Storyblocks Will Generate $30 Million In 2017

Posted on 10/12/2017 by Jim Pickerell | Printable Version | Comments (0)

Storyblocks, formerly Videoblocks will generate about $30 million from licensing stock imagery in 2017. Currently, they have a little over 200,000 subscription customers who pay $149 a year for unlimited access to about 115,000 video clips. They also offer about 200,000 photos, 200,000 vectors and other illustrations and 100,000 pieces of music for a separate subscription price.

Since Joel Holland founded the company in 2009 they have had over 100,000,000 downloads. Thus, on average each piece of content has been used about 163 times.

When Holland started the business he focused entirely on selling video clips and produced many of the clips himself. Later he began acquiring clips from other creators and paying them a flat, upfront fee, for the non-exclusive, unlimited right, forever, to license use of the clips through his subscription service. The creators could continue to use or license the same clips in any other way they chose.



Later he acquired vectors, illustrations and photos in the same manner and licensed them through GraphicStock.com. GraphicStock has now been rolled into Storyblocks as a separate service at a slightly different price point.

While in the last few years Storyblocks has added very little in the way of new content to its subscription collections, TJ Leonard, CEO of Storyblocks, says they plan to greatly expand the subscription based collections in 2018.



Nearly all the costs of production and the purchasing of rights to license the clips, photos, illustration and music that reside in the current subscription collections were written off years ago so there is little or no 2017 costs to the goods the company is currently selling. Thus, Holland was able to tell the Washington Post recently that his “gross profit margin” -- gross sales minus cost of goods sold -- was “80 plus percent.”

Of course, this does not take into account the operating costs of the company. Currently, Storyblocks has about 100 employees with an average salary (and benefits) of around $100,000 per employee. On top of that there are expenses for office space (they’ve just moved to new offices), computer operations, marketing and advertising/promotion.

Marketplace




In addition, a little over two years ago they started their video Marketplace division where they offer additional clips on a pay-per-used basis of $49 per clip.

To date they have generated about $8 million from providing this service. However, they do not include these sales as part in their gross revenue because 100% of the revenue generated (minus credit card payment costs) are paid out to the content creators. This would mean that in a little over two years they have licensed about 170,000 clips from the Marketplace that currently contains about 5 million clips.

In the first 9 months of 2017 sales of clips through the Marketplace are up about 50% compared to the same period in 2016. While they have been adding to this 5 million clip collection on a regular basis over the last two years, they have licensed rights to no more than 3% of the clips available. Since some clips have been licensed multiple times the percentage of unique clips licensed is much lower.

With the launch of Storyblocks in September the company has also started making a collection of 5 million still images available for individual purchase using its Marketplace strategy. They announced this move in April and have been building the collection ever since. They also have another 5 million photos in the pipeline that should be integrated into the collection in the next few months. Customers must also be subscribers in order to have the right to license these photos but they must pay $3.99 for each one they want to use. 100% of that fee (minus credit card payment costs) is paid directly to the image creator.

While the revenue generated by the clips in the video Marketplace is impressive, it is somewhat surprising that any of these clips sell at all given the way the search is organized. The default search is to show only clips that are available at no additional cost to subscribers. It is possible to click a button that will also show clips from the Marketplace, but in the searches I’ve done the first clips to come up are always the free clips. It is hard to ever find a Marketplace clip. It is impossible for a customer to search for just Marketplace clips even if they have done the same searches many times before and have already seen everything that is free.

The same is true for images and illustrations. The customer is forced to look at the free images first.

When we consider what their competitors are charging the $3.99 price is a real bargain for the customer, and yet if the creator is getting a 20% royalty from the other guy the amount the creator receives is the same as if the other guy licensed the image for $19.15. How many sales does the other guy make for prices below this figure? If the creators is getting 30% then 100% of $3.99 is equal to 30% of $12.77.

But all those advantages may not be of much good if they make it very difficult for customers to see the Marketplace images.


Copyright © 2017 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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