Microstock photo agency, ShutterStock, has infuriated contributors by announcing an overhaul of its royalty earnings structure, resulting in a major pay cut for its top photographers.
Shutterstock is a major player in the microstock race-to-the-bottom business model. The once-lucrative stock photography market, a sole income source for many photographers, has been reduced to a supplementary income avenue only worth a few extra dollars. Over time agencies like Shutterstock and Getty Images have driven down the price of stock photography, while simultaneously lowering contributor commission fees.
Despite its role in eroding the market, Shutterstock maintained loyal contributors partly due to its ‘Lifetime Earnings’ payment structure – four tiers rewarding photographers based on their sales generated over a lifetime.
New contributors start out at the lowest tier, US$0 – $500, and earn $0.25 per subscription image purchase or $0.81 per on-demand image (small-medium). Long-time contributors, who have generated over US$10,000+, earn $0.38 per subscription image or $1.24 per on-demand image.
It’s a significant difference, especially if a contributor generates hundreds of sales off an existing library. They sit back and allow the Shutterstock sales build, and enjoy the long-term benefits of sticking with them. Well, not anymore!
Shutterstock’s new royalty structure resets every year, and the photographer’s fee percentage rate is determined by six tiers that’s based on how many images are licensed each year.
Photographers at the First Tier will earn a 15 percent cut until they license 100 images, Second Tier photographers earn earn 20 percent until they move 250 images, and the top Sixth Tier earns a photographer 40 percent after licensing over 25,000 images. When January 1 rolls around, all contributors move back to the First Tier and climb back up the ladder.
The new structure will kick into effect from June 1 – Shutterstock provided just five days notice – and contributors will start at the tier based on their download count for 2020.
Naturally, Shutterstock attempted to frame this as some kind of virtue to contributors. ‘We are making this adjustment in order to reflect changes in the market for creative content, help to create fair opportunities for all our contributors, and reward performance with greater earnings potential,’ Shutterstock told contributors in an e-mail.
Back in February Shutterstock founder and CEO, Jon Oringer, stood down and was replaced by Shutterstock president, Stan Pavlovsky. Shutterstock went public in 2012 and in two years the share price surged over 600 percent, making Oringer New York’s first tech billionare with a 50 percent ownership of the company. But, in recent years, Shutterstock has underperformed the market and Pavlovsky was brought in with, in classic corporatese, a ‘three-legged strategy’, which involves ‘expanding the marketplace’s margins’.
This blatant pay cut to long-time photographers is clearly designed to benefit Shutterstock and its shareholders, who probably need a reason to hang on as the corporation attempts to bounce back on the New York Stock Exchange. Contributors on the Shutterstock forums have naturally responded accordingly.
Richard Whitcombe, an underwater photographer with over 14,000 images on Shutterstock: ‘Just when you think Shutterstock couldn’t completely and utterly screw the contributors and more you’ve gone and done it,’ wrote Richard Whitcombe, an underwater photographer with over 14,000 images on Shutterstock. ‘Effectively with a January reset, everybody gets a cut of 20 percent or more of earnings to a new laughably tiny amount and it’ll take months to claw back the level they’ve been earning previously. So most people are going to go most of the year for half or less than they currently get. It’s a plus 50 percent pay cut for most users. You’ve descended to iStock level of contempt for contributors.’
THPStock, an Australian contributor with 6480 images in Shutterstock: ‘I almost never come to the forums despite being with Shutterstock for a decade and referring thousands of customers and buyers. But this announcement is so bad that I just had to say something. Why would you follow the same path that you have seen other agencies take, that every single contributor has hated and been angered by?
As if the overall strategy of this isn’t bad enough, this line is the real kicker: “All contributors reset to level 1 for both images and videos every year on January 1st.”
So for the first few months of the year, many contributors will be earning 15-25 percent only! Even big contributors have to take a hit on their first few sales every year?! Why?! I know it’s too late, but this whole approach should be reversed.’
Martin Christopher Parker, with 3289 images on Shutterstock: ‘Wow your greed knows no bounds. That’s the end of my account with you. I suspect I won’t be the only one.’
Todd Taulman, a US photographer with 1643 images on Shutterstock: Just the next way the corporation screws the creatives. With over 40,000 lifetime downloads for this company, I find this reprehensible, but not unexpected. Death of stock imagery is coming. Better for my studio, creating more custom content for clients.
But you know all of us could screw the corporation by not uploading any content. Organise into a union and demand better.
And on it goes, for 75 pages on the Shutterstock forums, with the vast majority of users extremely unhappy. A Change.org petition calling for Shutterstock to remove this ‘injustice to its contributors’ has garnered over 3400 signatures in two days.
So, will Shutterstock listen to the pleads from its contributors? Or will the tasty financial benefits from this pay cut drown out all background noise?