing to do with being honest. I can argue that they are paying 25 cent. It takes about 3 years for most people to hit 38 cent these days if not longer. Doesnt take anything away from my comment. Look, I am happy with SS but sure would like a raise. Not because he is a billionaire, but because Shutterstock and all other agencies are raking in the cash over our backs and intellectual property. It doesnt sit right. Next comment is, that I myself agreed with the terms, but what did I know when I signed up. A year later and things certainly look different now, in a completely different perspective.

Ron

« Reply #57 on: June 29, 2013, 11:45 »
0
Ron you aren't being honest, who is having 25 cent sales? (this month I am close to 90 cents)
Just checked and my average is $0.91 this month.  That's the highest since I started in 2006.
Thats not the argument here, compare that with DT and read my comment a few posts back to Luis.

It so easy for a discussion to derail because someone quotes something out of context. No disrespect, just an observation.  :)

Tror

« Reply #58 on: June 29, 2013, 12:15 »
+1
...part of the huge success of Shutterstock was simply its timing IMHO. They had been in the right place at the right time with the right concept. And no, I do not think it has to do because Jon is a genius, because the site is so beautiful nor was it because of the good selection of the inspectors etc.

When I started 2004 with MS istock got a success along with shutterstock because they were simply first. All the sites which came after had less success with every step. It was followed by DT, Bigstock and Canstock and a bit later (if Im remember right) by Fotolia. Biggstock never took really off despite of its good timing because of the inicial license terms. (It was founded by a guy who needed shots for Homepage templates and istock forbade that in its terms, so he created bigstock with the permission to sublicense the photos - a lot of photogs didn`t like that and never joined initially - correct me if I am wrong).  However, nuff of that....off to the beach now for me :D


« Reply #59 on: June 29, 2013, 12:26 »
+3
Shutterstock has done well by not doing anything stupid. Dont get me wrong thats very impressive when you are first  ;D

« Reply #60 on: June 29, 2013, 12:41 »
+3
I don't see success as a vice, my father has a very large company of his own. He did not build it by exploiting suppliers or employees. The corp pay's fair $$$$$ to those who helped it succeed. While the company brings in more revenue than SS they have not pocketed as much, they return a larger % to those who helped them get there.

He could have gone public to pocket more money, but he chose not to because he knew what it would do to the people who helped him get there. How much money does any one person need to be secure, happy, content?

Can I get a job at your father's company? There are so few companies left out there that are willing to share the wealth with the people who help make it all possible.  :-\

Tror

« Reply #61 on: June 29, 2013, 12:47 »
+2
" But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother."

- George Orwell: "1984"


Yep never ending newspeak and doublethink.  One thing not mentioned in that article is the millions Jon made every year before going public.  He must have a nice stash besides the new billion.

The enforced wisdom of the thought police from the "SS thought crime enforcement brigade" is entertaining.

No one is ever going to brainwash me into thinking that .38 cents is sufficent return on investment for the type of images the micros asks us to produce to remain competative.  The return on investment is not sufficent, no matter how many copies they sell or the new markets they may break into.

Take a good look at the economies SS is entertaining and moving into. It is no coincidence that Jon is hosting dinners in Brazil and talking about Turkey in interviews. How low do you suppose submitters in the dark green zones would be willing to go?
 
http://www.numbeo.com/cost-of-living/gmaps.jsp


Why do you see success as a vice?


I don't see success as a vice, my father has a very large company of his own. He did not build it by exploiting suppliers or employees. The corp pay's fair $$$$$ to those who helped it succeed. While the company brings in more revenue than SS they have not pocketed as much, they return a larger % to those who helped them get there.

He could have gone public to pocket more money, but he chose not to because he knew what it would do to the people who helped him get there. How much money does any one person need to be secure, happy, content?


Can I get a job at your father's company? There are so few companies left out there that are willing to share the wealth with the people who help make it all possible.  :-\


So well said! But first we, the People, suppliers, we as Photographers have to stop to value abusive behaviour...not everyone who makes a trillion bucks with a wallstreet company is automatically a hero. We should stop identifying every commercial success with a successful (or happy) life.

« Reply #62 on: June 29, 2013, 13:32 »
+1
Ron you aren't being honest, who is having 25 cent sales? (this month I am close to 90 cents)
Just checked and my average is $0.91 this month.  That's the highest since I started in 2006.
Thats not the argument here, compare that with DT and read my comment a few posts back to Luis.

It so easy for a discussion to derail because someone quotes something out of context. No disrespect, just an observation.  :)

we aren't derailing but looking at RPD doesn't actually mean much because the totals are totally different comparing to other agencies, this month I have 20 times IS income and pretty much the same at other agencies, again I wish I had a 5$ RPD at SS but hey if there wasn't SS would IS or other agency be any better? its just impossible to put SS out of the equation because it is the number 1 since ever in my books

Ron

« Reply #63 on: June 29, 2013, 14:05 »
0
You are missing my point when you say its impossible to keep SS out of the equation, when my whole argument is about not comparing SS with other agencies and look at SS on its own. Why do you need to compare it with other agencies? If I understand correctly, you are happy with the 38 cent p/dl you are getting and asking for a raise is unreasonable. Some people dont agree with the comments here that we shouldnt complain because SS does better then other agencies. Its like saying Pepsi is healthy because Coca Cola is not.

« Reply #64 on: June 29, 2013, 14:40 »
0
its impossible not to compare because SS as a business have competitors and somehow they all change due to the different strategies approached along time, we as contributors have also competitors as you know, I have never said it is unreasonable to ask for a raise but looking at the microstock state its almost inevitable to say we are in fact lucky to have SS around, what income would we have without SS?

pretty much we are working for SS not for any other agency / pod , I have been contributing to a ton of agencies and many paying over 50%, I will keep on supporting those, until there is no better solution I will stick with SS and hoping for their best (wishing no pay cuts for contributors)

Ron

« Reply #65 on: June 29, 2013, 14:50 »
+1
but looking at the microstock state its almost inevitable to say we are in fact lucky to have SS around, what income would we have without SS?


That I agree with

« Reply #66 on: June 30, 2013, 00:25 »
+2
SS gained market share by offering low cost images & they increased revenue by driving cost per sale down. Over the last 3 years revenue per download is up.

@SS A one year subscription will net buyers 25 images a day, every day for $2,388.00 or slightly over $.26 cents per image.

@BS A one year subscription will net buyers 50 images a day, every day for $2,879.00 or $.16 cents per image.

BS Royalty rates


http://investor.shutterstock.com/phoenix.zhtml?c=251362&p=irol-newsArticle&ID=1817283



http://www.stockmarketstudy.org/wordpress/tag/sstk/page/2/

Ross Sandler Deutsche Bank

And are the unit economics for the kind of core Subscription versus the On Demand or   la carte versus the direct business? Those are kind of the three different things going on here. Are they roughly the same? Can you talk about like with that differential in growth rates whats that going to mean in terms of a contribution margin for you?

Tim Bixby

Yes, they are quite similar and weve structured it that way in the pieces where we have really have tight control, so for example royalties that we pay contributors is the primary cost of revenue for the company.

So our gross margin is about 60%, cost of goods about 40%. Of that 40%, 30% is essentially going to contributors for the images that we provide. So thats the same across all the pricing plans. The payout structure is slightly different but weve structured it so the net effective rate is roughly the same. Below the line below the gross margin line youve got some shifts between sales costs in a direct sales structure or marketing costs if were driving people to the website to convert on their own, but those are roughly in line as well and so which is an overall contribution line thats pretty comparable across almost every unit, almost every different pricing plan.

http://www.sec.gov/Archives/edgar/data/1549346/000104746912005905/a2209364zs-1.htm

Cost of Revenue

The Company's cost of revenue includes contributor royalties, credit card processing fees, image and video reviewer expenses, hosting and bandwidth expenses, amortization of content intangible assets, and depreciation of network equipment, which are the direct costs related to providing content to customers.

Additionally, the Company includes an allocation of overhead costs primarily related to payroll, insurance, and facilities expenses based on headcount.

http://seekingalpha.com/article/1417071-shutterstock-s-ceo-discusses-q1-2013-results-earnings-call-transcript?page=5&p=qanda&l=last

Lloyd - Deutsche Bank

Hey guys, its Lloyd in for Ross. I had a few if I may. Just first it looks like sales and marketing expense on a year-over-year growth basis actually declined, so seeing tremendous efficiency gains it looks like. Should we expect you to kind of reinvest some of those efficiency gains and see the growth in sales and marketing expense start to grow again?

Tim Bixby

So Ill take the first one first this is Tim on the sales and marketing spend rate. I think a good thing to look at, while the improvements year-on-year were you know, I think fairly dramatic I think if you look at Q3, Q4, Q1 you can see a more consistent pattern and a tighter range of spend versus revenue. And I think thats really the range that you should expect to see going forward so its sort of the low 20%s as a percent of total revenues.

http://investor.shutterstock.com/phoenix.zhtml?c=251362&p=irol-newsArticle&ID=1817283&highlight=

Revenue

Revenue for the first quarter was $51.1 million, a 36% increase from the first quarter of 2012.   

Net Income

Net income for the first quarter of 2013 increased by 50% to $5.6 million as compared to $3.7 million in the first quarter of 2012. Net income available to common stockholders/members for the first quarter of 2013 was $5.5 million or $0.16 per share on a fully diluted basis as compared to $2.8 million or $0.13 per share on a fully diluted basis in the first quarter of 2012.

Cash

The Company's cash balance was $107.0 million as of March 31, 2013 as compared to $102.1 million as of December 31, 2012.  The Company had no bank debt as of March 31, 2013.  The Company generated $13.8 million of cash from operations in the first quarter of 2013 and paid down short-term debt of $6.0 million during the quarter.

http://www.stockmarketstudy.org/wordpress/tag/sstk/page/2/

So our strategy is really volume leadership

Ross Sandler Deutsche Bank

Would you talk about that for a sec, the landscape because weve taken a lot of questions about it, as the IPO was happening in the sense, but you guys are now officially that the largest online royalty free inventory business out there. How would you characterize the competitive landscape today versus maybe a year ago, between a few of those bigger guys that you just mentioned and some of the smaller? Which are you more focused on if at all?

Thilo Semmelbauer

So our strategy is really volume leadership and Ross, youre quite right that in volume terms, we delivered more downloads, paid downloads last year than all of Getty combined.

And Getty is certainly continues to be the revenue leader in this space. If Getty is sort of in the $800 million to $1 billion revenue range, we think the market is somewhere in the $4 billion to $6 billion range, just for stock imagery. And given our size, $170 million last year were really still a very small player in a large and growing market, and we see opportunity for several big players continuing to dominate in the market. So and obviously we want to be one of them.

In terms of changes in competitive dynamics, Id say in the last year, not significant changes. Getty continues to be a big player. Numbers of years ago they bought iStockPhoto. From everything we can tell, Getty is not growing but they continue to generate lot of cash. Its a strong business. There are always new players popping up and disappearing because as Tim mentioned barriers to entry are very low in this space but barriers to scale are high and were not really seeing were not seeing anybody else anywhere close to where we are.
« Last Edit: June 30, 2013, 00:35 by gbalex »


« Reply #67 on: June 30, 2013, 05:53 »
0
SS gained market share by offering low cost images & they increased revenue by driving cost per sale down. Over the last 3 years revenue per download is up.


Revenue per download is up because SS have been selling more and more ODD's and SOD's. That's pretty much where all the growth has come from. Subscription downloads and revenue have actually been fairly static.

Personally I think SS have 'gained market share' by simply offering a better service than their competitors. Their sub packages and their single image deals aren't actually any cheaper than their competitors (other than IS exclusive 'collections'). SS have got the most accurate, flexible and quickest search results of anyone and that's where they score. As Jon says, SS are not really in the business of licencing images but of providing a service;

"Weve sold over a quarter of a billion assets over the past 9 years. We have an incredible amount of data on these downloads. We know what search leads to what image, and at this point we can practically read the users mind in 14 different languages. Shutterstock is the volume leader, and therefore we are the data leader. In several languages we use the data we have to display the best search results for any given query. We obsess over search success and if we can reduce the time it takes to get from search to download by a tenth of a second, we win that day. We iterate over and over and use whatever data we have to continuously find the best image for the customer. The best image for a given search isnt one that another agency doesnt have, its the one that will get chosen and downloaded. Out of over 20 million images, with 10,000 more each day, were likely to have the image you need. We believe that if we can get the right product to the buyer the buyer the quickest, we win in the end. Having exclusive royalty free content is of no advantage when a buyer is going to choose where to buy a photo its getting a relevant photo the quickest. To see the user of this data in action, go ahead and try a search on Shutterstock and compare it the same search on our competitors sites."

http://jonoringer.com/2013/01/13/why-going-exclusive-as-a-microstock-photographer-doesnt-work/

« Reply #68 on: June 30, 2013, 06:38 »
0
I don't really care how much money Jon is trousering these days as long as my own bottom line still has vitality. And having worked for three of the top IT companies I don't expect an automatic raise just because the company made more money - that stopped happening around 2008/09

This last quarter SS paid me $0.60 PD which is about 10% up on 2012. In this climate, I'll take 10% growth any day. So what if I can average $1.50 to $2.00 elsewhere - my turnover at other sites is around 60% lower than SS. I know which model works for me and I'll take increased market penetration/volume sales over a raise thanks. Keep doing what you're doing Jonno.

Tror

« Reply #69 on: June 30, 2013, 06:39 »
+3

Net Income

Net income for the first quarter of 2013 increased by 50% to $5.6 million as compared to $3.7 million in the first quarter of 2012. Net income available to common stockholders/members for the first quarter of 2013 was $5.5 million or $0.16 per share on a fully diluted basis as compared to $2.8 million or $0.13 per share on a fully diluted basis in the first quarter of 2012.


So, they increased their net income by 50%. So why shouldn`t we get at least a raise by, lets say, 20%? Any reason for that? They are making mroe money on our content and we should participate. And why are there still people here who want to block such a move against the interest of the contributor?

« Reply #70 on: June 30, 2013, 08:25 »
+3

Net Income

Net income for the first quarter of 2013 increased by 50% to $5.6 million as compared to $3.7 million in the first quarter of 2012. Net income available to common stockholders/members for the first quarter of 2013 was $5.5 million or $0.16 per share on a fully diluted basis as compared to $2.8 million or $0.13 per share on a fully diluted basis in the first quarter of 2012.


So, they increased their net income by 50%. So why shouldn`t we get at least a raise by, lets say, 20%? Any reason for that? They are making mroe money on our content and we should participate. And why are there still people here who want to block such a move against the interest of the contributor?
I don't think anyone in their right mind is against them giving us a raise, its just not likely to happen.  I'd like someone to give me $1,000,000 but I know its not going to happen.  If you want a raise, why not ask them?  They read this forum but I don't think this thread is going to make them think they better give us a raise.

How could we put pressure on them to give us a raise?  I can think of one way, all non-exclusives leave istock and send out a message that they wont carry on tolerating low commission percentages.  Until something like that happens, I think we have absolutely no negotiating power with SS.  Would be great if I was proved wrong on this, I'd love a proper raise.

« Reply #71 on: June 30, 2013, 08:30 »
+6

Net Income

Net income for the first quarter of 2013 increased by 50% to $5.6 million as compared to $3.7 million in the first quarter of 2012. Net income available to common stockholders/members for the first quarter of 2013 was $5.5 million or $0.16 per share on a fully diluted basis as compared to $2.8 million or $0.13 per share on a fully diluted basis in the first quarter of 2012.


So, they increased their net income by 50%. So why shouldn`t we get at least a raise by, lets say, 20%? Any reason for that? They are making mroe money on our content and we should participate. And why are there still people here who want to block such a move against the interest of the contributor?


Faulty logic there. Their profit was about 10% of turnover (5.6m on 51m).  I think we determined in the past that their payout to suppliers is around 30% - say 17m. So if you increase that by 20% it will knock 3.4m off the profits, taking them to about 2.2m, or a 20% fall in profits, compared with last year.

Why do you think shareholders should agree to a 20% cut in earnings, so that suppliers can have a 20% increase in payout? The effect of  rapidly falling year-on-year profits would probably wipe 75% off the share price (it would certainly go below the IPO level, which included an assumption that profits would rise in future).

I think this calculation shows just how ridiculous it is for people to talk about a "fair commission rate". What's fair? Is 30c per image fair and 25c not fair? Would a 50c starting rate be "fair", causing a $17m fall in profits and causing SS to go bankrupt? Or should they double commissions and double the subscription price, and then we can all feel that we're getting a "fair" 50c to 76c per dl - and mourn the fact that all the buyers have gone to Thinkstock so we don't get sales any longer, but at least they are "fair" 76c sales that aren't happening.

Sure, I'd love to see an increase in commissions AND earnings, but I don't want to see commissions rise and LOSE earnings as a result.

It's really very clear from the figures that the only way our earnings can achieve a sustainable improvement on SS is from them growing sales overall and opening new markets. We can't get meaningful earnings growth from higher commissions there because it would destroy the entire business model - maybe a penny a sale for subs is feasible, but that is only worth 3%-4% to us.  The SODs market they opened up recently has given my earnings a 30% boost this month (admittedly, 10% is more usual).

Shareholders and contributors alike will benefit from SS growing its markets. Neither party will benefit from any significant pay rise for contributors.

The difference between Jon being a billionaire and Jon being bankrupt and us all out looking for "proper" jobs appears to be about an extra 10c commission per download. And who here thinks 48c is "fair" but 38c is "unfair"?

It's working, let's not call for it to be broken.

PS: I'd love to know if Balex's dad thinks that achieving a 10% profit on turnover constitutes grinding the workers' faces in the mud and, if so, what the correct profit level is.





« Last Edit: June 30, 2013, 08:56 by BaldricksTrousers »

ShadySue

  • There is a crack in everything
« Reply #72 on: June 30, 2013, 08:39 »
+2
How could we put pressure on them to give us a raise?  I can think of one way, all non-exclusives leave istock and send out a message that they wont carry on tolerating low commission percentages. 
Except that if all indies who have not already done so leave iS, SS will know that actually they would then be LESS likely to leave SS, as they will need the money even more.

Of course SS should be charging customers more and paying contributors more than they did when they opened. No doubt acceptance standards were much lower then, and it would be far more difficult to have files from cheaper equipement accepted now than it was then. Also, most of the 'cheap to make shots' which have selling potential are already there in scores, so new material is more expensive to produce.

« Reply #73 on: June 30, 2013, 08:55 »
+2
How could we put pressure on them to give us a raise?  I can think of one way, all non-exclusives leave istock and send out a message that they wont carry on tolerating low commission percentages. 
Except that if all indies who have not already done so leave iS, SS will know that actually they would then be LESS likely to leave SS, as they will need the money even more.

Of course SS should be charging customers more and paying contributors more than they did when they opened. No doubt acceptance standards were much lower then, and it would be far more difficult to have files from cheaper equipement accepted now than it was then. Also, most of the 'cheap to make shots' which have selling potential are already there in scores, so new material is more expensive to produce.

If I recall correctly their initial sub was $99 a month (I don't remember how many dls that allowed). The starting commission was 20c per dl.  They increased both the price and the commission levels annually for several years until other agencies started getting heavily into subs and the financial crash had buyers looking at their budgets more closely.  Since then they have concentrated on growth by boosting their market, rather than from increasing prices (which would let competitors undercut them).

[Amazing! I get a -1 vote for a simple statement of facts. What do people have against reality?]
« Last Edit: June 30, 2013, 12:21 by BaldricksTrousers »

EmberMike

« Reply #74 on: June 30, 2013, 09:07 »
+4
I don't expect to see a raise, despite believing that it would be justified. Jon said it himself recently in an interview, the level of quality at Shutterstock has gone up tremendously, and that he thinks he wouldn't even be accepted to SS as a photographer today. That growth in quality is largely due to the contributors, and the fact that we all can still get images accepted to the collection speaks to how we've upped our own quality standards to keep up, helping he company grow along the way. A little gratitude for that would be appreciated.

So if a raise is unlikely, maybe a year-end bonus would be more appropriate. Years when the company has done well and the stock price has soared, come December maybe kick a little back to the contributors.

I enjoy getting those hand-signed holiday cards from Jon and Thilo, but I would like them even more if they came with a bonus check. :)



 

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