Shutterstock is standing strong in its decision to cut costs by reducing payments to its contributing photographers, despite a tidal wave of recrimination that continues to wash over the microstock agency.
Since the pay cut came into effect on June 1, 2020, numerous contributing photographers report single payments of US$0.10 per subscription download, a significant drop from the usual US$0.25 – 0.38 fee.
Shutterstock photographers are furious. The Shutterstock Facebook page is awash with protests against the pay cut, with moderators deleting critical comments – ostensibly to create a ‘safe space’. Likewise the Shutterstock forums and Professional Microstock Forum is packed with contributors attempting to make sense of things.
Abdullah Korkmaz is calling for Shutterstock to revert back to the old system through a Change.org petition, which has garnered almost 8000 signatures. He told Inside Imaging it’s no surprise how many contributors signed the petition, as ‘no one would be happy with the new system’. He sent Shutterstock the campaign and received this response:
I sincerely apologise for the inconvenience caused to you. We hear your concern with the new earnings structure changes. The decision to make these changes was not made lightly and was done with much consideration for all of our contributors.
Shutterstock aims to fairly compensate our contributors for the time and talent invested in the production of their work. Given the market has changed significantly since Shutterstock was founded in 2003, we have made changes to better reflect the current market.’
The pay cut was implemented via an overhaul of the Shutterstock Earnings Breakdown structure. The old system paid photographers based on their lifetime earnings. It’s now determined by how many images are licensed each year. All contributors bizarrely start back at level one each year, resulting in a sudden annual pay cut for most sellers.
Shutterstock licenses are primarily purchased through subscription plans, where a customer pays a monthly fee for bulk access to images. More expensive plans buy a greater number of image licenses at a lower cost.
Richard Whitcombe, a Welsh underwater photographer, celebrated his 10th anniversary with Shutterstock last month but he’s becoming estranged from the platform. He contributes to other stock platforms, but with 40,000 lifetime sales, Shutterstock accounts for roughly 65 percent of his microstock income.
He informed Inside Imaging a major problem is Shutterstock’s lack of transparency in regards to pricing.
‘Most of us have tried calculations, but they’re very hard to do as Shutterstock consistently refuses to publish its full price list,’ he said. ‘So we know the percentage we get but not the actual amount paid by customers.’
While it’s early days, he’s recorded a 50-60 percent drop in income and isn’t looking forward to the further losses when January 1 rolls around and he is sent back to the miserly Level 1 fee.
‘When these changes first came out everyone went nuts about the reset in January, and with good reason – its a huge hit every year and will make Shutterstock a lot more money. The one thing people didn’t realise at first, which was likely more significant, was the change to subscription (pricing) and other downloads,’ he said. ‘Typically most people get US$0.25 to 0.38 per download. Under the new scheme this is down to US$0.10, if the customer has one of the bigger plans, and it seems most do. I’m seeing many sales for US$0.10 – 0.17. A few higher, most lower. It doesn’t sound like a big change but subscription sales make up nearly 70 percent of most peoples’ image income. You’d expect to sell many hundred a month, so the drop is huge. In January on the Level 1 reset this will be even worse.’
Tony McAulay, a Glasgow-based photographer, averaged around 3000 sales per year. After two days he ‘saw enough to disable my portfolio, my work is worth more than 10 cents’.
‘I will no longer upload new content until this decision is reversed. I upload to several other sites already and have done for about 14 years,’ he explained to Inside Imaging. ‘If anything, Shutterstock actually owe the contributors a raise, as the last one was about 12 years ago. Unfortunately I don’t see them backing down and the end result will be poor quality images on sale from hobbyists that are glad to earn anything. That’s not me, or thousands others like me.’
Richard speculates the motivation behind the pay cut is ‘aimed for the purpose of being able to drop their prices massively to either improve shareholder dividend or compete in the gutter with iStock’.
Shutterstock’s 2019 financials
In its 2019 Annual Report, Shutterstock’s revenue is up five percent to US$650 million (around AU$1 billion). It’s Cost of Revenue, which includes but is not limited to payments to contributors, was US$278 million – an increase of four percent. Interestingly, sales and marketing went up nine percent, along with general & admin costs up 16 percent. Shutterstock seems to have lost control of these operating expenses, leading to a drop in income from operations of 38 percent and drop in net income of 63 percent. Instead of focussing on internal cost reductions, Shutterstock has taken the lazier option of dropping payments to contributors.
According to the Annual Report, the average download cost is $3.43 across photo and video, but the average payment per download to contributors is not indicated. Given the figures in the graph below, it would appear that contributors until now have received around 80 cents of that average download fee.
While the Cost of Revenue went up just four percent in 2019, the number of contributors increased from 750,000 to 1.2 million, a massive increase of over 60 percent. This means the average payment to individual contributors has plummetted even without the new scheme. And with so many contributors, a few thousand who are unhappy at being shafted is probably not seen as much of a problem at head office.
Shutterstock has also recently committed to pay a 17-cent dividend paid to shareholders on an ongoing, quarterly basis. It’s pretty clear by its actions, rather than its weasel words, that in the hierarchy of stakeholders, contributors come a distant fourth after Shutterstock executives, shareholders and customers.
To sign the Change-org petition protesting Shutterstock’s shenanigans, click here.
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