Many photographers who used to earn hundreds, and even thousands, of dollars for the use of one of their images think Shutterstock, and Microstock in general, are killing the stock photo business. Some Shutterstock contributors are even beginning to ask the same question. A reader recently asked for my analysis of why Shutterstock’s continued addition to its collection of over 700,000 new images a week won’t “drown it’s customers and risk losing its best contributors.”
The first thing to recognize is that there is not much any of us can do to stop, or alter Shutterstock’s direction. They are confident in their strategy. With over $400 million in gross annual revenue and spending about $100 million a year in marketing there is not much anyone can do to compete at anywhere near traditional prices.
There are certainly too many images. But it seems that Shutterstock (and Alamy, AdobeStock and Getty, I might ad) believe that more and newer images are always better. And as they race to suck up all the images they can, from as many sources as possible regardless of the source’s understanding of what buyers are actually willing to purchase, and with no curation; they make their collections less usable for serious image buyers.
The problem for these companies, as I stated in
Curated Collections: The Future, is that many of the serious, high-end buyers are becoming very frustrated with sites like Shutterstock’s and the time it takes to find something useful. They are looking for alternatives.
Shutterstock and the other companies with huge collections argue that they use technology and data rather than human sources for curation, but increasingly buyers are saying that is not working.
Shutterstock recognizes the problem to some extent and has created
Offset and Premium Selects. These are both curated collections. Unfortunately, image creators know very little about Premium Selects because only Shutterstock’s “Enterprise” customers who are willing to pay higher prices for more service and better curation are able to see what is in this collection. I wish I could tell you more about it, but I have never been allowed to look at the collection.
What Shutterstock has reported is that they have more than 20,000 customers worldwide who have signed “Enterprise” agreements. Sales to these customers represent about one-quarter ($100 million) of their 2015 gross revenue. They put out some information that indicated that the average price per image licensed was about $100, but this may have only been for illustration purposes. The actual average may be quite a bit lower. Prices for image on
Offset are $250 for web use and $500 for print use.
To put this in perspective, I recently had the opportunity to examine the 2015 sales of a large Getty contributor. Eighty percent of the revenue was generated by customers who were willing to pay over $200 for the images they used. And the average of these sales was $395. Not as high as it used to be back in 2007, but not too bad. But while these sales represent 80% of revenue they only represented 17% of total sales.
Two-thirds of the sales were for prices under $25 with an average price of just above $4.00. Put all this together and the average price for total sales was in the neighborhood of $86. And these small sales represented about 3% of Getty’s revenue from this photographer’s images.
Yes, the existence of Shutterstock and iStock (owned by Getty) may have forced Getty to lower prices in order to hang onto customers. But, are customers that represent only 3% of gross revenue really worth having? Would Getty have been better off to focus on serving the 17% who are willing to pay higher prices?
It is certainly clear that there is a segment of the buying public that is willing to pay higher prices for quality imagery and better service. The question, for which I have no clear answer is, “Are there enough of them to justify continued production by professional photographers?” Many top professionals have decided NO, and stopped producing.
If there were better curation, making it easier for customers to find the best images, and if the work of photographers who consistently produce the kind of images customers want to buy has a better chance to rise and stay near the top of the search return order, will that be enough to make stock photography a sustainable business model for image producers? Will the revenue generated be enough to cover the cost of human curation? It certainly seems unlikely that such an operation would throw off the kind of profits Shutterstock is currently realizing.
There are some niche agencies that are focusing on curation with some success. (See
Curated Collections: The Future.) More may develop. But, it is not at all clear that they will be successful.
Stock photography may no longer be a viable way to earn a living. For many it can provide a supplement to some other primary source of income. Times change.