pancakes

MicrostockGroup Sponsors


Author Topic: Shutterstock Q1 numbers; Stan Pavlovsky resigned  (Read 15246 times)

0 Members and 1 Guest are viewing this topic.

« on: April 26, 2022, 18:04 »
+23
Edited May 3 to note that Stan Pavlovsky resigned as CEO April 27th, effective May 3rd. Jon Oringer is interim CEO until they find someone. See more in my post later in this thread:

https://www.microstockgroup.com/shutterstock-com/shutterstock-q1-numbers-and-earnings-call/msg576204/#msg576204

There are some links to the details on the numbers, but I think that the headlines for contributors looking at the rest of 2022 and what things will be like are best summed up by one chart, two new hires and talk of another new "product" to come later this year. Oh, and paid download numbers continue downward (3% drop to 44.6 million).

The stock market was down today, but SSTK was down more than the market and closed at $77.43, down 3.93%. They presented as many gains as they could, but Income from operations decreased 16% to $31.9 million, net income decreased 10% to $26.6 million and adjusted EBITDA decreased 3% to $54.8 million.

The chart: Shareholder Return of Capital (below) says that SS plans to return $132 million for 2022 via share buybacks and quarterly dividends. Compared to $58 million in 2021. That's money not going to building the business or rewarding contributors. Indirectly that rewards employees who get bonuses directly or indirectly via the stock price as well.

The new hires: a new Chief Marketing Officer, Jason McClelland. He'd done some short stints (1 year each) at startups and a long one (16 years) at Adobe in web services, product management and head of eCommerce. According to his LinkedIn page he developed the switch to subscriptions. Some of the previous CMOs at Shutterstock (there have been lots) were there for a few months (Dorian Quispe), a year-ish (Jeff Weiser) or long term (2 years, Lou Weiss). We should start a pool on how long this guy lasts.

The new VP of Brand Marketing, Skip Wilson, left Peloton in Feburary (so I assume he was part of that layoff of 2,800 people). In the press release he says "The opportunity to create a strong brand that drives a deeper connection to the Shutterstock audience is what excites me"

https://investor.shutterstock.com/news-releases/news-release-details/shutterstock-appoints-chief-marketing-officer-and-vice-president

The new product: In the earnings call transcript, amongst the typical firehose of buzzwords, Stan Pavlovsky talked about new features that will roll out first to existing subscribers to help them predict which images will work in their campaigns (AI got a mention here). The notion is that as cookies and other tracking devices are doing away, marketers will need ways to know what will succeed and Stan says SS AI can help them do that (based on what exactly, he didn't say). The new product is a cheaper subscription to their Catalog, Plan, Create & Predict apps that includes free content - in other words all the revenue will go directly to them and none to contributors (he didn't point that out; those are my words). There will be an "upsell" to premium content:

"In addition, we plan to introduce later this year a creative flow subscription, which will include the Catalog, Plan, Create and Predict apps and will also incorporate our AI-powered search. This new product will target the casual creative segment and will include a free tier of Shutterstock content with an upsell path to Shutterstocks premium content subscriptions. We believe that this standalone creative flow subscription product, which will be available at lower monthly price point, represents an extension to new audiences who previously may not have had a need for stock content."

Still going after Canva's business, but Canva has a completely free tier which I don't think SS has. Stan talks about SS being able to broaden its presence beyond the content selection phase of projects.

https://seekingalpha.com/article/4503661-shutterstock-inc-sstk-ceo-stan-pavlovsky-on-q1-2022-results-earnings-call-transcript

Some interesting comments from the earnings call: subscription revenue as a percent of total revenue in Q1 43%, which was an all-time high - I assume because the on-demand credit packs and SOD are decreasing given the new FLEX offerings. There'll be a new unlimited music subscription with sound effects in Q2. In the Q1 2022 numbers (for subscribers and subscriber revenue) Turbo Squid is included for the first time (PicMonkey still is not; they apparently wait until they're one year on from the acquisition) so any gains aren't entirely a fair comparison as it's only in the 3 months ending March 31.

Stan was asked a question about how the apps had performed in keeping subscribers coming back. I can't explain his answer, but here it is:

"As far as retention goes, which is sort of whats most important about these applications, were seeing about 20% for the applications that weve launched, were seeing about a 20% engagement with the applications already. For new customers that are coming and engaging with the apps, they have about twice the engagement of customers who dont engage with the apps."

Contributors can't pay the bills with engagement but with royalties - those come from paid downloads. I think there was a genuine question in there from the analyst - are you seeing more subscribers continue their subscriptions if they use the apps - but he let Stan off the hook.

There will be a FLEX10 product (to follow the FLEX25) but that's being tested this quarter; no release date

https://investor.shutterstock.com/news-releases/news-release-details/shutterstock-reports-first-quarter-2022-financial-results
https://content.shutterstock.com/investor-report/index.html
https://www.linkedin.com/in/jasonmcclelland/
https://www.linkedin.com/in/skipawilson/
« Last Edit: May 03, 2022, 18:53 by Jo Ann Snover »


« Reply #1 on: April 26, 2022, 18:25 »
0
Thanks for this Jo Ann, interesting read.

« Reply #2 on: April 26, 2022, 18:30 »
0
thanks, once more, for a detailed breakdown

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #3 on: April 26, 2022, 21:22 »
0
Thanks for the report and analysis. Oh someone loves me? "This new product will target the casual creative segment"

wds

« Reply #4 on: April 26, 2022, 22:00 »
+2
From where I sit, I see income and dl's slowly declining at SS relative to AS and iS.

MxR

« Reply #5 on: April 27, 2022, 02:59 »
+1

If they convert everything to subscription, the expectations of amortizing a session will disappear. I sell more and earn less

« Reply #6 on: April 27, 2022, 05:14 »
+3
It is not strange the stock is falling. Some metrics are not good for SS. And that's Q1 when they pay the least to contributors:

The operating margin was 16%, and operating income for the quarter fell 16.3% to $31.9 million.

Operating cash flow for the quarter declined 37% to $22.7 million with a free cash flow of $10.2 million, a 62% decrease.

Adjusted EBITDA decreased 3% Y/Y to $54.8 million.


« Reply #7 on: April 27, 2022, 05:48 »
0

Still going after Canva's business, but Canva has a completely free tier which I don't think SS has. Stan talks about SS being able to broaden its presence beyond the content selection phase of projects.



But Shutterstock bought out a lot of content from contributors last year, with lump sum payments up front, but no further right to any royalties going forward. Presumably, this was why.

« Reply #8 on: April 27, 2022, 05:56 »
+2

Still going after Canva's business, but Canva has a completely free tier which I don't think SS has. Stan talks about SS being able to broaden its presence beyond the content selection phase of projects.



But Shutterstock bought out a lot of content from contributors last year, with lump sum payments up front, but no further right to any royalties going forward. Presumably, this was why.

I don't recall seeing anything about lump sum payments where was that announced?

wds

« Reply #9 on: April 27, 2022, 07:48 »
0
Thanks for the report Jo Ann!
Does anybody in the financial industry do competitive analyses of the various stock agencies?

« Reply #10 on: April 27, 2022, 09:08 »
0

Still going after Canva's business, but Canva has a completely free tier which I don't think SS has. Stan talks about SS being able to broaden its presence beyond the content selection phase of projects.



But Shutterstock bought out a lot of content from contributors last year, with lump sum payments up front, but no further right to any royalties going forward. Presumably, this was why.

I don't recall seeing anything about lump sum payments where was that announced?

There were a few threads on different forums where it was mentioned, but those approached didn't say much, as they had to agree to a Non-Disclosure agreement to get more information.

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #11 on: April 27, 2022, 10:06 »
0

Still going after Canva's business, but Canva has a completely free tier which I don't think SS has. Stan talks about SS being able to broaden its presence beyond the content selection phase of projects.



But Shutterstock bought out a lot of content from contributors last year, with lump sum payments up front, but no further right to any royalties going forward. Presumably, this was why.

I don't recall seeing anything about lump sum payments where was that announced?

There were a few threads on different forums where it was mentioned, but those approached didn't say much, as they had to agree to a Non-Disclosure agreement to get more information.

Which is true but how does that become "Shutterstock bought out a lot of content" vs Shutterstock bought out some content from some contributors? Even with NDAs superficial or generalized information can be leaked.

Good point if they own content, we don't know how much?


If they convert everything to subscription, the expectations of amortizing a session will disappear. I sell more and earn less

Absolutely true. If I take a weekend for shooting, on the road, the returns, even if I include Alamy, will not cover the expenses. I also shoot on the way and returning from events, that can go to AS and IS. The money isn't there anymore, anywhere.

Aside from we make less, they are going to depend on volume and subscriptions, API partners, more and more, for their income. While individual licenses from SS itself will be meaning less. We already see that. Look at the numbers. All those 10 subs represent the largest image pack subs and the API partners. How much do we see anymore of the 10 packs or 50s? Very Very little in my case.

They are moving their model towards volume outlets and that means we are discounted to the bone and we make less.

« Reply #12 on: April 27, 2022, 10:21 »
+1
Shutterstock Unlimited is an API deal with about 100 million images and 4 million videos included in the program

https://www.shutterstock.com/blog/5-reasons-to-go-unlimited-with-shutterstock-api
https://www.shutterstock.com/business/shutterstock-unlimited

In trying to find old posts here from when this was started, I found one of my own where I had linked to the SS forums where Kate had answered contributor questions about how things worked. As that link no longer goes anywhere useful (:)) I searched a folder where I keep screenshots & text files of things that might go away and found the text of Kate's post from 21 Feb 2021:

"Hi folks!

We knew you'd have questions, and had planned to share this with you before the announcement. Thanks for your patience.

K

What is Shutterstock Unlimited?

Shutterstock Unlimited is a new subscription plan offered by the Platform Solutions team. It represents the next evolution of our API strategy, which expands the reach of Shutterstock content to users who are not currently Shutterstock customers and offers new revenue streams for contributors.

 
What does Unlimited mean? How Unlimited is this content, really?

Unlimited applies only to the total number of asset licenses, but the content and license terms are both significantly limited. The content comprises a collection of carefully selected, underutilized images and videos. Content can only be used within partner platforms, and cannot be downloaded for other use. The Unlimited model is currently only available on digital platforms and does not apply to print and merchandise partners (e.g., Zazzle, Art.com, etc.).

 
Why are we offering this plan?

We are launching this plan in response to market and partner demand. The API partner model is fundamentally different from our other enterprise partnerships. It does not replace, compete with, or cannibalize sales of content through other channels, including our main eCommerce site.

This offering is aligned with best-practice subscription models that provide unlimited access to a content library (think Netflix and Spotify). It helps platform partners better predict and manage their content needs, and it enables Shutterstock to grow our platform partnerships with companies like Wix, Wave, and Lumen5 and continue to offer new, more stable revenue streams for contributors.

 
How is the content in the Unlimited plan selected? 

The images and videos are curated from a collection of quality content that has historically underperformed in both revenue generation and contributor payouts. All of the content is at least 2 years old and has never been previously licensed. The Unlimited plan expands distribution of this underutilized content.

 
What is the value for contributors?

Through Platform Solutions connections to over 7500 platform partners, this new plan further extends our reach to new customers that do not currently work with Shutterstock.

For many of our contributors, Shutterstock Unlimited will provide a new revenue stream for underperforming content, as well as more stability in payout volume over time. All of the content in the Unlimited collection will continue to be available for purchase on the main Shutterstock.com eCommerce site.

 
How many assets are included in the Unlimited Plan?
100M images and 4M videos are currently included in the Unlimited plan, and music tracks will be added later in 2021.

 
How much do I get paid?

The pricing has not changed from our existing API payout model, which is similar to the payout model on eCommerce subscription plans. Contributors receive a percentage of the licensing price paid by platform partners and end users.

 
How is my content used?

Content in the Unlimited Model can only be used within specific platform partnerships, and cannot be downloaded or used off platform. This is a very limited license, granted to one user on one platform for platform use only.

 
Can I opt out?

No, participation in our partnership deals is part of the Shutterstock Contributor agreement (TOS). However, Shutterstock Unlimited does not currently apply to contributors at our highest earnings levels.

 
Wilm Ihlenfeld

Posted Friday at 12:40 PM
 
Hello Kate,

is there a guarantee that "Unlimited" will remain limited to the content of our portfolios that are at least 2 years old and have never been licensed? Or should we expect Shutterstock to include other files in the "Unlimited" model if the business model is successful from Shutterstock's point of view?

How are the highest earning levels (those not involved in "Unlimited") defined? Which levels are not affected?

If the pricing will not change from the previous API payout model, does that mean specifically that contributors can expect to earn $0.10?

I - and probably countless other contributors - would be grateful for an honest answer.

Yours sincerely,

Wilm


Posted Friday at 01:49 PM
Hi Wilm,

Thanks for your thoughtful questions.

While I cant offer a guarantee about what content might be eligible for which products in the future, I can say that we are committed to maintaining the value of your content in the marketplace. It doesnt make sense to make every asset available at the lowest prices - when some content can and should command more.

For our initial launch, images from contributors who reached Level 6 for images in 2020 were not included. Im not sure how often the set of available images will be updated or when or why that rule might change. I do know that we are in a real learning mindset here, and that, depending on how customers interact with this content, we may want to change up how items get selected for inclusion.

Theres been no change to the 10 cent minimum earning threshold.

Have a great weekend.

K

« Reply #13 on: April 27, 2022, 17:35 »
0
Is this why I've had some old photo DLs on SSTK recently that are at least 2 years old & not sold before? One DL was for a very decent amount.

« Reply #14 on: April 29, 2022, 02:59 »
0

Still going after Canva's business, but Canva has a completely free tier which I don't think SS has. Stan talks about SS being able to broaden its presence beyond the content selection phase of projects.



But Shutterstock bought out a lot of content from contributors last year, with lump sum payments up front, but no further right to any royalties going forward. Presumably, this was why.

I don't recall seeing anything about lump sum payments where was that announced?

There were a few threads on different forums where it was mentioned, but those approached didn't say much, as they had to agree to a Non-Disclosure agreement to get more information.

Which is true but how does that become "Shutterstock bought out a lot of content" vs Shutterstock bought out some content from some contributors? Even with NDAs superficial or generalized information can be leaked.

Good point if they own content, we don't know how much?



You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #15 on: April 29, 2022, 09:38 »
0

Still going after Canva's business, but Canva has a completely free tier which I don't think SS has. Stan talks about SS being able to broaden its presence beyond the content selection phase of projects.



But Shutterstock bought out a lot of content from contributors last year, with lump sum payments up front, but no further right to any royalties going forward. Presumably, this was why.

I don't recall seeing anything about lump sum payments where was that announced?

There were a few threads on different forums where it was mentioned, but those approached didn't say much, as they had to agree to a Non-Disclosure agreement to get more information.

Which is true but how does that become "Shutterstock bought out a lot of content" vs Shutterstock bought out some content from some contributors? Even with NDAs superficial or generalized information can be leaked.

Good point if they own content, we don't know how much?



You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Me too? But I don't think I've been wrong about anything or made a mistake, in over an hour.

They also started in house production of images and a news team with exclusive credentials for Red Carpet affairs. They did contract with entire collections for exclusive future rights. There's much more going on than us.

Wondering when Getty's SPAC will proceed with sale of stock to the public. But I also wonder if they care much about IS other than treating it as side income for little work or expense? If they do, then that will challenge SS for some of the market share, more than IS has in recent years.

I think the way to check, would be find the SS in house collection and see who got bought out? Maybe? Kind of difficult.

« Reply #16 on: April 29, 2022, 12:04 »
0
This topic probably is about one of their own collections with bought out content.
https://www.microstockgroup.com/shutterstock-com/stolen-pictures-on-shutterstock/
There was at least one other collection with similar name ESB "something"...


Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #17 on: May 01, 2022, 13:46 »
0
This topic probably is about one of their own collections with bought out content.
https://www.microstockgroup.com/shutterstock-com/stolen-pictures-on-shutterstock/
There was at least one other collection with similar name ESB "something"...

Thanks for the reminder.  https://www.shutterstock.com/g/ESB+Professional

26,509 stock photos, vectors, and illustrations looks like a House account with selective images from some people.

Justanotherphotographer

« Reply #18 on: May 02, 2022, 01:50 »
0
Do we know for sure they actually buy/ own content? I've never known anyone who had content purchased from them.

Justanotherphotographer

« Reply #19 on: May 02, 2022, 02:40 »
0

You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Sorry, posted before I read this.

« Reply #20 on: May 02, 2022, 02:44 »
+1

You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Sorry, posted before I read this.

It was discussed in some thread here before, with contributors saying they got the offer (or at least a non-disclosure agreement. If you didn't sign that, you didn't get any further information), so I don't think it was that rare.
« Last Edit: May 02, 2022, 03:12 by Firn »

« Reply #21 on: May 02, 2022, 03:26 »
0

You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Sorry, posted before I read this.

It was discussed in some thread here before, with contributors saying they got the offer (or at least a non-disclosure agreement. If you didn't sign that, you didn't get any further information), so I don't think it was that rare.

Did you notice that you were among the top performers in photos on Adobe Stock for the week of April 11-17?

« Reply #22 on: May 02, 2022, 03:37 »
+1

You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Sorry, posted before I read this.

It was discussed in some thread here before, with contributors saying they got the offer (or at least a non-disclosure agreement. If you didn't sign that, you didn't get any further information), so I don't think it was that rare.

Did you notice that you were among the top performers in photos on Adobe Stock for the week of April 11-17?

Noooo!  :o But that explains why my sales temporary skyrocketed on Adobe. Was reallly surprised about that. Thanks for letting me know. I wonder how that happened.

« Reply #23 on: May 02, 2022, 03:49 »
0

You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Sorry, posted before I read this.

It was discussed in some thread here before, with contributors saying they got the offer (or at least a non-disclosure agreement. If you didn't sign that, you didn't get any further information), so I don't think it was that rare.

Did you notice that you were among the top performers in photos on Adobe Stock for the week of April 11-17?

Noooo!  :o But that explains why my sales temporary skyrocketed on Adobe. Was reallly surprised about that. Thanks for letting me know. I wonder how that happened.

This must be related to your easter motifs, Firn. Maybe there is a change in the algo for easter, where images containing the search term easter are pushed for a certain period before easter.

« Reply #24 on: May 02, 2022, 04:00 »
0

You are right that we don't know how much, but we do know from other posts that Shutterstock were actively buying out content. I have a couple of friends who were approached within my circle of contributor friends, and saw 3 or 4 posts on this forum and another. All I can do is extrapolate from that and make an educated guess that it wasn't an insignificant amount. I could, of course be totally wrong.

Sorry, posted before I read this.

It was discussed in some thread here before, with contributors saying they got the offer (or at least a non-disclosure agreement. If you didn't sign that, you didn't get any further information), so I don't think it was that rare.

Did you notice that you were among the top performers in photos on Adobe Stock for the week of April 11-17?

Noooo!  :o But that explains why my sales temporary skyrocketed on Adobe. Was reallly surprised about that. Thanks for letting me know. I wonder how that happened.

This must be related to your easter motifs, Firn. Maybe there is a change in the algo for easter, where images containing the search term easter are pushed for a certain period before easter.

Could be. I sold a loooot of Easter photos on Adobe this year, even though usually my holiday photos don't do so well on Adobe, while they sell a lot on iStock and SS. I was really surprised about this as it was so unusual for Adobe - Or unusual that Adobe was doing better for me at all. Sadly now it's back to it's old mediocre performance.  :'(


 

Related Topics

  Subject / Started by Replies Last post
54 Replies
19218 Views
Last post March 26, 2009, 06:18
by Peiling
58 Replies
18491 Views
Last post April 19, 2021, 07:12
by duns123
33 Replies
10321 Views
Last post June 08, 2020, 17:59
by Jo Ann Snover
6 Replies
3774 Views
Last post August 03, 2021, 11:41
by Uncle Pete
18 Replies
6109 Views
Last post June 18, 2022, 13:25
by cobalt

Sponsors

Mega Bundle of 5,900+ Professional Lightroom Presets

Microstock Poll Results

Sponsors