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Author Topic: Shutterstock Q4/2021 full year financials  (Read 6103 times)

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« on: February 11, 2022, 00:30 »
+14
Shutterstock announced their end of year financials this morning and although there were some good numbers, for investors, the stock closed at $85.68, down $7.66. The market overall was only a little off, so the sentiment appeared to be that Shutterstock's growth wasn't what investors had hoped

https://investor.shutterstock.com/news-releases/news-release-details/shutterstock-reports-fourth-quarter-and-full-year-2021-financial

Their investor "microsite" has been updated with some slides and videos (I watched a couple but there's no new information and they are so stilted and awkward, I don't recommend them)

https://content.shutterstock.com/investor-report/index.html

You can read the transcript of the earnings call at Seeking Alpha - again, lots of buzzy nonsense for the most part. A taste (from Stan Pavlovsky):

Quote
"As discussed last quarter, e-commerce organic growth was low-single digits in the quarter, and the slowdown partially reflected the lapping of new e-commerce subscription products launched in 2020. Further, as we increasingly transition to a subscription led model, we have seen softness within our transaction customer segment, which uses our products on an ad-hoc project by project basis."

https://seekingalpha.com/article/4485857-shutterstock-inc-s-sstk-ceo-stan-pavlovsky-on-q4-2021-results-earnings-call-transcript

The enterprise segment appears to be showing signs of life; more new products in the e-commerce section that should lead to "organic growth"; the FLEX subscriptions appear to be doing well. Metaverse, AI and computer vision got a mention and Shutterstock plans "deeply embedding ourselves in our customers' workflow". They bought back $27 million in stock during 2021 and plan to buy $100 million per year!

"All submitted content is reviewed by AI technology and human experts to ensure the highest quality, integrity and licensability" That is apparently a "Global Marketplace Network Effect". As I mentioned, buzzwords galore.

Their earnings per share for 2021 were $3.48 and their guidance for 2022 is $3.65 to $3.80. That made me wonder if more squeezing of contributor revenues might be coming, but then I thought about something Stan Pavlovsky said:

 "...we believe that our new creative power tools powered by PicMonkey will drive an increase in high-margin recurring subscription revenue, adding further stability and visibility into our revenue base"

In the investor site there's a chart of various markets they think they can play in - increasing their TAM (total addressable market) gets mentioned a lot. Of their existing business - stock images, music and video - imagery is the biggest at $4.2 billion with 5.2% growth (not sure if that's the market growing or Shutterstock's share of it - or just some random number). But "Creative Software Tools" is nearly twice the size at $8.2 billion, with 8% growthl

I think Shutterstock wants to grow subscription products that don't have any royalty costs associated with them: "Shutterstock's global creative platform, Creative Flow, includes the scale and embedded relationships with leading social media platforms enables our customers to generate high quality creative work, allowing us to capitalize on this emerging opportunity." That's a cut and paste - I can't explain exactly what they might have meant!

This is right underneath a bullet point: "Shareholder Returns Driven by Revenue Growth, Margin Expansion, Capital Return and M&A". Remember that margin expansion means primarily cutting royalty expense for the existing stock business. More on that in my chart, posted below.

There was more happy talk about using AI and data to sell services to customers and the value of all the data Shutterstock gathers from metadata on the content and searches customers do. Even assuming they can get some good software tools out of the three AI companies they acquired in 2021, the fact that huge amounts of their metadata is spammy rubbish will really hamper any efforts in that area (IMO).They have never really addressed keyword spam/stuffing/errors although they know it's there.

I found it interesting their their subscriber revenue in Q4 2021 was slightly lower than Q3 2021 - historically Q4 has always been the big quarter (there's a chart on the investor microsite). They say there was growth of 14% but that's over Q4 2020 (and 2020 followed a typical pattern, although everything was lower -pandemic and all).

The chart below is similar to one I posted earlier in 2021, but covers entire fiscal years from 2013 to 2021. It only include things that affect contributors - how many downloads, how much royalty expense, how many contributors, etc.

Bottom line is not a surprise - Shutterstock's business is growing revenue & profits, but the contributor's share of that is lower - 35.9% of revenue in 2021 was paid out in royalties. That's lower than in any other year from 2013 on. At the end, I tacked on another way to look at this. Contributors have grown from 55,000 in 2013 to over 2 million in 2021 (according to Shutterstock's financial reports). I know that lots of those contributors don't do much but when you look at the royalty payout on a per contributor basis, it highlights just how much thinner the reduced royalty payouts are being spread.

Tighten your belts :)

The PDF and JPG have the same data; I didn't realize the forum couldn't display the PDF

Edited Feb 15 to add a link to this investor news which talked about Shutterstock's competitive position strengthening and illustrated the article with an Unsplash photo! You can't make this stuff up...

https://www.insidermonkey.com/blog/bernzott-capital-shutterstock-sstks-competitive-position-is-strengthening-1027404/
« Last Edit: February 15, 2022, 11:13 by Jo Ann Snover »


JamoImages

  • Stock Producer & Blogger: jamoimages.com
« Reply #1 on: February 11, 2022, 01:19 »
+6
My earnings in Shutterstock keep going down while downloads are growing steadily. That supports the fact that SS's strategy to grow its subscription products is strong.

No sense for contributors to works so hard to get more sales but in the end, earn much less. How long can this trend continue until contributors pull the plug?

It is so frustrating to read these reports and see how SS's revenue per download keeps growing and then look at your own RPD which keeps going lower at the same pace.  :-[

« Reply #2 on: February 11, 2022, 02:10 »
+1
Great analysis, as always.

One comment to the numbers in your chart: You have the numbers Shutterstock reports as "cost of revenue" marked as royalties.
As I understand it, this number ("cost of revenue") contains the royalties paid out, but also other items. I have not found any information to separate those items.
That means, the real royalties will be (much?) lower.

MxR

« Reply #3 on: February 11, 2022, 02:32 »
+1
The shutter thing is demotivating, maybe my income has only dropped 20% and surely istock's royalties are worse but this situation is very demotivating. Psychologically I take less stock photos and spend much less money. I will continue doing stock photos because I like it but in the end I will get bored

« Reply #4 on: February 11, 2022, 11:48 »
+3
...One comment to the numbers in your chart: You have the numbers Shutterstock reports as "cost of revenue" marked as royalties.
As I understand it, this number ("cost of revenue") contains the royalties paid out, but also other items. I have not found any information to separate those items....

I don't have any data on the other items in cost of revenue, unfortunately. Those who do aren't publishing any more :( Remember the Contributor earnings report?

https://www.shutterstock.com/blog/contributor-earnings-report

The last time (I can find) that Shutterstock crowed about contributor earnings was the blog post about paying out over $1 billion to contributors - in 2019

https://www.shutterstock.com/blog/1-billion-contributor-earnings

My guess is that we won't see charts like that in the future as investors and insiders don't want to hear about their large "cost" (i.e. us) any more.

The numbers from the billion dollar earnings blog track similarly (but slightly lower). If I get any better numbers from anywhere at any point, I'll update the tables.

Prediction from my broken crystal ball: contributor share of earnings will continue to decline at Shutterstock :)

« Reply #5 on: February 11, 2022, 12:18 »
0
...One comment to the numbers in your chart: You have the numbers Shutterstock reports as "cost of revenue" marked as royalties.
As I understand it, this number ("cost of revenue") contains the royalties paid out, but also other items. I have not found any information to separate those items....

I don't have any data on the other items in cost of revenue, unfortunately. Those who do aren't publishing any more :( Remember the Contributor earnings report?

https://www.shutterstock.com/blog/contributor-earnings-report

The last time (I can find) that Shutterstock crowed about contributor earnings was the blog post about paying out over $1 billion to contributors - in 2019

https://www.shutterstock.com/blog/1-billion-contributor-earnings

My guess is that we won't see charts like that in the future as investors and insiders don't want to hear about their large "cost" (i.e. us) any more.

The numbers from the billion dollar earnings blog track similarly (but slightly lower). If I get any better numbers from anywhere at any point, I'll update the tables.

Prediction from my broken crystal ball: contributor share of earnings will continue to decline at Shutterstock :)

Thank you for these interesting insights, Jo Ann.

Yes, I think your crystal ball is prophesying this correctly.

« Reply #6 on: February 11, 2022, 13:25 »
+1
Thanks for the info and analysis.

I think that last column pretty much sums things up. Sad what has happened. I guess the slower growth in new contributors might be the result in the lower amounts to contributors. It will be interesting to see if that number keeps dropping. I am guessing it won't ever go down unless SS is more honest about how they report contributors than I suspect they are.

« Reply #7 on: February 11, 2022, 14:00 »
0
thanks for the detailed analysis!

as you note, the avg/contributor includes many with tiny incomes, bringing the avg down - is it possible to track the median over time?  a decreasing median would help to highlight the effect of a massive increase of inactive-low volume contributors

« Reply #8 on: February 11, 2022, 14:04 »
+1
Shutterstock is on an irreversible down path. Adobe is already the leader and will be for a long time (quicker than I thought). If they would add editorial they would crush even more Getty and SS.

Getty has long arms and still a big foot inside many doors. If they get the money they need selling their BCC- stock with their return to the stock market the nexts months they might also surpass SS. Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

PaulieWalnuts

  • We Have Exciting News For You
« Reply #9 on: February 11, 2022, 15:26 »
+9
Shutterstock is on an irreversible down path. Adobe is already the leader and will be for a long time (quicker than I thought). If they would add editorial they would crush even more Getty and SS.

Getty has long arms and still a big foot inside many doors. If they get the money they need selling their BCC- stock with their return to the stock market the nexts months they might also surpass SS. Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

Dont be surprised if Adobe follows the practices of the other companies at some point. Some of you should recognize the pattern.

"Getty has become evil! Istock is great so we need to support them!"
"Istock has become evil! Shutterstock is great so we need to support them!"
"Shutterstock has become evil. Adobe is great so we need to support them!"


« Reply #10 on: February 11, 2022, 16:37 »
+3
Shutterstock is on an irreversible down path. Adobe is already the leader and will be for a long time (quicker than I thought). If they would add editorial they would crush even more Getty and SS.

Getty has long arms and still a big foot inside many doors. If they get the money they need selling their BCC- stock with their return to the stock market the nexts months they might also surpass SS. Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

Dont be surprised if Adobe follows the practices of the other companies at some point. Some of you should recognize the pattern.

"Getty has become evil! Istock is great so we need to support them!"
"Istock has become evil! Shutterstock is great so we need to support them!"
"Shutterstock has become evil. Adobe is great so we need to support them!"

Lets all hope this wont happen!

csm

« Reply #11 on: February 11, 2022, 17:14 »
0
Well, all I notice at the moment since I removed all my stills is the drop in prices for video clips.

So many sales for 0.25 and hardly any of the what used to be regular priced sales of $25 and upwards, I left stills for video for the higher prices. Now video has gone the same way. This is not what I had planned although looking back inevitable. I worked so hard producing video clips the last couple of years, and of course it hasn't helped the last couple of years being what they were but it just goes to show you never know whats round the corner. All that effort and then they can decide to change the contract, the pricing or the algorithm and there's nothing you can do about it.

« Reply #12 on: February 11, 2022, 17:42 »
0
No doubt it can happen. The day stagnation or decrease in the stock price happens they will begin to cud down costs. Let's hope this is not around the corner.


Dont be surprised if Adobe follows the practices of the other companies at some point. Some of you should recognize the pattern.

"Getty has become evil! Istock is great so we need to support them!"
"Istock has become evil! Shutterstock is great so we need to support them!"
"Shutterstock has become evil. Adobe is great so we need to support them!"

« Reply #13 on: February 11, 2022, 17:54 »
0
Shutterstock is on an irreversible down path. Adobe is already the leader and will be for a long time (quicker than I thought).

leader in what? customers? library? downloads? sales?  in which of these is AS the leader?
Quote
......Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

get some perspective - SS wasn't hurt by disgruntled contributors.  instead, we get eternal whinging about the natural evolution of laissez faire capitalism, while ignoring the real badguys - fossil fuel, agribusiness, financial instruments that add nothing to the economy, etc, etc

« Reply #14 on: February 11, 2022, 18:09 »
+2
The only thing I care is leader in revenue for the contributors. And taking out specialized agencies like Stocksy,Arcangel, etc that usually bring top dollars to their contributors from the Micros Adobe has already overtaken SS and that difference is growing stronger everyday. If SS makes 1 trillion sales a day I could care less if nothing or nearly nothing ends in my pocket.

I understand that others are not worried, being in a ship that is going down faster as predicted. Their choice.


leader in what? customers? library? downloads? sales?  in which of these is AS the leader?
Quote
......Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

get some perspective - SS wasn't hurt by disgruntled contributors.  instead, we get eternal whinging about the natural evolution of laissez faire capitalism, while ignoring the real badguys - fossil fuel, agribusiness, financial instruments that add nothing to the economy, etc, etc

« Reply #15 on: February 11, 2022, 18:15 »
+6
instead, we get eternal whinging about the natural evolution of laissez faire capitalism, while ignoring the real badguys - fossil fuel, agribusiness, financial instruments that add nothing to the economy, etc, etc

I'm afraid that we are far from living in a laissez-faire capitalism.
We are living in a degenerate crony-capitalism, where through their lobbyist, corporations, unions, and other special interest groups are paying politicians for special privileges, dedicated laws, and tough regulations meant to kill their smaller competitors.

A return to something closer to a true laissez-faire capitalism may be the solution to your problems.  ;)
« Last Edit: February 11, 2022, 21:34 by Zero Talent »

« Reply #16 on: February 12, 2022, 00:19 »
+1
Shutterstock is on an irreversible down path. Adobe is already the leader and will be for a long time (quicker than I thought). If they would add editorial they would crush even more Getty and SS.

Getty has long arms and still a big foot inside many doors. If they get the money they need selling their BCC- stock with their return to the stock market the nexts months they might also surpass SS. Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

Dont be surprised if Adobe follows the practices of the other companies at some point. Some of you should recognize the pattern.

"Getty has become evil! Istock is great so we need to support them!"
"Istock has become evil! Shutterstock is great so we need to support them!"
"Shutterstock has become evil. Adobe is great so we need to support them!"

Lets all hope this wont happen!

To paraphrase Winston Churchill "A microstocker is one who feeds a crocodile-hoping it will eat him last."


PaulieWalnuts

  • We Have Exciting News For You
« Reply #17 on: February 12, 2022, 07:00 »
0
Shutterstock is on an irreversible down path. Adobe is already the leader and will be for a long time (quicker than I thought). If they would add editorial they would crush even more Getty and SS.

Getty has long arms and still a big foot inside many doors. If they get the money they need selling their BCC- stock with their return to the stock market the nexts months they might also surpass SS. Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

Dont be surprised if Adobe follows the practices of the other companies at some point. Some of you should recognize the pattern.

"Getty has become evil! Istock is great so we need to support them!"
"Istock has become evil! Shutterstock is great so we need to support them!"
"Shutterstock has become evil. Adobe is great so we need to support them!"

Lets all hope this wont happen!

To paraphrase Winston Churchill "A microstocker is one who feeds a crocodile-hoping it will eat him last."

"Don't believe everything you read on the internet" - Abraham Lincoln

« Reply #18 on: February 12, 2022, 07:46 »
0
Internet + Abe Lincoln =  ;D

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #19 on: February 12, 2022, 11:27 »
+1
Shutterstock is on an irreversible down path. Adobe is already the leader and will be for a long time (quicker than I thought). If they would add editorial they would crush even more Getty and SS.

Getty has long arms and still a big foot inside many doors. If they get the money they need selling their BCC- stock with their return to the stock market the nexts months they might also surpass SS. Oringer chose the way out and cashing with his pal. Good riddance to both. They will be gone quite soon and whoever owns SS in the future I doubt they will be ever recovered the trust of their stabbed in the back contributors.

Dont be surprised if Adobe follows the practices of the other companies at some point. Some of you should recognize the pattern.

"Getty has become evil! Istock is great so we need to support them!"
"Istock has become evil! Shutterstock is great so we need to support them!"
"Shutterstock has become evil. Adobe is great so we need to support them!"

You left out some?  :)

FT and the dollar photo club, boycott them!
Deposit is licensing to themselves as subs and selling for more on a different site.
Pond5 is opening a new division.
Graphic Leftovers is good for contributors they pay 50% (which became GLstock and did a disappearing act)

In defense of Adobe, I won't make any predictions, but right now they are the best for the most people.

They did raise our commissions and equalized the credits, which made our earnings higher. How many other agencies since 2016 have given us a raise?

ps Everything on the Internet is true!

« Reply #20 on: February 12, 2022, 13:57 »
+1

leader in what? customers? library? downloads? sales?  in which of these is AS the leader?
The only thing I care is leader in revenue for the contributors. And taking out specialized agencies like Stocksy,Arcangel, etc that usually bring top dollars to their contributors from the Micros Adobe has already overtaken SS and that difference is growing stronger everyday....



for some, but many here report higher SS income than for AS, often much more.  of course, if you've left SS then obviously AS will produce higher income

« Reply #21 on: February 12, 2022, 13:59 »
0
instead, we get eternal whinging about the natural evolution of laissez faire capitalism, while ignoring the real badguys - fossil fuel, agribusiness, financial instruments that add nothing to the economy, etc, etc

I'm afraid that we are far from living in a laissez-faire capitalism.
We are living in a degenerate crony-capitalism, where through their lobbyist, corporations, unions, and other special interest groups are paying politicians for special privileges, dedicated laws, and tough regulations meant to kill their smaller competitors.

A return to something closer to a true laissez-faire capitalism may be the solution to your problems.  ;)

we're just using different terms - i totally agree with your assessment

thijsdegraaf

« Reply #22 on: February 12, 2022, 14:01 »
+3
The difference between Adobestock and the other stock sites is that they do not rely solely on earnings from Stock.
And.... we often use Adobe editing programs and are therefore also customers, who Adobe would like to keep as satisfied customers.
So I have a little hope that they won't change as quickly as Shutterstock or Istock
« Last Edit: February 12, 2022, 14:05 by thijsdegraaf »

« Reply #23 on: February 12, 2022, 17:34 »
0
The difference between Adobestock and the other stock sites is that they do not rely solely on earnings from Stock.
And.... we often use Adobe editing programs and are therefore also customers, who Adobe would like to keep as satisfied customers.
So I have a little hope that they won't change as quickly as Shutterstock or Istock

i hope so, too - but contributors who use adobe products are a tiny % of total users, and even if adobe changed for the worst, most would continue to use their software

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #24 on: February 13, 2022, 10:23 »
0

leader in what? customers? library? downloads? sales?  in which of these is AS the leader?
The only thing I care is leader in revenue for the contributors. And taking out specialized agencies like Stocksy,Arcangel, etc that usually bring top dollars to their contributors from the Micros Adobe has already overtaken SS and that difference is growing stronger everyday....



for some, but many here report higher SS income than for AS, often much more.  of course, if you've left SS then obviously AS will produce higher income

And some report best income from iStock. Somewhere right now, someone is saying, none of those, I make the most income from Agency X.

More people find Adobe will make them more money per download and to be a better source of real income. I do now and since the June 2020 TOS on SS.

"Your personal results may vary,  and past performance is not indicative of future results."  8)

You're right however, some people do much better on SS than AS. Crabs walk sideways and Lobsters swim backwards.


 

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