Shutterstock is ripping off all contributors

[Dimitris Stasinos]

Shutterstock is about to make an unexpected change on June 1st regarding the company’s paying scheme and cut every contributors share almost in half. The company used to pay 30% per license to it’s contributors (which was also a bad deal but at least an acceptable one) and now introduces a new payment structure, where that percentage will vary from 15% to 40% according to the amount of annual licenses that are sold from every individual artist’s portfolio.

Of course you have to sell 25.000 licenses (this is impossible) in one year to reach that 40% and even if you do, every January 1st your level automatically resets to Level 1, so back to 15% until you reach that number again in the end of the year (spoiler: you won’t).

This practically means that the vast majority of contributors will experience a 50% reduction to their income from SS.

I am a SS contributor for 5 years now and only a tiny fraction of my income comes from stock footage but i know many people who have invested on this and they are making a living from selling clips and photos on micro stock sites.

I guess this is a legal move on paper and it’s definitely covered by one of those filthy pdf agreements. But given this hard period we are all crossing, those unethical moves made by greedy CEOs in order to transfer the loss on the back of content creators have at least to be judged and condemned by our creative community.

[Mokara]

If you don't want to do business with them then take your business elsewhere.

[JurijTurnsek]

7 hours ago, Mokara said:

If you don't want to do business with them then take your business elsewhere.

Moving a vast catalogue is a time-consuming task, that takes away your time to create new content. And what if the next service does the same shit? Losing time again.

[Dimitris Stasinos]

An average portfolio of a full time stock footage provider consists of 5.000 to 10.000 clips on average. As @JurijTurnsek said, uploading all these clips and moving metadata on another agency will take months. And even then it will take longer than a year for these clips to start selling again.

Adobe Stock and Pond5 are more contributor friendly regarding their paying schemes but Shutterstock is leading this market for the last 10 years through aggressive marketing.

As i said i am not directly affected by this as i have a tiny collection but i always considered this market as a great side job for content creators especially now that the market has taken a big hit and almost every summer shooting session is cancelled.

This is one of those changes that are taking place in total silence (i guess major news portals won’t even report this as Shutterstock sponsors all of them) even though millions of people are affected. They even delete commends on Twitter and Facebook as content creators are furious and their only chance to be heard is through social media.

[User]

Thank you for bring this to our attention Dimitris.
 

[JurijTurnsek]

The timing of this change is pretty weird as well - you'd think that stock footage/images use would rise during the lock-down.

[Mokara]

23 hours ago, Dimitris Stasinos said:

An average portfolio of a full time stock footage provider consists of 5.000 to 10.000 clips on average. As @JurijTurnsek said, uploading all these clips and moving metadata on another agency will take months. And even then it will take longer than a year for these clips to start selling again.

Adobe Stock and Pond5 are more contributor friendly regarding their paying schemes but Shutterstock is leading this market for the last 10 years through aggressive marketing.

As i said i am not directly affected by this as i have a tiny collection but i always considered this market as a great side job for content creators especially now that the market has taken a big hit and almost every summer shooting session is cancelled.

This is one of those changes that are taking place in total silence (i guess major news portals won’t even report this as Shutterstock sponsors all of them) even though millions of people are affected. They even delete commends on Twitter and Facebook as content creators are furious and their only chance to be heard is through social media.

You don't mirror the collection on your own computers? Why would it take months?

Bottom line is that it is their service and they make the rules. They are probably facing increasing competition from an expanding array of similar sites resulting in drop of demand (in addition to the drop in demand due to the adverse economy), in the mean time their expenses remain the same. They are not a charity and are not going to run at a loss, so hence the decrease in the royalty.

[Dimitris Stasinos]

10 hours ago, Mokara said:

You don't mirror the collection on your own computers? Why would it take months?

Bottom line is that it is their service and they make the rules. They are probably facing increasing competition from an expanding array of similar sites resulting in drop of demand (in addition to the drop in demand due to the adverse economy), in the mean time their expenses remain the same. They are not a charity and are not going to run at a loss, so hence the decrease in the royalty.

I doesn’t work this way. We are talking about 5.000 gigabytes of footage that have to be uploaded and pass the curation process. And you are wondering why this would take months?

I can see your point of view. But these are the same words that they are using to justify their actions. The truth is that the stock footage industry saw a significant growth during the pandemic and while other stock footage agencies like Dreamstime decided to help the community by increasing their royalties with 10%, Shutterstock saw a chance to make more money and attract new investors.

Of course this is their service and they make their own rules. This is true for all companies after all. But If we where all so cynical to accept this as a justification for any injustice against working people then i guess we would have more serious issues to deal with.

[fuzzynormal]

11 hours ago, JurijTurnsek said:

The timing of this change is pretty weird as well - you'd think that stock footage/images use would rise during the lock-down.

I believe you've answered your own question there. 

[Mokara]

3 hours ago, Dimitris Stasinos said:

I doesn’t work this way. We are talking about 5.000 gigabytes of footage that have to be uploaded and pass the curation process. And you are wondering why this would take months?

I can see your point of view. But these are the same words that they are using to justify their actions. The truth is that the stock footage industry saw a significant growth during the pandemic and while other stock footage agencies like Dreamstime decided to help the community by increasing their royalties with 10%, Shutterstock saw a chance to make more money and attract new investors.

Of course this is their service and they make their own rules. This is true for all companies after all. But If we where all so cynical to accept this as a justification for any injustice against working people then i guess we would have more serious issues to deal with.

What evidence is there that the stock footage industry saw significant growth? There may be more companies around doing it and more photographers contributing images (= more overhead, especially for contributors whose products don't sell), they may even be selling more images but that does not mean that their net revenue has expanded.

In fact, according to their Q1 financials, their net income was down 43%. Their databank increased by about 27%, suggesting that a lot more people are contributing, but at the same time paying downloads decreased by 1%. That is what is causing the financial crunch for them.

[Mokara]

3 hours ago, fuzzynormal said:

I believe you've answered your own question there. 

I would not be so sure about that. There is a massive economic downturn, demand for most things other than essentials are way down.

[Dimitris Stasinos]

12 hours ago, Mokara said:

What evidence is there that the stock footage industry saw significant growth? There may be more companies around doing it and more photographers contributing images (= more overhead, especially for contributors whose products don't sell), they may even be selling more images but that does not mean that their net revenue has expanded.

In fact, according to their Q1 financials, their net income was down 43%. Their databank increased by about 27%, suggesting that a lot more people are contributing, but at the same time paying downloads decreased by 1%. That is what is causing the financial crunch for them.

Net income may be a key to judge the company’s growth but only short term. The fact that their revenue decreased only 1% (compared to the first quarter of 2019) to 161.3 millions, clearly shows the dynamic of this market as we are talking about a period where numerous healthy companies collapsed on almost all fields.

So when you read the income statement of any company, it’s quite wrong to pay attention only to net income. I can bring that almost 70% down in my own company by investing in a marketing campaign and yet sustain my revenue while securing a gradual increase for my future sales in Q2 and Q3. And probably this is going to happen with SS.

[Mokara]

17 hours ago, Dimitris Stasinos said:

Net income may be a key to judge the company’s growth but only short term. The fact that their revenue decreased only 1% (compared to the first quarter of 2019) to 161.3 millions, clearly shows the dynamic of this market as we are talking about a period where numerous healthy companies collapsed on almost all fields.

So when you read the income statement of any company, it’s quite wrong to pay attention only to net income. I can bring that almost 70% down in my own company by investing in a marketing campaign and yet sustain my revenue while securing a gradual increase for my future sales in Q2 and Q3. And probably this is going to happen with SS.

Their overall margins must be quite small if net income dropped by 43% on a total revenue drop of 1%. After expenses their portion of what is left is a small sliver compared to what the contributors receive, so even a small drop in revenue will hit their bottom line hard. Revenue may drop, but expenses don't, and likely increased due to the huge increase in the amount of material being contributed. So, what they are doing is giving preferential treatment to those contributors whose images move, while making contributors whose images don't move as well and who on balance probably cost the company money take a smaller piece of the pie, so they still make a profit on those transactions as well. 

Basically giving competitive photographers their proper due, but reducing the amount that less competitive photographers get. They will want to keep those contributors whose images sell, while encouraging those whose images don't sell to move on.

Keep in mind that the Q1 financials cover a period before all the covid-19 economic impacts took place, so these are systemic trends associated with the industry in general. Q2 is probably going to be much worse, but that is a short term impact. The Q1 trend is long term.

[Dimitris Stasinos]

On 5/31/2020 at 6:55 AM, Mokara said:

Basically giving competitive photographers their proper due, but reducing the amount that less competitive photographers get. They will want to keep those contributors whose images sell, while encouraging those whose images don't sell to move on.

Actually no contributor will get rewarded by this system, even the competitive ones. It is just a clever way for the company to rip off people who have focused their efforts on stock footage while giving them false perspective.

All contributors reset to level 1 every January first, so even if your sales are over 25000 (this is impossible for a single individual and only companies are reaching numbers like this) your pay rate will get from 40% back to 15% when the next year begins. This means that you will need 25000 more sales to reach level 6 again from scratch. And these have to take place before June as you won’t see any real benefits if you reach those in December.

The vast majority of SS contributors will never reach level 4 in order to see that 30% again on their consoles. This plan also encourages quantity over quality as you have to maintain a huge library to reach even level 4 before March. So their collection will get full of garbage sooner or later plus no one will decide to enter the market after this.

These are not signs of a company that is trying to survive long term through a crisis. They just decided that this is the right time to redeem their success while ripping off the artists.

[Mark Romero 2]

7 hours ago, Dimitris Stasinos said:

These are not signs of a company that is trying to survive long term through a crisis. They just decided that this is the right time to redeem their success while ripping off the artists.

It is unlikely that simply rallying against them is going to change anything. Companies are in it to make as much money as they can.

Certainly, if ENOUGH stock shooters start to pull their content from Shutterstock, then it MIGHT make them re-consider, but I don't know how likely that is. As you said, moving a lot of stock footage is quite an endeavor.

So the question is, what are YOU going to do about it?

Is it possible you can start moving your best selling footage to other platforms first, and then migrate the rest of the footage over as time allows?

[Dimitris Stasinos]

43 minutes ago, Mark Romero 2 said:

It is unlikely that simply rallying against them is going to change anything. Companies are in it to make as much money as they can.

Certainly, if ENOUGH stock shooters start to pull their content from Shutterstock, then it MIGHT make them re-consider, but I don't know how likely that is. As you said, moving a lot of stock footage is quite an endeavor.

So the question is, what are YOU going to do about it?

Is it possible you can start moving your best selling footage to other platforms first, and then migrate the rest of the footage over as time allows?

Actually i saw a lot of unexpected movements on a FB contributor page with over 18.000 members. Many of them have already disabled their portfolios on Shutterstock and are gathering online signs against Shutterstock’s decision.

Of course i am not that naive to believe that actions like these will make any difference but these are healthy reactions of people who are loosing a big chunk of their income. I didn’t created this thread to start a rally against SS here (although i strongly disagree with their decision) but just to let you know that almost 500.000 active contributors took a big hit today.

I am personally building my portfolio on 3 agencies: SS, Pond5 and Adobe Stock, so I will stop uploading new stuff to SS from today but as i said, stock footage is more of a hobby for me.

Anyway, this is not about SS only. There are some dangerous corporate consolidation trends crawling around these days and after the pandemic. Of course these are justified to a certain degree but it’s always painful to see the most fragile social groups (and especially artists) absorbing all the shocks of an industry which they obviously can’t control on their own.

[Mark Romero 2]

15 minutes ago, Dimitris Stasinos said:

Actually i saw a lot of unexpected movements on a FB contributor page with over 18.000 members. Many of them have already disabled their portfolios on Shutterstock and are gathering online signs against Shutterstock’s decision.

Of course i am not that naive to believe that actions like these will make any difference but these are healthy reactions of people who are loosing a big chunk of their income. I didn’t created this thread to start a rally against SS here (although i strongly disagree with their decision) but just to let you know that almost 500.000 active contributors took a big hit today.

I am personally building my portfolio on 3 agencies: SS, Pond5 and Adobe Stock, so I will stop uploading new stuff to SS from today but as i said, stock footage is more of a hobby for me.

Anyway, this is not about SS only. There are some dangerous corporate consolidation trends crawling around these days and after the pandemic. Of course these are justified to a certain degree but it’s always painful to see the most fragile social groups (and especially artists) absorbing all the shocks of an industry which they obviously can’t control on their own.

Please keep us updated on developments. Would love to know how diversifying goes, and the whole stock footage landscape evolves in general. And best wishes to you and others who are affected by the changes.

[Mokara]

10 hours ago, Dimitris Stasinos said:

Actually no contributor will get rewarded by this system, even the competitive ones. It is just a clever way for the company to rip off people who have focused their efforts on stock footage while giving them false perspective.

All contributors reset to level 1 every January first, so even if your sales are over 25000 (this is impossible for a single individual and only companies are reaching numbers like this) your pay rate will get from 40% back to 15% when the next year begins. This means that you will need 25000 more sales to reach level 6 again from scratch. And these have to take place before June as you won’t see any real benefits if you reach those in December.

The vast majority of SS contributors will never reach level 4 in order to see that 30% again on their consoles. This plan also encourages quantity over quality as you have to maintain a huge library to reach even level 4 before March. So their collection will get full of garbage sooner or later plus no one will decide to enter the market after this.

These are not signs of a company that is trying to survive long term through a crisis. They just decided that this is the right time to redeem their success while ripping off the artists.

They are doing it because they are not making any money supporting the small guys. There are other outlets for that group. The long term trends are pretty clear from their pre-covid quarterly numbers, they are adjusting their business model to cope with that reality. Like I said, they are not a charity, their priority is their own financial health, not yours. It is a business.

Pulling your content from SS will not do anything because that is where most of the people buying content go. You are just removing yourself from your customer base by doing it. Or do you think that customers are going to pull their business from SS because they want to show solidarity with small contributors? 

If you have an issue reaching the threshold, then set up a co-op with other contributors, form it as a company and contribute as a group. Then you will have a better chance of reaching the threshold for the higher payout. SS want to deal with large contributors at a corporate level who consistently provide quality product, not individuals. They have plenty of content being contributed, the last quarterly report makes that clear, the small contributors are likely too much of a pita to deal with and it will cost them nothing if those guys go away.

[Dimitris Stasinos]

Since yesterday photographers are receiving 0.10$ for every single download.

Here is some press coverage:

https://fstoppers.com/originals/what-wrong-shutterstock-489338

https://petapixel.com/2020/05/27/shutterstock-unveiled-a-new-royalty-structure-and-photographers-are-furious/?fbclid=IwAR1hNMmYyJQtCMR4uVpZWMlGrlE8klO3fVnT1sUBb4BLLCjUPRrAvwqM98E

https://***URL removed***/news/7607355790/shutterstock-announces-new-earnings-structure-contributors-are-anything-but-happy

Update: It seems that they are trying to keep their top performers on board by offering them the previous paying structure until December. Many of them have already deactivated their accounts.

[Dorus]

Almost the same thing happened with iStock (which was bought by Getty images) some years ago. They used to be my number ones site for making money selling stock footage. Now they pay me a fraction of what they did before. Contributors are powerless in my opinion, you have no way of influencing these sites. You also just have to trust them with their sales reports. From time to time I upload footage to all the sites that pay me, but while the number of shots I uploaded goes up, I only see my income decline year after year.