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Author Topic: Shutterstock Q4/2021 full year financials  (Read 4739 times)

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« Reply #25 on: February 14, 2022, 09:15 »
+1
Great analysis from Jo Ann.

BOTTOM LINE = The death spiral has started.


« Reply #26 on: February 15, 2022, 03:42 »
+5
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.

From "Notes to Consolidated Financial Statements"

"Costs and Expenses

Cost of revenue consists of royalties paid to contributors, credit card processing fees, content review costs, customer service expenses, infrastructure and hosting costs related to maintaining our creative platform and cloud-based software platform, depreciation and amortization of capitalized internal-use software, content and technology intangible assets, allocated facility costs and other supporting overhead costs. Cost of revenue also includes employee compensation, including non-cash equity-based compensation, bonuses and benefits associated with the maintenance of our creative platform and cloud-based software platform."

So, royalties paid to contributors are a small part of cost of revenue.

Great job Jo Ann, but i think % paid of contributors is much closer to my analysis.

Revenue per download (Three Months Ended September) is:

2013 $2.35
2015 $2.85
2017 $3.24
2020 $3.79
2021 $4.30

My RPD:

2013 $0.59
2015 $0.75
2017 $0.88
2020 $0.83
2021 $0.76

So, real royalty earnings % is:

2013 0.59/2.35= 25.10%
2015 0.75/2.85= 26.31%
2017 0.88/3.24= 27.16%
2020 0.83/3.79= 21.89%
2021 0.76/4.30= 17.67%

17.67% (not 30 or 35% of level 4 o 5) is very close to Istock's actual 15% ... a real theft against contributors.
« Last Edit: February 15, 2022, 03:50 by Bauman »

« Reply #27 on: February 15, 2022, 13:35 »
+8
...So, real royalty earnings % is:

2013 0.59/2.35= 25.10%
2015 0.75/2.85= 26.31%
2017 0.88/3.24= 27.16%
2020 0.83/3.79= 21.89%
2021 0.76/4.30= 17.67%

17.67% (not 30 or 35% of level 4 o 5) is very close to Istock's actual 15% ... a real theft against contributors.

No argument that it's hard to get accurate numbers for contributor royalties.

From the Q1 2019 earnings call, Shutterstock's then-CFO (Steven Berns) said " Contributor royalty expense was approximately 26.3% of revenue, which has remained relatively constant as compared to prior quarters"

In the Q2 and Q3 2019 earnings calls, the interim CFO said that royalties continued to be "approximately 26% of revenue". Things go quiet after that :)

This quote from Jon Oringer in Q4 2019's earnings call rings so hollow in light of the June 2020 slashing of contributor royalties:

"We started the Company in 2003 as a scrappy start-up, but quickly established ourselves as a great business. We were profitable on day one and have been every year since. Since that time, we have become a clear leader in the space and achieved numerous accomplishments over the years. Most recently, we celebrated the remarkable milestone of paying $1 billion in earnings to our global network of contributors.

We're proud of the success our contributors have achieved leveraging Shutterstock's platform, and are thrilled to share this accomplishment with our global community, our fellow creatives, including artists, photographers, videographers, and musicians. I want to thank all of our contributors, who made this historic breakthrough possible. While this is a massive achievement, we have not forgotten our roots."

I couldn't help but visit Twitter this morning to note the irony of an article about Shutterstock's improved competitive position being illustrated by a stock photo from Getty's Unsplash!

https://twitter.com/joannsnover/status/1493648921435914244

You can't make this stuff up!

« Reply #28 on: February 16, 2022, 06:34 »
+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!"

Of course they will. As soon as the growth phase is over pressure from shareholders will have their boot on our neck like everyone else. It will then be time to support another agency with our work.

The problem is the contributors who think they can find the perfect agency and things will never change. They then throw their toys out of the pram when their favourite inevitably screws them. Then its  theyre all the same so whats the point and give their work away for nothing. If you want to succeed in business you have to react to changes in the market and stay engaged.

Edit The alternative/ exception of course is using a different ownership model like Stocksy where owners and contributors wants are aligned.
« Last Edit: February 16, 2022, 06:38 by Justanotherphotographer »

wds

« Reply #29 on: February 16, 2022, 07:51 »
+1
I still don't understand why the agencies don't try a pricing model where an image's price increases as its download numbers increase. They will make more, the contributor will make more. I don't see a downside....but apparently the agencies do?

« Reply #30 on: February 16, 2022, 08:55 »
+3
I still don't understand why the agencies don't try a pricing model where an image's price increases as its download numbers increase. They will make more, the contributor will make more.

This is exactly what dreamstime does.

Level 1 = 0 downloads
Level 2 = 1+ download
Level 3 = 5+ downloads
Level 4 = 10+ downloads
Level 5 = 25+ downloads

And, yes, I love this model.

Nevertheless, it has to be said that you can't earn big money at dreamstime because not enough sales come in. I have not even managed 3,500 downloads in the 10 years. Even if the RPD is good there, hardly anything comes in.

wds

« Reply #31 on: February 16, 2022, 09:26 »
0
I still don't understand why the agencies don't try a pricing model where an image's price increases as its download numbers increase. They will make more, the contributor will make more.

This is exactly what dreamstime does.

Level 1 = 0 downloads
Level 2 = 1+ download
Level 3 = 5+ downloads
Level 4 = 10+ downloads
Level 5 = 25+ downloads

And, yes, I love this model.

Nevertheless, it has to be said that you can't earn big money at dreamstime because not enough sales come in. I have not even managed 3,500 downloads in the 10 years. Even if the RPD is good there, hardly anything comes in.

Interesting! I am not on Dreamstime and had no idea. How does it end up "dollars and cents"wise? What do you actually earn for a download of a "level 1" image vs. a "level 5" image?

« Reply #32 on: February 16, 2022, 10:04 »
0
I still don't understand why the agencies don't try a pricing model where an image's price increases as its download numbers increase. They will make more, the contributor will make more.

This is exactly what dreamstime does.

Level 1 = 0 downloads
Level 2 = 1+ download
Level 3 = 5+ downloads
Level 4 = 10+ downloads
Level 5 = 25+ downloads

And, yes, I love this model.

Nevertheless, it has to be said that you can't earn big money at dreamstime because not enough sales come in. I have not even managed 3,500 downloads in the 10 years. Even if the RPD is good there, hardly anything comes in.

Interesting! I am not on Dreamstime and had no idea. How does it end up "dollars and cents"wise? What do you actually earn for a download of a "level 1" image vs. a "level 5" image?

There is no difference concerning shubscriptions and Enhanced Licenses. Here is a screenshot.

« Reply #33 on: February 16, 2022, 11:19 »
+1
Our biggest enemy is free stock images and videos. Those sites are becoming more and more popular. Those sites are owned by companies like dreamstime, wirestock etc. Wether you are aware of it, agreed to it or not some companies like ones mentioned give your work for free in exchange for a small rate. Smaller than what shutterstock charges but without the overhead of reviewing photos, categorizing or keywording since thy come straight out of our ports.

If nothing was given away we would have a business.

« Reply #34 on: February 16, 2022, 12:10 »
0
Our biggest enemy is free stock images and videos.

If nothing was given away we would have a business.

So true!

« Reply #35 on: February 16, 2022, 12:13 »
0
Those sites are owned by companies like dreamstime, wirestock etc. Wether you are aware of it, agreed to it or not some companies like ones mentioned give your work for free in exchange for a small rate. Smaller than what shutterstock charges but without the overhead of reviewing photos, categorizing or keywording since thy come straight out of our ports.


Could you show some examples - this would be very interesting.

« Reply #36 on: February 16, 2022, 12:24 »
0
I still don't understand why the agencies don't try a pricing model where an image's price increases as its download numbers increase. They will make more, the contributor will make more.

This is exactly what dreamstime does.

Level 1 = 0 downloads
Level 2 = 1+ download
Level 3 = 5+ downloads
Level 4 = 10+ downloads
Level 5 = 25+ downloads

And, yes, I love this model.

Nevertheless, it has to be said that you can't earn big money at dreamstime because not enough sales come in. I have not even managed 3,500 downloads in the 10 years. Even if the RPD is good there, hardly anything comes in.

Interesting! I am not on Dreamstime and had no idea. How does it end up "dollars and cents"wise? What do you actually earn for a download of a "level 1" image vs. a "level 5" image?

When this was introduced (many years ago) I had high hopes, but it has not worked out well at all. In the beginning, high level images sold via subscription netted a 70 cent royalty versus 35 cents and part of the "bait" when persuading contributors that subscriptions were a good thing (Dreamstime had previously been credits only) was that increasing subscription sales would boost your images' level and thus increase your earnings when credit sales happened.

But subscriptions canibalized credit sales, the higher subscription royalties went away and I now earn much less at Dreamstime per year than I did. As an example of the rare credit sale, last September I had a level 5 image sold for $7.82 royalty (18 credits) but that is the exception

« Reply #37 on: February 16, 2022, 13:32 »
0
subscriptions have really worked from Canva, where they distribute monthly based on DL - my individual sales dropped dramatically but my total income doubled (often tripled) - steady since the program was introduced.  unfortunately we don't know exactly how many DL we had thru subscription.

wds

« Reply #38 on: February 16, 2022, 14:11 »
0
I still don't understand why the agencies don't try a pricing model where an image's price increases as its download numbers increase. They will make more, the contributor will make more.

This is exactly what dreamstime does.

Level 1 = 0 downloads
Level 2 = 1+ download
Level 3 = 5+ downloads
Level 4 = 10+ downloads
Level 5 = 25+ downloads

And, yes, I love this model.

Nevertheless, it has to be said that you can't earn big money at dreamstime because not enough sales come in. I have not even managed 3,500 downloads in the 10 years. Even if the RPD is good there, hardly anything comes in.

Interesting! I am not on Dreamstime and had no idea. How does it end up "dollars and cents"wise? What do you actually earn for a download of a "level 1" image vs. a "level 5" image?

...When this was introduced (many years ago) I had high hopes, but it has not worked out well at all. In the beginning, high level images sold via subscription netted a 70 cent royalty versus 35 cents and part of the "bait" when persuading contributors that subscriptions were a good thing (Dreamstime had previously been credits only) was that increasing subscription sales would boost your images' level and thus increase your earnings when credit sales happened.

But subscriptions canibalized credit sales, the higher subscription royalties went away and I now earn much less at Dreamstime per year than I did. As an example of the rare credit sale, last September I had a level 5 image sold for $7.82 royalty (18 credits) but that is the exception

I see your point. I guess in the world of subs, the "graduated scale" would have to have steep curve. Instead of "70 cent vs. 35 cent" it would have to be more like an order of magnitude for a top level image...more like "$3.50 vs. 35 cent" the customer would have to be willing to use "10 subs worth" for one image I guess.

« Reply #39 on: February 16, 2022, 15:09 »
0
for some/many buyers the value of an often used image is less than a never used one

« Reply #40 on: February 16, 2022, 16:00 »
+3
Our biggest enemy is free stock images and videos. Those sites are becoming more and more popular. Those sites are owned by companies like dreamstime, wirestock etc. Wether you are aware of it, agreed to it or not some companies like ones mentioned give your work for free in exchange for a small rate. Smaller than what shutterstock charges but without the overhead of reviewing photos, categorizing or keywording since thy come straight out of our ports.

If nothing was given away we would have a business.

I remember times when instead of "free stock", some people used to say microstock in the same context.  ;D

« Reply #41 on: February 16, 2022, 16:03 »
0
getting a bit of thread drift here, but as I recall with DT subs you could get 1,2,or 3 sub sales for .35, .70, and 1.05. I quite liked that and even the lowest sub sale meant the image was making progress towards a higher tier.  I think DT said the buyers were confused and complained about using up their sub allotment too quickly so DT dropped it. The higher level credit sales can be quite good, but they are also very rare. Nowadays it is almost all subs, although the rare other sales make a big difference in the total for the month. The percentage they pay is also tied to the image level for credit sales, so not only does a higher level sale cost the buyer more, but the artist gets a higher percentage of that.  As far as people wanting images that have little to no sales, I've got heaps of them - have at it. (although I do wish DT would pay a higher percentage for the level 0 sales (and all sales for that matter)).


« Reply #42 on: February 16, 2022, 16:15 »
0
The $0.70 subs no longer seems to exist at DT. As you can see in the screenshot I uploaded in the DT thread, most subs are at $2.00, some at $0.35 and a few at $0.38 and $2.20. That's more than many other agencies. But, as I said before, very little money comes in at DT because the download volume is very low.

wds

« Reply #43 on: February 16, 2022, 16:55 »
0
for some/many buyers the value of an often used image is less than a never used one

I get what you're saying, but there are plenty of never used images that nobody wants. I think generally it's more about the particular image.

« Reply #44 on: February 16, 2022, 17:26 »
+2
Our biggest enemy is free stock images and videos. Those sites are becoming more and more popular. Those sites are owned by companies like dreamstime, wirestock etc. Wether you are aware of it, agreed to it or not some companies like ones mentioned give your work for free in exchange for a small rate. Smaller than what shutterstock charges but without the overhead of reviewing photos, categorizing or keywording since thy come straight out of our ports.

If nothing was given away we would have a business.

I remember times when instead of "free stock", some people used to say microstock in the same context.  ;D

And they werent wrong either.

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #45 on: February 19, 2022, 12:18 »
0
Chairman Jonathan Oringer sold 11,934 shares of the companys stock in a transaction that occurred on Wednesday, December 8th. The stock was sold at an average price of $114.49, for a total transaction of $1,366,323.66.

He's going to miss out on that 96 a share dividend? I was just looking and thinking, for the shares he just sold, the dividends are about $11,000 a year.

Our biggest enemy is free stock images and videos. Those sites are becoming more and more popular. Those sites are owned by companies like dreamstime, wirestock etc. Wether you are aware of it, agreed to it or not some companies like ones mentioned give your work for free in exchange for a small rate. Smaller than what shutterstock charges but without the overhead of reviewing photos, categorizing or keywording since thy come straight out of our ports.

If nothing was given away we would have a business.

I remember times when instead of "free stock", some people used to say microstock in the same context.  ;D

Microstock was a natural adjustment and progression as a result of the Internet, computers, and digital art. Getty bought Tony Stone Images, a London stock agency 1996, and many others along the way after that. 1999 Getty buys Art.com (you can find that on the Walmart site as well as Amazon), 2006 Getty buys iStock.

What sites are owned by Dreamstime or Wirestock that give away free images? I seem to have missed the connection? I thought Wirestock was basically a distribution point and access? DT has a free site?

« Reply #46 on: February 19, 2022, 14:06 »
0
Chairman Jonathan Oringer sold 11,934 shares of the companys stock in a transaction that occurred on Wednesday, December 8th. The stock was sold at an average price of $114.49, for a total transaction of $1,366,323.66.

He's going to miss out on that 96 a share dividend? I was just looking and thinking, for the shares he just sold, the dividends are about $11,000 a year.

Our biggest enemy is free stock images and videos. Those sites are becoming more and more popular. Those sites are owned by companies like dreamstime, wirestock etc. Wether you are aware of it, agreed to it or not some companies like ones mentioned give your work for free in exchange for a small rate. Smaller than what shutterstock charges but without the overhead of reviewing photos, categorizing or keywording since thy come straight out of our ports.

If nothing was given away we would have a business.

I remember times when instead of "free stock", some people used to say microstock in the same context.  ;D

Microstock was a natural adjustment and progression as a result of the Internet, computers, and digital art. Getty bought Tony Stone Images, a London stock agency 1996, and many others along the way after that. 1999 Getty buys Art.com (you can find that on the Walmart site as well as Amazon), 2006 Getty buys iStock.

What sites are owned by Dreamstime or Wirestock that give away free images? I seem to have missed the connection? I thought Wirestock was basically a distribution point and access? DT has a free site?

Wirestock also sells individual images for $5 (click on portfolio, then an image)

« Reply #47 on: February 19, 2022, 23:17 »
0


Microstock was a natural adjustment and progression as a result of the Internet, computers, and digital art.


So are the free or couple of cents images. 300 million photos are just uploaded on internet every day and 1.5 trillon  photos are taken yearly. Some of them have to be good. Some of them are gonna be given away for free.

Uncle Pete

  • Great Place by a Great Lake - My Home Port
« Reply #48 on: February 20, 2022, 14:11 »
0
Chairman Jonathan Oringer sold 11,934 shares of the companys stock in a transaction that occurred on Wednesday, December 8th. The stock was sold at an average price of $114.49, for a total transaction of $1,366,323.66.

He's going to miss out on that 96 a share dividend? I was just looking and thinking, for the shares he just sold, the dividends are about $11,000 a year.

Our biggest enemy is free stock images and videos. Those sites are becoming more and more popular. Those sites are owned by companies like dreamstime, wirestock etc. Wether you are aware of it, agreed to it or not some companies like ones mentioned give your work for free in exchange for a small rate. Smaller than what shutterstock charges but without the overhead of reviewing photos, categorizing or keywording since thy come straight out of our ports.

If nothing was given away we would have a business.

I remember times when instead of "free stock", some people used to say microstock in the same context.  ;D

Microstock was a natural adjustment and progression as a result of the Internet, computers, and digital art. Getty bought Tony Stone Images, a London stock agency 1996, and many others along the way after that. 1999 Getty buys Art.com (you can find that on the Walmart site as well as Amazon), 2006 Getty buys iStock.

What sites are owned by Dreamstime or Wirestock that give away free images? I seem to have missed the connection? I thought Wirestock was basically a distribution point and access? DT has a free site?

Wirestock also sells individual images for $5 (click on portfolio, then an image)

This part? "Our biggest enemy is free stock images and videos. Those sites are becoming more and more popular. Those sites are owned by companies like dreamstime, wirestock etc."



Microstock was a natural adjustment and progression as a result of the Internet, computers, and digital art.


So are the free or couple of cents images. 300 million photos are just uploaded on internet every day and 1.5 trillon  photos are taken yearly. Some of them have to be good. Some of them are gonna be given away for free.

I suppose that's true. Free images don't pay the artists anything, but the sites that give them away, seem to find a way to make money, without paying anyone. Worse than Micropayments, and now chump change, the only step lower is Free for recognition, "exposure", or bragging rights.

If all of that is a natural trend, leading to free, we should be finding free news, instead of the sites going behind pay walls more and more. Free apps that actually work, instead of having to pay for some lame app to watch the weather radar. But photos went the opposite direction?  :(

Some people like free. I don't. People who go to a free site for an image, and a majority of those people, are unlikely to be someone who will pay for an image anyway. I just think that where free hurts is the segment of people, who would pay for and use our work, but they have an alternative.

So when people who need a job are going to lobby for lower pay and reducing minimum wage, that would be like people taking photos and giving them away, instead of earning something from their effort?  :o  ;D

« Reply #49 on: February 20, 2022, 16:57 »
+1
Big organizations aren't going to be trolling the internet for 'free'. When they need images or video, they need it timely, they need quality, they need to know it's legal, they need to be able to find what they want quickly and they need to be able to modify as necessary. So they will have a subscription to someone like Shutterstock because that is the most efficient solution. In the grand scheme of things, the cost is peanuts.


 

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