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Shutterstock shares middle finger with contributors

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.

Shutterstock logoSince 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.

Shutterstock screenshot
A screenshot of the typical discourse happening on the Shutterstock Facebook page.

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.

Shutterstock new schedule
The new system took effect on June 1, 2020. All contributors will shift back to Level 1 on January 1.

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 share price
The sharemarket seems to approve of the cutbacks to contributor payments, judging by the uptick in the share price since the announcement. (Btw – that Price Earnings ratio of 80.74 indicates Shutterstock shares are wildly over-priced.)

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.

Shutterstock Contributors
Of the US$650 million in revenue in 2019, Shutterstock paid out US$164 million – or around 25 percent – to contributors, according to this graphic. The new contributor payment cutbacks should bring that figure in well under 20 percent. (Source: 2019 Shutterstock annual report)

 

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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25 Comments

  1. Jeroen Mikkers Jeroen Mikkers June 5, 2020

    “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.”

    I don’t think it will be just a few thousand and they underestimate this hugely. They shot themselves in the foot, as especially the high quality content contributors will be disabling or even remove their ports.

  2. Mike Inkley Mike Inkley June 5, 2020

    This is utterly scandalous of course. If correct, the intention to pay a 17 percent dividend is immoral and we are in a technological place where costs should be quite easy to control. The January reset is also bizare. Imagine if you said to any other organisation you reset everyones seniority and salaries to the lowest level in January….. Sadly stock photography is dumming down as some commercial scenarios have with people giving away images just to be noticed and Shutterstock are right at the forefront.

    • Keith Shipton Keith Shipton June 5, 2020

      Hi Mike. That dividend is 17 cents per quarter, rather than 17 percent. So 68 cents per year. Cheers.

      • Lu Lu June 9, 2020

        The main problem is not January reset, but payment have fall because of coronavirus for 40% + Shutterstock had lowered our income in 4 times. It is a slave conditions of work

  3. Richard Durham Richard Durham June 5, 2020

    I have sold well over 1,000 photos through a Photo Agency earning very good money. They cut the payments drastically, quite a while back, so I stopped supplying to them. Simple.There are other Agencies although I must admit that many are also dropping their payment ratio.

  4. Richard Durham Richard Durham June 5, 2020

    I have sold well over 1,000 photos through a Photo Agency earning very good money. They cut the payments drastically, quite a while back, so I stopped supplying to them. Simple.There are other Agencies although I must admit that many are also dropping their payment ratio.
    The problem has arisen due to Mobile phones now taking magazine quality photos and so many people want to see their image in a magazine so they give it to the magazine free, hence magazine do not pay for photo now.

  5. Alison W Alison W June 5, 2020

    It is important that we as a community reject these laughable payouts. Move agencies. If Shutterstock cannot afford to pay for good quality images they likely cannot attract customer volume. If they cannot do that they cant be viable option to sell artists work any longer. The community will follow the customers and visa versa. Shutterstock who?

  6. Jasmin Jasmin June 5, 2020

    Shutterstock has 1.2 million „registered contributor accounts“, not active producers.

    The company is 15 years old and every year thousands of fresh new people sign up hoping to pay for their camera gear and vacations by selling images.

    In the last few years, SS dropped their stringent quality approval process, which lead to a vastly bloated image library and far too many people signing up who really know very little about photography.

    However, they quickly realize how much work it is and that for amateur content, which has not been produced specifically with a target buyer group in mind, there is little demand and rarely any sales. So after 1,2,3 years…they give up and move on.

    The microstockgroup is the largest professional producer forum and has 47 000 registered members. That number really hasn‘t changed much in the last few years. And again, not all of them are active, because that forum is also over 12 years old.

    So overall, worldwide, the professional production teams are a much smaller group, maybe 20-30 000 people and the top 500 producers create the most relevant content worldwide.

    Please consider amending your article above. To suggest that Shutterstock has 1 Million active contributors is very misleading.

    They receive 1 million new photos a week, that does not mean 1 Million people are sending in 1 photo weekly.

    Crowd intelligence platforms don‘t work that way.

    Thank you for the well researched article.

    • Keith Shipton Keith Shipton June 7, 2020

      Thanks Jasmin. Good points well made. So maybe the Shutterstock management might actually take note of the anger it has engendered. And I see the similarly miserly Dreamstime has lifted its rates 10 percent. Coincidence or unintended consequence? Cheers

  7. Adrian Adrian June 6, 2020

    This madness will pass, but we will still be here, producing quality works that producers need. Producers needs us, not them. Nobody needs parasites.
    Their time is coming. Not today or tomorrow, maybe not this year, but they will live to find themselves making a living from what they are really producing – nothing. And we will be here to rejoice.

  8. Colin Cramm Colin Cramm June 6, 2020

    Shutterstock has been one of the two/three main pillars of my microstock revenue, and the main reason why I felt so compelled to get into microstock 10 years ago.

    It’s very sad that this pillar is now being demolished by Shutterstock’s very own management. It’s sadistic, greedy and downright cruel.
    Don’t forget to mention the fact that all of this is deliberately done in the midst of a global pandemic. Aside from stress about the health and well-being family and loved ones, thousands of artists were suffering loss of income, loss of jobs or freelance work. And in comes Shutterstock with this absolute train wreck of a plan. The timing is beyond disgusting.

  9. Mack London Mack London June 6, 2020

    I have worked in the photography industry for over 30 years and the recent move by Shutterstock to cut its photographers’ commissions by up to 75% is by far the most stupid move by a stock library I have ever seen – and there have been some real stinkers in the past so this is truly saying something. In the middle of a global pandemic when everyone is hurting, both financially and in some cases medically, Shutterstock has chosen to hit hardest those who are most vulnerable; the freelancers whose hard work carried them up the ladder of success to become the global leader they are now. It is without a doubt the cruelest blow they could have inflicted upon their so-called partners in their time of greatest need and although Shutterstock, their board and their investors may not realise yet, without a swift reversal it has sounded the death knell of their own company. Shutterstock do not own the product they sell, the artists who created it give them permission to sell it on their behalf, when that contract of trust and mutual benefit is betrayed the rot sets in, the ship starts to leak and eventually it will sink. Many buyers have left and even more creators have already removed their content from the site, this exodus of income and resources will continue until there is a reversal of policy or at least some positive changes. Unfortunately it seems that arrogance and incompetence have walked hand in hand into the boardroom, looked for an easy option to create the illusion of a healthy increase in profits while at the same time cutting the supply chain of vital product that the company needs just to survive, let alone thrive and expand. The microstock market was hard enough for artists before this move by one of the leading players, sadly what they have done will make it impossible, they have truly killed the geese that for them were laying golden eggs.

  10. Mike Mike June 6, 2020

    Hugely disappointing move by Shutterstock. I’ve sold over 20k images with them and recommended over 600 new contributors. It feels like they don’t give a cr***

  11. Danny Cassidy Danny Cassidy June 10, 2020

    Absolutely disgusting. Very disappointed and I am cashing out and cancelling my account. I want nothing more to do with this useless, money-grab of a company anymore. Best of luck to anyone staying with them, but I will not recommend Sh|tterstock at all.

  12. Sander Sander June 10, 2020

    I like to think that this is why Jon Oringer has signed off. He didn’t want this to happen and said goodbye to his own company. But it’s probably not like that. He signed off because he build the company to what it is today, super successful.. Made himself a millionaire and thought it would be a good time to go. The new boss didn’t have the heart for the company and just looked for the most easy thing to do.. Came up with this ugly idea with his snake friends and just went for it. Fuck the contributors right?! They have what, 350 million photo’s online? So, if they take 10 million offline, what the heck does it matter. People these days would do anything for a few bucks… They’ll come back, or new people will still come in and sell their photos. I’ve been a contributor for 6 years, and sold a lot of photos. More than 10.000 .. It was great the first few years. But they started coming up with very bad updates that messed around with the algorithm. New photos didn’t got sold easily after that, and many contributors hated the update. Still they kept it like that.. To be honest, they never ever have given a damn about their contributors in the first place. I have written so many emails to them, to just simply change back one little stupid thing.. One thing that gives the contributor better insight in his sales… It would be easy for the tech team to change it back to the way it was, like 1 minute of work. and they always replied that they cared so much and they would send it to their tech team….. Well guess what, never ever did they change it back.

    Us contributors can go to a page called ”best performers’ and you can see what photos are successful. Normally i would categorize them to number of downloads. That way, it’s easy to see.. The photo with most downloads is the most popular photo. But they disabled this stupid little function… Now they automatically categorize the photos on most earned dollars. But some photos sale for $80 ( i guess now they won’t anymmore) .. But so you’d have 1 photo that sold once for 80 bucks,, and one photo that sold 220 times for the (then) average price of 0,36 cents. With their system, the photo that sold for 80 bucks is more ‘popular’ than the one that sold 220 times. You see, this doesn’t tell the popularity at all of that 80 bucks photo. Well anyway, i have asked them to put it back the way it was, and they never did. They don’t give a single f*ck. And you can see that again with this super ugly payment update, in pandemic times… I disabled my account and even if they do get back to their old system, i won’t think about going back to those blood suckers.

  13. Matt Matt June 10, 2020

    Been with them about 7 years and I am totally floored by this move!

    • Matt Matt June 11, 2020

      It would be 7 years in October for me as well.

  14. Elliott Bignell Elliott Bignell June 10, 2020

    I’ve taken down my own portfolio, which is at over 8,500 shots and took two years to build up. The returns were pitiful and derisory as it was, but this is an outright insult. As a matter of self-respect I think it appropriate to act.

    If anyone else wants to do so, it is possible to leave your material on the site while switching off a “for sale” option, in the account settings.

  15. clay harrison clay harrison June 11, 2020

    I was at .36 per image , now at .10 for most images. I make a few thousand per year, mostly with video sales. It was never meant as a full-time thing, but it was a nice way to make some extra cash and deduct travel expenses. The resetting of revenue scales each year is a real slap in the face.

  16. Ravi Natarajan Ravi Natarajan June 11, 2020

    I am disappointed to say the least with this recent change to the contributor fee structure by SS. I also notice that their process of approving images is faulty as they reject images that are in perfect focus as ones that do not. Overall, I have given up on SS, the way I gave up on Alamy.

  17. Justin Justin June 11, 2020

    “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.”

    While $.10 payments are common, this is misleading criticism, in my opinion, suggesting that $.10 is all one will see. However, $.10 is just the minimum payment. Look at a (unofficial) pay table that I’ve tried to construct based on my understanding of pay packages and percentages: http://www.statisticool.com/shutterstock_unofficial_pay.jpg

    Personally speaking, I’ve made more in June so far than in all of May.

    Justin
    http://www.statisticool.com/main.htm

  18. Billy Billy June 12, 2020

    My daily pay from this wretched company has fallen 60% since the beginning of June. Some of the bigger contributors whose lives literally depend on their income from Shutterstock will have a lot of difficulty paying the bills now.

  19. Maria Maria June 14, 2020

    Im Contributor at level 4 and i do receive mostly 0.1 – 0.14 usd per picture.
    Todays earnings or the reset in January will not do much difference, the massive cut is already in place. The problem are the super cheap subscription packages Shutterstock sales: any % out of them is 0.1 usd. There is a responsibility of the Seller (Shutterstock) vs photographer which we see it failed and i do ask myself on the typical subscription buyers : do YOU have any social responsibility, do YOU think getting pictures (almost or fully) for free is ethical..?

  20. Fotograf Nunta Fotograf Nunta June 18, 2020

    I have sold well over 1,000 photos through a Photo Agency earning very good money. They cut the payments drastically, quite a while back, so I stopped supplying to them. Simple.There are other Agencies although I must admit that many are also dropping their payment ratio.

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