I liked this part:

"The biggest problem for the company may lie in the fact that it generated a gross margin of over 61% during Q1 2013. This shows that the business model is lucrative, but also shows that there are plenty of additional profits that could be distributed to contributors should a competitor decide to get aggressive in its pricing. If company XYZ is willing to pay double to its contributors what Shutterstock is willing to pay, and can scale into the same size of business with the same amount of customers, which platform do you think contributors would choose? "

The writer is pointing out what many of us already know, which is that SS is basically a middleman making a killing, and could in fact be paying contributors much more - it just hasn't been necessary.

I liked this part:

"The biggest problem for the company may lie in the fact that it generated a gross margin of over 61% during Q1 2013. This shows that the business model is lucrative, but also shows that there are plenty of additional profits that could be distributed to contributors should a competitor decide to get aggressive in its pricing. If company XYZ is willing to pay double to its contributors what Shutterstock is willing to pay, and can scale into the same size of business with the same amount of customers, which platform do you think contributors would choose? "

The writer is pointing out what many of us already know, which is that SS is basically a middleman making a killing, and could in fact be paying contributors much more - it just hasn't been necessary.

The writer doesn't even begin to understand our industry. If you read the next line after the one you have quoted (somewhat out of context) it becomes obvious. He doesn't realise that SS contributors are not exclusive and, in fact, already have their content on SS's existing competitors.

I think he is correct in that SS is currently over-valued, but not actually for all the reasons he has assumed. Facebook, for example, is way more over-valued than SS on any metric you care to name ... but still the market sustains a ludicrous price.

Quote from: stockastic on July 13, 2013, 15:29

I liked this part:

"The biggest problem for the company may lie in the fact that it generated a gross margin of over 61% during Q1 2013. This shows that the business model is lucrative, but also shows that there are plenty of additional profits that could be distributed to contributors should a competitor decide to get aggressive in its pricing. If company XYZ is willing to pay double to its contributors what Shutterstock is willing to pay, and can scale into the same size of business with the same amount of customers, which platform do you think contributors would choose? "

The writer is pointing out what many of us already know, which is that SS is basically a middleman making a killing, and could in fact be paying contributors much more - it just hasn't been necessary.

The writer doesn't even begin to understand our industry. If you read the next line after the one you have quoted (somewhat out of context) it becomes obvious. He doesn't realise that SS contributors are not exclusive and, in fact, already have their content on SS's existing competitors.

I think he is correct in that SS is currently over-valued, but not actually for all the reasons he has assumed. Facebook, for example, is way more over-valued than SS on any metric you care to name ... but still the market sustains a ludicrous price.

Good point if we started pulling our content off sites that gouge us they would be forced to pay fair royalties.

A good place to start removing content would be BS.

'

Quote from: gbalex on July 13, 2013, 16:17

Quote from: gostwyck on July 13, 2013, 16:07

Quote from: stockastic on July 13, 2013, 15:29

I liked this part:

"The biggest problem for the company may lie in the fact that it generated a gross margin of over 61% during Q1 2013. This shows that the business model is lucrative, but also shows that there are plenty of additional profits that could be distributed to contributors should a competitor decide to get aggressive in its pricing. If company XYZ is willing to pay double to its contributors what Shutterstock is willing to pay, and can scale into the same size of business with the same amount of customers, which platform do you think contributors would choose? "

The writer is pointing out what many of us already know, which is that SS is basically a middleman making a killing, and could in fact be paying contributors much more - it just hasn't been necessary.

The writer doesn't even begin to understand our industry. If you read the next line after the one you have quoted (somewhat out of context) it becomes obvious. He doesn't realise that SS contributors are not exclusive and, in fact, already have their content on SS's existing competitors.

I think he is correct in that SS is currently over-valued, but not actually for all the reasons he has assumed. Facebook, for example, is way more over-valued than SS on any metric you care to name ... but still the market sustains a ludicrous price.

Good point if we started pulling our content off sites that gouge us they would be forced to pay fair royalties.

A good place to start removing content would be BS.

bigstock pays better than sutterstock but probably not for much longer.

I agree, they put bridge to BS in place so that they could push direct sales efforts for large enterprises to BS thereby increasing Revenue per download.


Snip
Finally, as our third area of strategic focus we continue to expand our direct sales effort to large enterprises. As you may recall, over 70% of Fortune 500 companies already have at least one Shutterstock user account. However, the amount that these companies are spending with us is still just a small fraction of their overall spend.

Our direct sales team continued to make impressive progress in Q4, closing key master service agreements with large agencies and publishers and steadily growing direct sales revenue. We�re excited about the progress we have made with large enterprises during the quarter and look forward to expanding our relationship with these larger companies over time.

Snip
Our direct sales team continued a strong trajectory, delivering a record quarter. Direct sales continues to be one of the fastest growing areas of our business. We�re especially pleased with our large agency sales which are gaining promising momentum, and in the quarter we continued to add sales personnel in key markets. In the US we added new hires in Los Angeles, Chicago, and New York.

Snip
Revenue per download also showed a nice increase, increasing 7% to $2.30 as compared to $2.14 in the same period a year ago. This increase in revenue per download as in past quarters continues to be driven by the mix of pricing plans that our customers select. We have a higher effective cost per download in certain pricing plans, particularly our direct sales efforts to larger customers and our on-demand plans both of which are growing faster than the overall business, and that has continued to cause the average revenue per download to increase over time.

Note that we have not raised prices for several years and that this shift is due solely to mix shift. 

http://seekingalpha.com/article/1214061-shutterstock-s-ceo-discusses-q4-2012-results-earnings-call-transcript?part=single