Can Shutterstock Grow Revenue?

Posted on 5/1/2018 by Jim Pickerell | Printable Version | Comments (1)

Shutterstock ought to think about raising prices. Clearly the number of images download is flat and not likely to grow significantly in the future. Just look at the quarterly download numbers for 2016 and 2017.

  Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
  2015 2016 2016 2016 2016 2017 2017 2017 2017 2018
Downloads (millions) 39.8 41.2 43.4 41.2 41.1 43.5 42.7 41.9 43.9 43.7

The overall market for stock photographer is not growing. For years Shutterstock got away with taking market share away from Getty. They though that because their downloads were growing that the market was growing. In reality they were just taking customers away from Getty.

Getty resisted lowering prices for a while, but by the end of 2015 they got their prices in line with Shutterstock’s and stopped the loses. Getty is not gaining, but they are not losing anymore.

Meanwile, in early 2017 Shutterstock finally realized that the 750 and 350 were no longer such a good deal for many of their customers given that on average customers were only downloading about one-quarter of the images allowed each month. The Getty/iStock and AdobeStock offerings had also become more appealing to many of Shutterstock’s customers.

Shutterstock added 10 and 50 image packs to their offering that were much more appealing to customers who really didn’t need very many images. The average price per image was a little higher, but the customer saved money compared to what they would have had to spend for a 350 image pack.

As a result of the higher priced packs average price-per-image downloaded increased, but the overall number of images used hardly moved at all. I believe video downloads have been increasing as customers are using more video clips and fewer stills in their online projects. Since Shutterstock includes video downloads in their average price figures, I believe that video downloads are responsible for a significant portion of the average price-per-image-downloaded increase.

  Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
  2015 2016 2016 2016 2016 2017 2017 2017 2017 2018
Rev.per DL $2.86 $2.77 $2.81 $2.91 $3.02 $2.96 $3.05 $3.23 $3.33 $3.40

Shutterstock doesn’t break out the numbers of video and still image downloads, but if they did I believe we might see that still image downloads are actually steadily, but slowly, declining. They are certainly not growing.

Meanwhile, to try to generate more business they increased theirs Sales and Marketing expenses by 28% in 2017 compared to 2016 and these expenses represented almost $140 million in total revenue in 2017. In addition, they have been involved for over a year in a huge and expensive effort to re-engineer and improve the company’s platform in order better service their customers. Product and Development costs were 53% higher in Q1 2018 than in Q1 2017. And they grew the size of their image collection by 47%.

They say they have 1.8 million customers. But the 36,000 Enteprise customers represented about $60.6 million of the revenue in Q1 2018. That would mean the other 1,764,000 customers spend on average about $52.38 a quarter or $209.52 per year. It would seem that not all the 1.8 million customers purchase anything in a given year.

How To Grow Revenue

The first step in growing revenue is to accept that the market is an oligopoly. Accept that there will never again be significant growth in the units licensed per quarter. The only way left to grow revenue is to raise prices. The price increases don’t have to be all that large, but they have to be steady.

Given how low still image prices are a 10% to 20% increase on existing still image prices would have little effect on any of the customer’s bottom lines regardless of the number of images they regularly use. Raising the current prices of video clips may not be a first step.

An obvious concern is that if one of the Big 3 raises prices all their customers will go to the other two. Given how low prices have fallen small price increases alone are not likely to cause a customer to move from one system they understand to another.

Take a cue from the airlines. Delta, American and United are an oligopoly and directly competing against each other. They raise prices all the time. When one raises prices the other simply match them and everyone benefits.

Another Strategy

Create two collections – Premium and Regular.

In the Premium collection include all the images that have been on the site less than six months and all the images that have sold at least once in the last two years. Leave all the rest of the images in the Regular collection. The Regular collection should have at lease 100 million images, maybe more.

When a Premium image has been on the site for 180 days and has never sold it is automatically moved to the regular collection. Once the Premium collection has been established, if an image remains on it for two years without an additional sale it is returned to the regular collection.

Once the system is established images in the Regular collection that have been licensed at least 5 times will be automatically moved to the Premium collection.

Keep the price offerings the same as they are now. Regular collection images will be available at current prices. Premium image prices will be twice the price of a Regular image. Thus, it would be possible to maintain all the current price packages and simply count each download of a Premium images as equivalent to two Regular downloads

Regular Premium Annual
Downloads Downloads Commitment
Per Month Per Month  
10 5 $29
50 25 $99
350 175 $169
750 375 $199
Single Image Anytime Within A Year
2 Regular
1 Premium
5 Regular
2.5 Premium
25 Regular
12.5 Premium

If Shutterstock hopes to keep its investors happy it needs to do something. Current strategies are not working.

Copyright © 2018 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


  • Daphne Fu Posted May 7, 2018

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