Shutterstock Had A $42.3 Million Third Quarter

Posted on 11/21/2012 by Jim Pickerell | Printable Version | Comments (1)

Shutterstock has reported revenue of $42.3 million for the third quarter, a 36% increase over Q3 2011. The company expects to generate revenue of $44 to $45 million in the fourth quarter. Based on that projection revenue for 2012 will be between $164 and $168 million, up $44.7 million compared to the 2011 revenue of $120.3 million. This will be a 37% increase in revenue for the year.

For 2013 they project slower revenue growth of about 25% pushing the business to between $204 and $208 million in gross sales for 2013. During the Investor Conference Call, in answer to a question about the growth rate of on-demand versus subscription, Timothy Bixby, CFO, said that in the quarter subscription sales grew a little slower than overall growth and on-demand a little faster, but they see steady growth for both over time.

Shutterstock sells in more than 150 countries in 10 different languages. Their 35,000 contributors come from more than 100 countries. They ended the quarter with over 21 million images and 700,000 video clips in their collection. The company had 18.7 million downloads in Q3 2012, up 26% from 14.8 million in Q3 2011. Total downloads since the founding of the company have surpassed 215 million.

They currently sell to 550,000 customers. If you look at Fortune 500 companies, over 70% of them already have at least one Shutterstock user. But the amount that these companies are spending with Shutterstock is a small fraction of their overall image spend according to Jonathan Oringer, Founder, CEO and Chairman of the Board. “Given that we represent a very small portion of the overall market, our primary focus is on customer acquisition,” he continued.

Expense Breakdown

Cost of Revenue $16,208
Sales and Marketing $9,633
Product Development $3,992
General and Administrative $3,536
Net Operating Expenses $33,369

The cost of revenue was 38% of total revenue and is driven primarily by contributor royalty payments. However, in October Oringer said that the company pays out about 30% of revenue to image creators. Thus, costs other than royalties may be included in the $16.2 million figure.

The bulk of Shutterstock’s marketing and sales spend is focused on online marketing. The $9.6 million in Q3 2012 was up only 13% versus Q3 2011. For the full year of 2011 Sales and Marketing costs were almost $32 million, or 26.6% of revenue.

Thilo Semmelbauer, President and COO said, “We use search engine marketing, display advertising, re-targeting networks and lots of other channels. We are always looking at our less efficient channels and trying to optimize by moving some of that spend into more efficient channels.”


The company ended the quarter with 234 employees an increase of about 35% from 173 at the beginning of 2012 and up 47% from 159 a year ago. About 40% of the additions in the quarter (roughly 24 people) were within the product and technology group. About 30% of the new people are in Sales and Marketing and the remaining 30% work in the Growth and Acquisitions area.


Adjusted EBITDA grew to $10.3 million in Q3 2012, a 49% increase when compared to $6.9 million in the third quarter of 2011. Net Income was $8.7 million compared to $5.7 million in the third quarter of 2011. For the full year EBITDA is expected to be between $32.5 and $33 million, about 20% of gross revenue.

Revenue Per Image In The Collection

One interesting trend that may be worth watching is the Revenue-Per-Image in the collection. As more and more images are added there may be a saturation point in the number of images customers feel they need to download. (I won’t say use because we know that with the subscription model customers download many images than they ever use.)

The following chart tracks the growth in downloads, revenue per download and total images in the collection from Q3 2010 through Q3 2012. By multiplying the revenue-per-download by the number of downloads we get the total revenue in millions of dollars. Then, by dividing the total revenue by the number of images in the collection at the end of each period we get the average Revenue-Per-Image-In-The-Collection (RPIITC).

  9/30/10 12/31/10 3/31/11 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12 9/30/12
Downloads (millions) 11.1 12.5 13.3 14.4 14.8 16.2 17.6 18.3 18.7
Revenue per Download $1.89 $1.91 $1.92 $2.01 $2.10 $2.14 $2.13 $2.22 $2.26
Images (millions) 12.3 13.3 14.4 15.3 16.2 17.4 18.8 20.2 21.7
Total Revenue (millions)
$20.98 $23.88 $25.54 $28.94 $31.08 $34.67 $37.49 $40.63 $42.26
Rev/ Image Collection $1.71 $1.80 $1.77 $1.89 $1.92 $1.99 $1.99 $2.01 $1.95

Note that everything has steadily trended up except the RPIITC. In the last quarter it dropped to almost what it was a year ago. This could all change if Shutterstock can find a lot of new customers, but they are already growing at a much more rapid pace than any other company in the industry.

The problem is certainly not that they are accepting too many unmarketable images. They reject almost half of the images submitted. The simple fact is that more and more contributors are producing more and more good images than there are customers who want to purchase them.

Of course, this number is only an average. Contributors who produce work that is downloaded a great deal more than the average will continue to do well. But, as long as we’re talking about averages it should be noted that the average image in the collection is downloaded 3 to 4 times in a year. Thus, the average contributor with 1,000 images in the collection would probably have fewer than 4,000 downloads in a year.

And the $1.95 is not what a photographer earns, but the gross revenue per download. Contributors get at most 38% of that, and probably about 30%. Thus, per image in the collection, the average contributor can expect to earn between $2.35 and $3.00 per year. Contributors who write most of the blog posts are doing much better than this. The ones we never hear from are doing much worse than the average.

Finally, photographers should keep in mind that vector illustrations are in much greater demand than photos. In 2011 vectors represented 32% of total downloads on Shutterstock. There is no reason to believe that there has been a dramatic change in the proportional share as usage has grown.

Producers, keep your costs low.

Copyright © 2012 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:  


  • Keiji Yamaya Posted Nov 27, 2012

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