After the announcement of the
Shutterstock/Facebook agreement that makes images available FREE of charge to businesses that advertise on Facebook, I contacted Shutterstock for additional clarification.
Based on what has been made available about the Facebook agreement, I presume Facebook will pay
Shutterstock $1.00 from its ad revenue every time a Facebook customer downloads a Shutterstock image for use in an ad. Then Shutterstock will pay the contributor a
royalty of $0.25 to $0.40 depending on the total downloads that have been made of the contributor’s images.? If this is incorrect, please help me understand. This seems a very inexpensive rate for even the smallest company to pay to use an image that will help sell its advertising message.
I also asked it this Facebook rate doesn’t undermine the potential for sales of
Offset images to online advertisers. Offset charges $250 per download for the smallest file size. (Offset is a premium brand Shutterstock is beta testing.)
Response
Scott Braut, Vice President of Content for Shutterstock provided the following explanation.
Our collaboration with Facebook is a perfect example of the way in which Shutterstock is connecting contributors to new growth opportunities. We’re excited about what this relationship means for the expansion of the market.
From the beginning, Shutterstock realized that image licensing needs to be three things to be highly successful: it needs to be easy; it needs to be affordable; and it needs to be available to a global audience with many different kinds of customers, with a variety of different needs. That understanding has led us to deliver more than $150M in royalty payouts to contributors to date.
There are currently 18 million businesses with pages on Facebook and 1 million active advertisers. Many of those businesses are small and local businesses that are testing online advertising for the very first time. Some of those businesses may have used unlicensed images in the past, or have chosen not to advertise with images at all due to the perceived cost or complexity.
With this relationship, it will be easier than ever for small businesses to consume licensed imagery and generate royalties for artists. Facebook is encouraging this audience to use not only one image per ad, but to test up to six images for each ad to find the one that performs the best. Due to the massive potential increase in consumption of licensed imagery among this audience, we expect that our relationship with Facebook will increase the total amount of royalties generated for artists.
In terms of the scope of the license itself, the license provided to Facebook advertisers limits the use of the images to Facebook only, whereas a Shutterstock Standard License provides for use across a broad range of media. Images will be used at digital sizes – often presented as thumbnails – which is more limited than a traditional RF license. And every time an image is selected for an ad, a contributor gets paid a royalty. We believe that our Facebook relationship benefits both small businesses and contributors.
There are distinct differences between what we’re offering to customers through Offset and to advertisers through our Facebook relationship. With Offset, we’re offering image buyers carefully curated, best-in-class images paired with a generous RF license. The customers for Offset include major publishers, global advertising agencies, corporations, and more. These customers are typically turning to Offset to support higher-profile needs and uses.
Ultimately, we don’t believe one can compare our Facebook collaboration with a traditional rights-managed sale on Offset. These are different models with different licenses and different images for a different kind of customer.
While we are obligated not to disclose the specific terms of the Facebook deal, what we can tell you is that we paid careful attention to the interests of contributors throughout the process. This relationship will expand the market and we believe that it will be beneficial to all involved.
I hope this answers your questions.