Shutterstock is not making enough money so they have decided to lower the royalties paid for Enhanced Licenses.
Paul Brennan, VP, Content Operations sent the following message to contributors:
At Shutterstock, one of our most important goals is to drive our contributor’s success by continuously delivering new earnings opportunities to you, our partners. Our enhanced license provides a great opportunity to license your content at a higher price point. Over the past year, we have been testing ways to better communicate the value of this premium license to our customers.
We have determined that a fixed rate payment for enhanced licences limits our ability to continually drive more downloads. Therefore, effective January 25th 2016 the enhanced license payout will move from a fixed rate of $28 to a tiered percentage model, similar to our custom image license. To help simplify the earnings schedule, your enhanced license payout will now be determined by your earnings tier.
We are your partners and our job is to work tirelessly to serve you and grow our marketplace together.
What’s It Mean?
Customers can purchase three different Enhanced Licenses packages: 2 images for $199; 5 images for $449 or 25 images for $1,699. Depending on which package the customer chooses the actual cost per-image for an Enhanced License is $99.50, $89.80 or $67.96.
In the past when contributors were receiving a flat $28 for each EL they could get up to 41.2% of what the customer paid when the customer purchased a 25-image package of ELs. Now, depending on the contributor’s percentage in the “tiered percentage model” they could receive between $20.38 and $13.59 for a single EL use. That could be as much as a 49% decline in royalty for such a use.
See Chart Below:
| Enhanced |
Average |
|
Current |
Tiered |
Tiered |
Tiered |
Tiered |
| License Packs |
Price Per |
|
Enhanced |
Percent |
Percent |
Percent |
Percent |
| |
Image |
|
License |
30% |
28% |
25% |
20% |
| 2 imagesfor $199 |
$99.50 |
|
$28 |
$29.85 |
$27.86 |
$24.88 |
$19.90 |
| 5 imagesfor $449 |
$89.80 |
|
$28 |
$26.94 |
$25.14 |
$22.45 |
$17.98 |
| 25 imagesfor $1,699 |
$67.96 |
|
$28 |
$20.38 |
$19.02 |
$16.99 |
$13.59 |
Some believe the likely next step will be to cut the prices of ELs which potentially might increase volume. They have already added rights to the basic license (500K print run versus 250K) and removed the cap on e-mail and e-book uses. These moves reduced the need for customers to purchase ELs (or certainly seemed to). Shutterstock hasn’t acknowledged that this has actually happened.
Contributors suspect that Shutterstock may start doing custom deals for even lower prices. That would further lower royalties. Nevertheless, there are a few contributors that still hope “volume will make up the difference.”
The most discouraging aspect of the announcement for some contributors was the “corporate speak” that tries to a make bad news sound like they are doing contributors a favor. One contributor called the message “A breathtaking piece of corporate gobbledy-gook.”
More specifics about the new payouts should be available here
http://submit.shutterstock.com/payouts after Monday.