Growing Revenue At Shutterstock

Posted on 2/27/2018 by Jim Pickerell | Printable Version | Comments (0)

A Shutterstock investor asked me recently, “What can Shutterstock do to grow revenue?”

He went on, “worldwide, the number of customers willing to actually pay for the images they use seems to be flat, not growing. Shutterstock cut prices In 2017. Downloads were up less than 2% compared to 2016. Meanwhile, they added enough new images to grow their collection by 46% in 2017 compared to 2016. Art directors say the size of the collection is making it harder, not easier, for them to search and find what they need. AI doesn’t seem to be solving the search problem.

“Acquisitions don’t seem to be the answer. They recently sold WebDAM after acquiring it in 2014. At that time Oringer said, ‘By acquiring WebDAM, we can offer a more seamless experience to customers as they license, download, store and share digital assets.’ They acquired Rex in early 2015 with the hope of taking on Getty in the editorial space. Rex contributors say sales are down significantly (possibly because Shutterstock is now getting images from a wider range of contributors), but they don’t seem to be having any impact on Getty’s dominance when it comes to major editorial image users. What’s left?”


 

My Answer


They need to find a way to charge more for the relatively small percentage of images in their collection that are in greatest demand. Here’s how it might work.     

Segment the entire collection into several smaller separately searchable collections.


    1 – Images uploaded in last 30 days that have not been licensed.
    2 – Images uploaded between 30 and 90 days that have not been licensed
    3 – Images in the collection more than 90 days that have never been licensed.
    4 – Images licensed at least once, but less than 4 times.
    5 – Images licensed at least 4 times, but less than 7 times.


    6 – Images licensed at least 7 times, but less than 10 times.
    7 – Images licensed more than 10 times.
Allow customers to search each collection individually or in any combination they choose such as 1,2 and 3 or 6 and 7.

Pricing


They can continue to use their subscription pricing strategy, but instead of a subscription that allows the download of 50 images per month for $99, give the customer 50 “credits” for $99 per month.

Any image in category 1,2, or 3 could be purchased with one credit. Thus, if the customer selects all the images they need from the unused image categories they would be able download 50 images in a month at current prices.

But, if they choose an image from category 4 – an image that other customers have downloaded – it would take 2 credits to download that image. An image from category 5 would require 3 credits; category 6 would require 4 credits and category 7 would require 5 credits.

The operating principle is the greater the demand for a particular image the more it costs.

Presumably, as they get to higher categories there would be fewer images in each category. That would make it easier for customers who can afford the slightly higher cost per image to find what they need more quickly. Customers with small budgets would still be able to get all the images they need at prices they could afford so long as they use images from categories 1, 2 and 3. In many cases the “unused image” categories will have very similar images to those in the higher priced “used” categories, although the unused images may not quite as perfect as the ones other users have chosen.

Such a strategy should begin to raise revenue. The ability to search smaller image collections based on image popularity will make it much easier for customers to quickly find the right image for their purposes.

Part of Shutterstock’s concern will be that if they start charging higher prices for certain images their customers may discover that often they will be able to find the exact same image for less money on another site. However, such searches are likely to greatly increase the time required for the customer to find the right image and the price variation is not likely to be significant enough to make it worth the trouble for professional users.

Shutterstock may argue that they already have their higher priced Offset collection. While that collection does represent a small portion of their gross revenue it is too high priced for most customers and too limited in its image selection. There is a vast middle ground that they are failing to address.

Nevertheless, it seems very unlikely that Shutterstock will adopt such a strategy because it goes against Jon Oringer’s cardinal principle that “all images are of equal value” regardless of the difficulty in producing the image, the cost of production, the reputation of the creator, or the popularity of the image.


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 www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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