Subscription
To better understand the potential for an iStock turnaround it is worth comparing iStock and Shutterstock downloads. At the end of my report on
Shutterstock’s Q3 results I estimated the number of IOD (single image) and subscription downloads Shutterstock will have for 2015. For an explanation of how I calculated the iStock numbers see this
story. The following chart compares the sales of these two companies.
Previously, I have supplied an analysis (
here) and (
here) of iStock’s downloads in 2015 and the number of images 430 of their leading contributors have in the collection. While 430 is only a small percentage of iStock’s more than 100,000 contributors this small group has somewhere between 55,070,000 and 58,554.000 downloads since the company’s founding in 2002. I believe this represents about one-third of iStock’s total downloads.
An increasing number of iStock’s most productive contributors have been dramatically reducing their production of new images in the last two years.
Where is iStock headed? In 2015 single image downloads were DOWN significantly compared to 2014, and 2014 was down compared to 2013. The company
introduced subscriptions in April 2014 and that has had a major impact on the decline in single image sales.
Ever since Getty Images invented Premium Access (PA) licensing image creators have been upset that their images were being licensed to some users for ridiculously low prices. Often images licensed in this manner are ones that have been extremely costly to produce. For at least one contributor Rights Managed PA sales now represent 66% of total sales at an average price of $12.00 and over half the sales are for $4.35 or less.
Depositphotos, a New York-based stock photo platform with Ukranian origins, has announces a $5 million funding round led by the European Bank for Reconstruction and Development (EBRD) via the EBRD Venture Capital Investment Program. Previously TMT Investments had invested $3 million in Depositphotos in 201. In this round EBRD contributed $4 million and TMT $1million. The transaction should be completed before the end of the year.
In its race to grow its image collection, Shutterstock has made it easier for new contributor to get accepted. New contributors used to have to submit 10 images for quality review. Seven of those 10 had to be accepted before the contributor was allowed to submit more images. Now, if only one is deemed acceptable the contributor can begin submitting more images. Here’s the way Shutterstock explains the change.
Shutterstock has provided investors with some very interesting information about their Enterprise pricing strategy and how it differs from their normal E-commerce pricing. You can find the “E-commerce vs. Enterprise Case Study” by going go to this link (
http://investor.shutterstock.com/phoenix.zhtml?c=251362&p=irol-presentations). Then open the pdf under “Investor Presentation” that was uploaded on 11/18/15. The chart explaining the Case Study is on page 25 of this 37 page pdf.
Today,
Shutterstock reported $107.3 million in revenue for Q3 2015, a 28% increase over Q3 2014 and up nearly $3 million from the previous quarter. The increase was primarily due to a 22% increase in the number of paid downloads compared to a year earlier.
In an effort to compete with
AdobeStock, at the end of August
iStock began to test an offering of
Small Monthly Subscriptions with 10 and 25 download limits. The rates for 10 downloads are $40 for Essential (non-exclusive) images and $99 for the images contributors have supplied exclusively to iStock.
Recently, I asked
AdobeStock a number of questions about their operations. Their answers can be found below.
Rumors were flying in New York last week that
Corbis may be sold. The rumors are that
Shutterstock is interested in purchasing Corbis. The consensus seems to be that Corbis’ gross revenue is in the range of $100 million down from $225 in the mid-2000s. It is believed that about half of the gross comes from editorial and the other half from creative. (These figures may not include the rights clearance part of Corbis’ business.)
Masterfile is offering its customer a unique subscription plan to Crestock’s entire collection of 2.3 million photos, illustrations and vectors. Prices start at $50 a month to download 50 image with no daily download limits. For a one-year subscription commitment prices drop to as low as $37.42 a month to download up to 50 images per month.
After a long quiet period as a blogger, Yuri Arcurs has decided that it is time to
comment on Adobe Stock. Yuri is generally considered the most successful microstock photographer. For many years he was a strong advocate of non-exclusive representation, and placed his images with virtually every microstock distributor.
Scott Braut, Head of Content at Adobe, is scheduled to be the keynote speaker at the Digital Media Licensing Association (DMLA) (formerly PACA)
annual meeting in New York on Monday October 26, 2015 at 9:00am. Single session passes for the keynote address only are available for $65. For more information, see
here under events. (Hint: you may need to expand your window.)
Adobe has made it easier for companies with multiple designers (a creative team) to access, manage and license images from one shared Adobe Stock subscription at no extra cost. The service called “Pooled Images” allows an unspecified number of team members to have access to the same Adobe Cloud account.
Shutterstock, Inc. has hired photographers Chelsea Lauren, Rob LaTour, Stephen Lovekin, and Andrew H. Walker to bring the best event photography and celebrity portraiture to the company.
SuperStock has launched
Purestock, a subscription service that currently has about 3 million images, vectors and video clips. All the material on Purestock has been sourced from an entirely different set of contributors than those who supply Superstock and none of the Superstock images can be found on Purestock.
Shutterstock has announced that after “thoughtful consideration and exhausting many different ideas” it will shut down
Skillfeed at the end of the month. They are no longer accepting new subscribers or instructors. The platform will continue functioning for existing members until September 30th when website will be officially shut down.
Scott Braut, Head of Content for Digital Media at Adobe will be the keynote speaker at the
DMLA Conference (formerly PACA) in New York from Sunday, October 25th through Tuesday, October 27, 2015. Braut will actually be speaking at 9:00am Monday morning.
Shutterstock has released a
new infographic with information about how demand for certain subject matter is changing compared to a year ago. They have also included sample image in each category to give photographers a sense of what customers want.
For new readers, or those who may have missed some of what I have written over the last few months, the following are a list of stories worth looking at to get a sense of where the industry is headed.
Is Shutterstock in Serious Trouble? On August 5th the SSTK stock price closed at $50.75. On August 6th the company announced its
second quarter results and missed the projected revenue for the quarter by 1.5%. On August 7th the stock closed at $33.65, a 34% decline in 2 days.
NO! The company is not in trouble. Rather, financial analysts that closely watch Shutterstock are finally waking up to the realities of the stock photo business.
Today,
Shutterstock reported $104.4 million in revenue for Q2 2015, a 30% increase over Q2 2014. However, they missed their projected revenue estimate by $960,000. Investors were disappointed and the stock that had been trading at $50.75 per share the day before dropped 32.20% to $34.41 before the market closed. The average price per download during the quarter was $2.85 down from $2.87 in the previous quarter, and compared to $2.52 in Q2 2014. There were 35.9 million downloads in the quarter and they paid out about 28% of gross revenue in royalties to contributors.
In the subscription environment customers pay for -- and the image creators receive a royalty for -- many images that are never used in any type of deliverable product. Nobody knows how many. Adobe Stock has changed all that. Now Adobe gives users
free use to any images considered during the users design and creative processes. Users only pay for the images that actually end up in a deliverable product. As a result, creators may begin to see a significant decline in the number of images licensed.