When Adobe takes over
Fotolia will
Shutterstock and
iStock be forced to lower their Image On Demand (IOD) prices?
The following are the current comparisons
| |
Shutterstock |
iStock |
Fotolia |
Fotolia |
| |
Yearly |
Yearly |
Yearly |
Monthly |
| |
|
|
|
|
| 1 Credit |
|
$12 |
|
|
| 2 images |
$29 |
|
|
|
| 3 Credit |
|
$33 |
|
|
| 5 Images |
$49 |
|
$36 |
$20 |
| 24 Credits |
|
$220 |
|
|
| 25 Images |
$229 |
|
$140 |
$60 |
| |
|
|
|
|
Since
Getty lowered iStock prices last September non-exclusives images on iStock and Shutterstock images are priced about the same – roughly $10 per image for any file size. (Exclusive images on iStock require 3 credits so they are much more expensive.) However, Fotolia's IOD prices are 25% to 60% lower than Shutterstock on a yearly basis, and 60% to 75% lower if the customer purchases a Fotolia image pack on a monthly basis.
In the last couple of years Adobe has made a major shift in its business and moved from selling shrink-wrapped products that can be used forever in favor of monthly subscriptions with unlimited access and all updates. With the old system customers tended to use their software for years and years without paying for the new features offered, since the basic, early software already had many more capabilities and features than they ever used. Subscriptions provide a much more predictable income stream for Adobe.
Unfortunately, the image business doesn’t lend itself as well as software to subscriptions. Image needs for most customers tend to vary greatly month-to-month and project-to-project. If the price per-image is cheap enough subscription pricing tends to average out over time for big users. It also offers such customers the advantage of knowing month-to-month what their image bill will be.
But for small and medium size users it is often better to pay for images as needed rather than purchase a subscription ever if each image used costs more. Given average single image prices today subscriptions can be much more expensive than buying images as needed, one at a time.
Over the past decade there has been huge growth in the number of images downloaded via subscription. Shutterstock has been the subscription leader and probably has 10 or more times the number of downloads annually as any of the sites licensing single images. But, I believe most of the large users that can make effective use of subscriptions already have arrangements with some supplier. They are not likely to switch unless the supplier they work with makes some major mistakes, or some other company begins supplying dramatically better search or image quality. I don’t see any indications either is likely to happen.
Customers are not looking for more subscriptions. They want to buy just the images they need, when they need them, at a reasonable price. A few years ago virtually all of Shutterstock’s sales were via subscription. In 2014 their subscription sales probably represented about
41% of their gross revenue, and IOD represented about 34% and growing. This despite the fact that on average customers paid at least 8 times or more for each IOD image as they would have had to pay for images purchased through a subscription.
Subscription prices for Shutterstock, iStock and Fotolia are about the same. Adobe will have a very difficult time finding an attractive subscription price point that they can market in conjunction with their other subscription products. Thus, it seems likely they will simply direct their Creative Cloud customers to Fotolia whenever they need images. Adobe’s major selling point will not only be that the customer can with one click be on Fotolia and with one more click back in whatever Adobe program they are using. Rather, it will be that the images they find on Fotolia will cost much less than those they find on other stock sites.
While Adobe has 3.45 million users of all the various services it offers on its Creative Cloud and Shutterstock only has about 1 million customers who have purchased images from them, I suspect that most of Adobe’s additional customers who have never used Shutterstock seldom, if ever purchase images.
It seems to me Adobe’s single competitive advantage will be that many of the images customers can find on Shutterstock are also available on Fotolia at much lower prices.