Shutterstock’s Average Price Increases: What Do They Mean?

Posted on 2/23/2018 by Jim Pickerell | Printable Version | Comments (0)

The numbers Shutterstock put out yesterday got me thinking. Is it really possible for the average price per download to steadily rise in a year when they have introduced new 10 and 50 image packs at lower costs to the customers?  Do the download figures really mean the customers are using more of every category of imagery?

Granted the per image prices customers pay for these packs is higher but, many of the customers who were previously purchasing 350 image packs may have only been downloading 50 images a month. The rest of what they were allowed in effect raised the price of each images they actually used. Now, they can get everything they need at a much lower cost.

The customers who were buying 10 images or less a month were probably buying them one at a time previously at prices between $14.50 and $9.16 per image. Thus, $2.90 each, or something slightly higher (if they use fewer than 10) is lot less for these customer.



In the past I have calculated that on average customers only downloads about one quarter of the images they are allowed. Thus, effectively the actual cost per image for the customer varies month to month for each customer. For Shutterstock the number of images likely to be downloaded per month and the overall revenue generated is more predictable.

Revenue Per Download


I decided to multiply the average price-per-image by the total number of downloads and got some interesting figures.



  Q1 2017 Q2 2017 Q3 2017 Q4 2017 Total Other
           
Downloads 43,500,000 42,700,000 41,900,000 43,900,000  
Rev. per DL $2.96 $3.05 $3.23 $3.33  
           
Total Rev per DL $128,760,000 $130,235,000 $135,337,000 $146,187,000  
           
Gross Rev Quarter 130,200,000 $134,000,000 $141,100,000 $151,800,000  
           
Other $1,440,000 $3,765,000 $5,763,000 $5,613,000 $16,581,000
           
Webdam revenue Approximately $16.200,000      

It turns out that the download figures don’t just account for single image and illustration downloads, but for everything including footage, music, Offset and editorial. In these other  there are wide variations in price per download compared to still images and illustrations.

The only thing that doesn’t seem to be accounted for in the download figure is Webdam which they said generated approximately $16.2 million in revenue in 2017. The difference between that figure and the total for “Other” in my chart is probably due to a rounding error of the true number of downloads.



The current per-image prices for Packs that allow customers to download a certain number of images per-month on an annual contract are:
      10 images     $2.90
      50 images     $1.98
      350 images    $0.48
      750 images    $0.26
But, consider the prices charged for a single download of other products.

Footage    
  Single Clip 10 clip pack
  Web $49 $39.90
  SD $65 $54.90
  HD $79 $66.90
  4K $199 $169.90
Music    
  Standard License $49
  Enhanced License $419
Offset    
  Large file between $424.90 and $499
  Small file between $211.90 and $249
    Editorial
    There is no easy way to determine the pricing for an editorial download. I suspect the deals are negotiated separately with each customer, although in some cases they may charge the same as a single image download.
A single large Offset file can generate 252 times as much revenue as an image downloaded from a 50 image pack. A single HD footage clip can generate almost 40 times as much much revenue as an image downloaded from a 50 image pack. A few additional footage licenses could make up for a big fall off in single image and illustrations uses.

It also needs to be considered that Enterprise customers are paying additional fees for Extended Licenses and extra indemnity coverage. All that is included in the bottom line gross sales figure. Thus, the average revenue per image can be growing when the number of units licensed is barely increasing.

This may have something to do with the fact that the amount paid out to creators has dropped to 26% from what used to be 30%. The amount paid to creators is based on fixed prices per image downloaded, not other factors relative to gross revenue generated.
 

So What Really Is Being Downloaded?


What we don’t have from the numbers provided is a clear understanding of the actual growth (or decline) in the number of single images or illustrations downloaded relative the number of footage clips or other products.

I suspect sales of Offset and Editorial images are relatively flat. It seems likely, based on the general state of the industry, that the downloads of Footage Clips and maybe Music may be rising quarter to quarter. It wouldn’t take much of an increase in the number of units licensed in these categories to offset a pretty dramatic decline in the number of Single Images and Illustrations being downloaded. The apparent slight growth in total downloads and the average price per download may be misleading.

It would be helpful it Shutterstock would provide a little more “color” relative to the trends for the various segments of its business. If there are declines in certain areas, the question is why?


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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