What Is Wrong With Shutterstock?

What Is Wrong With Shutterstock?

Shutterstock sent an email to its contributors recently and informed them about their new earning structure. As you might guess, it was shocking and disappointing for the vast majority of contributors.

It has been a long time since microstock became side income rather than the main income for content creators. Even though demand for fresh content — photos, videos, illustration, and even audio — has been increasing since the digital marketing revolution, some microstock companies went bankrupt as some others were acquired by the bigger players that have been growing on a regular basis.

Shutterstock has been one of those big players in the microstock market. Since its founding in 2003, they grew steadily, and they even acquired other companies like BigStock, PremiumBeat, and Flashstock. They also started their own premium brand Offset, where you can buy authentic and exclusive content that is rarely found on any other microstock websites. They also kept pace with technology by implementing AI into their keywording tool, and they kept growing their content library.

However, the grass wasn’t always green on the contributors’ side. Back in the early 2000s, the content creators were (almost) able to make a living on microstock, but this has quickly changed since the market started growing and companies started lowering the royalty payouts while continuously updating their earning structures. To balance their income, some contributors started uploading to multiple microstock websites, while some preferred to opt in for exclusive contributor plans to earn higher royalties. All in all, the number of full-time microstock contributors started decreasing over time.

Before the announcement of the new earning structure, Shutterstock contributors were able to earn more based on their lifetime earnings. To put it all in simple terms, if you were starting as a new contributor, you were supposed to earn $0.25 per image from monthly subscriber plans and $1.88 from any on-demand images. After you passed the $500 limit, your earnings were increased to $0.33 per monthly subscriber image sales and up to $2.48 per any on-demand image sales, until you reached $3,000 in total earnings. After earning $10,000 as a contributor, the maximum amount that could be earned per image from monthly subscriber plans was $0.38, and any on-demand image sale was leaving $2.85 per image to the contributors.

So, What Changed?

On May 26, Shutterstock gave its contributors notice the new earnings structure will be effective by June 1. With the new system, the pay rate will be calculated based on the total sales; so, if you make more sales, you will get paid more. Based on the sale numbers, the contributors will be divided into six levels. A level 1 contributor (who has less than 100 image sales) will earn 15% per image, while a level 6 contributor (who has more than 25,000 image sales) will be able to earn 40% per image, depending on the image pack sold by Shutterstock. Here is the shocking and disappointing part: Shutterstock will reset all contributors to level 1 for both images and videos every year on January 1st.  

Level 1: Up to 100 (15%)

Level 2: 101 to 250 (20%)

Level 3: 251 to 500 (25%)

Level 4: 501 to 2,500 (30%)

Level 5: 2,501 to 25,000 (35%)

Level 6: Over 25,000 (40%)

This new model will remove the flat $0.25 flat-rate commission, replacing it with the percentage system, and the payout for subscription plans will not be less than $0.10. According to Shutterstock, they made this change to create fair opportunities for all contributors and to reflect the changes in the market.

To be honest, for an average contributor, it is impossible to reach level 5 or level 6 in a year, especially considering the slow months and global crises like the pandemic; even reaching level 4 will be impossible for most contributors. Even if they do, all contributors will have to start from scratch on the 1st of January each year.

Rather than rewarding, this new plan seems enervating for the contributors. Each year, for the first few months — most probably for the first half of the year, people will try to reach a decent level, and their total earnings will be less than the average they made for the past years. The cost of creating content is not cheap, especially the ones that require models, props, and traveling. With this new model, there will be roughly a 50-60% drop in income compared to the previous system, and the first quarter of each year will be a disaster for many contributors.

Maybe there is no cure for microstock photography

What Will Happen Next?

According to Shutterstock’s first quarter 2020 financial report, their revenue decreased by 1% to $161.3 million. At the same time, their image collection expanded 27% to approximately 330 million images, and their video collection expanded 29% to approximately 18 million clips. This shows that people are uploading more and more content, and the microstock business is still working for many creators. But the recent changes will certainly affect both contributors and Shutterstock itself. I’m well aware of the uncertainty of the current global situation and its effects on large companies like Shutterstock. But, the core of a microstock business depends on its contributors who provide the product. And, like many other business models, if you lower the quality of your product and pay less to your suppliers, your business might suffer in the future.

Companies want to grow and reduce the risk of losses. So does a working content creator. There may be an increase in the microstock contributions, but creating good content is the key. That’s how people still make money off it. Equalizing all contributors to the bottom level with ridiculous rates is just unfair. Even if the global economy gets better and Shutterstock doubles its revenue, I don’t think they will restructure this earning system on behalf of the contributors.

Shutterstock contributors have already started discussing the new earning structure on the contributors’ forums, and most of them are considering deleting their accounts and migrating to other microstock companies. I hope Shutterstock will eventually listen to its contributors and offer a better solution, but it seems like the company is quite decided on this matter.

Boycotting Shutterstock might shake the company, and their loss can be another company’s gain. But there is no guarantee for better scenarios with other companies, unfortunately. Maybe this is the fate of microstock photography. 

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26 Comments

Probably one thing noone told companies charging $1 per photo: they don’t have to.

JetCity Ninja's picture

Growth of a business used to be the byproduct of offering a product or service to an ever larger consumer base. Success was judged by the ability to meet that demand while maintaining that same level of quality and service while turning a profit. It was previously not the main goal and primary metric for “success.”

Now, “success” is judged purely by growth, no matter how unreasonable the application, as the customer base is relatively finite or, at the very least, moves at a much slower pace. Now, any business that is able to meet demand and maintain consistency is deemed a “failure” due to lack of infinite growth.

And then comes the destruction of their own system: businesses need ever lower compensation for employees, which reduces their own customer base’s buying power. Hurting potential for growth through this self-harm reduces their metered “success” and impacts their share price, resulting in further cuts to employee compensation and reduction in product and service quality... completing a negative feedback loop.

All because the generating of demand, or growth, has become the primary metric for success rather than their ability to meet demand, improve product quality or render service.

That’s just my uneducated observation when Dell failed the first time using this model and other businesses rushed to copy it.

Tom Reichner's picture

I am one who will lose income because of this change. I am currently at Shutterstock's highest level, having over $40,000 of lifetime earnings with the company. But the new structure they have announced will severely cut my earnings just when I need it the most - in January, February, and March of each year.

Shutterstock says that the change in commission payout structure is to make it fair for all photographers - those who are new to Shutterstock and those who have been with them for a long time. I call this utter BULLS_ _ _ ! Anyone with half a brain can see through that lie immediately.

I absolutely GUARANTEE you that with the new structure in place, the total amount of money that Shutterstock pays out in commissions goes down.

Yup. That's right - the real reason for the change is so they can pay contributors less and keep more for themselves. They just tried to hide this real reason by changing the entire structure, instead of lowering the percentage. But the result is exactly the same. More for them, less for us.

The Shutterstock executives who made this decision are self centered and greedy, and should have a red hot iron poker rammed all the way up into their 'hole. They are hurting me and damaging my lifestyle by doing this, and I have no way to strike back and hurt them for the damage they are doing to me. Frustrated.

Marcus Joyce's picture

Considering you have a large collection, what's stopping you from making your own site?

Burak Erzincanli's picture

the cost of marketing your own website might be very high

Tom Reichner's picture

No, the cost of having my own site is actually very low. But the problem is that there is really no realistic way to actually sell enough from one's own site.

Big publishing firms do not want to go to individual photographer's websites to find images for their publications. It is a very inefficient way for them to procure images.

They prefer to work through very large stock agencies, where millions of images are there right at their fingertips, and they don't have to take the time to communicate with the photographer about pricing, licensing terms, etc. All they have to do is click their mouse on whatever choice they want.

This is why individual wildlife photographers can not really have any success selling images directly - because the corporations that we sell to only want to deal with a big agency. And I don't blame them - it is SO MUCH EASIER for image buyers to deal with an agency and not have to deal with individual photographers.

Tom Reichner's picture

I already have my own site. What made you think that I didn't?

I do sell (or try to sell) my wildlife stock photography directly to publishers and advertising agents, but it does not result in many sales.

When I contact potential clients about licensing my images, most of them say, "we prefer to work with microstock agencies. If you want us to consider your images for our publications, we suggest that you upload your images to Shutterstock or other similar agencies, and then we will find your work there." I have gotten that response consistently from numerous companies since 2010.

Anybody who thinks that a wildlife photographer can sell stock images directly and be successful at it must be living in a dream world and have no actual experience doing it. So much bad advice here and ridiculous suggestions about selling wildlife stock imagery - from people who have never actually done it.

Selling through Shutterstock and Adobe Stock has gotten me far more income than I ever made selling on my own. Why don't some people realize that this is how it is in today's stock image market?

Rayann Elzein's picture

Your website has 0 text in it, so don't be surprised that clients don't find you. Having said that, I agree with you that selling wildlife/nature photography from one's own website is not easy, however, it's not impossible either. And also keep in mind that instead of earning 0.25$ per image sold, you can sell each image for a few hundred $ each. And maybe this "not interested, go to Shutterstock" response from client is a typical US one, as I have never heard this from a European client.

Tom Reichner's picture

Publishers do not look for photos by doing Google searches on the internet. Did you really think that? Ha ha! This isn't 2010 or 2012, you know.

As for a few hundred dollars per image, who is paying that much for wildlife photos? Which publishers? And for what publications? When I sell independently, I typically get around $50 per image. I also managed to sell a "package deal" of 100 images for $500, so $5 per image for that client. You seem to have based your thoughts of the industry on what was going on 5 or 10 years ago, not on what is going on today.

If you can give me any info about publishers who are paying several hundred dollars to license wildlife images, and who are willing to work with photographers who they haven't worked with before, I would really appreciate knowing who they are.

I'm getting sick and tired of people commenting here, saying that stock photographers can still do well selling stock on their own. None of the people making those comments have actually done it - they are outsiders looking in, and have no clue how this part of the photography bisuness works, nor of how drastically it has changed over the past few years. Many of their comments seem to be stuck back in 2015. ha! They are clueless, yet they tell us, who are actually in this business, how we can be doing better. Shame on them. Speak about that which you know, not about that which you do not know.

Rayann Elzein's picture

Well obviously I am not going to hand you over my clients list ;-) As I said, maybe things are different in the US.

And yes, I do sell to several people by passively letting them find me on Google through my website/blog/own stock. Some of them by a photo on my stock without even contacting me first, and I just get an email from Stripe that xxx USD was deposited on my account. That's not the majority of sales, but it accounts for a non negligible part of my income.

You can find my website and own stock and you'll see what system I use. If your customers 1) find you, 2) have an easy way to browse through photos and 3) can pay/check out in the same session, which is what my stock offers, I guarantee you that they use it.

PS: not sure if your last paragraph addresses to me. I have tried the microstock game years ago, and it didn't work. Probably because I didn't have enough images to submit nor the time or energy to really get into it. After a few months I withdrew my images and never looked back, realising that I will never make a living by selling photos for 30cts, moreover undermining the value of my own work.

Tom Reichner's picture

You're not going to give me your client list? Why not? I only photograph wildlife, and only wildlife that is native to the United States. I do not photograph anything else.

I have no doubt that you and I will never compete with one another, because I shoot such a narrow range of subject matter.

You have wonderful landscape photos from areas that are very difficult for most people to ever get to. OF COURSE you have success selling stock directly! What works for landscapes of remote regions of the world is not going to necessarily work for photos of wild animals that are accessible to millions of photographers. It is a completely different marketplace.

In stock photography, what works for one genre may not translate AT ALL to other genres, and especially not to one narrow niche within a genre. When someone does well selling their own stock independently, it bothers me when they think that the same thing would and could be done with photos of North American wildlife. The market is entirely and utterly different for different kinds of photos.

By the way, my website does have text, as I like to write captions for my images that include the species and the location in which it was photographed. But as I said, publishers looking for photos of common species of North American wildlife do not have to do Google searches in order to find images for their publications. The stock agencies are literally full to overflowing with such imagery.

Another thing I will add is that I have tried to sell through traditional macrostock agencies. But that has not gone well at all. The images I have submitted there hardly ever sell. Meanwhile, the images I have on Sutterstock and Adobe Stock sell quite prolifically. This is a pity, as I would love to get more of the rights-managed sales, but the images just sit there, for years and years and years, with barely ever a sale at all. In hindsight, I think I should have ignored the macrostock agencies altogether, and put those images on Shutterstock instead. Because at least when they are on Shutterstock, they make me some money.

With Shutterstock, I have made approximately $4 per image per year, over the past 8 years.

With Adobe stock (formerly Fotalia), I have made approximately $6 per image per year, over the past 3 years.

With Alamy, (a macro agency) I have made less than $1 per image per year, over the past 9 years.

Other macro agencies declined me, saying that they already had enough long-established photographers submitting North American wildlife images, and that it would not be fair to those photographers to bring new people into the fold who had identical subject matter. At least that is the reason they each gave me; perhaps they just didn't think my body of work was good enough for their clients' needs. But every year I contact those macro agencies again, in hopes that they will change their mind and accept me.

I have spent a lot of time marketing my images in many different ways. But so far, microstock agencies are the only efforts that have actually resulted in me getting significant money. Everybody tells me to do it all sorts of other ways, but when I have tried to do it in those other ways, it never seems to result in me getting money for my photos.

I've been following the rage of the Shutterstock contributors on various forums, including Shutterstock's own. In a strange way, it mirrors what we're seeing around the country. Sheer, blind rage.

I can't say it's altogether unjustified--Shutterstock's executive team is clearly tone-deaf. Any other company would understand the huge value of a community of thousands of advocates they've built up who have been loyal to the company since 2004. This new management clearly doesn't. In one fell swoop they destroyed 16 years of goodwill. They've turned what had been their strongest advocates into an angry mob of their fiercest detractors.

If they had just bothered to take the time to communicate and be transparent with their contributors upfront about the realities of the marketplace--and even included some of them in the decision making process--they could have averted much of this mess. A lot of them would probably have even helped become their advocates. But they handled this in exactly the wrong way by sending out a single email saying "this is what we've decided, if you don't like it then leave". Unfortunately a lot of good people are going to call their bluff. Worse, instead of signing their names they leave their junior staff to clean up the mess they as the executives should have seen coming hundreds of miles away. If you lead a company, you've got to step up and own these decisions or your employees will never trust you again.

All that said, I have to say that I find the response of the contributor community equally ridiculous. It wasn't so long ago that photographers were selling rights-managed work at hundreds of dollars a photo. Then these people came along and destroyed that model by offering their work royalty-free at $2.38 a pop. And now these same people are complaining that their $2.38 a pop is getting replaced by $0.10.

The reality is, the world has changed. A lot of people who 10 years ago bought from stock companies are getting their photos from free stock photo sites. I think a lot of the anger directed to companies like Shutterstock really need to be directed towards photographers that dump their entire photo libraries to these free sites. Free sites are clearly changing the marketplace, just as the inability to stop people from pirated music led to the rise of sites like Spotify and Pandora that pay pennies to musicians that used to make thousands of dollars.

I think everyone just needs to calm down. If you're good, you'll still do well no matter what system you're under. You just need to market yourself better. Start your own Web site. Put some stuff on the free sites, put some stuff on sites like Shutterstock and Adobe. If those sites allow you to put a link in your profile page, link to your site. Just as musicians are making money from concert tours instead of album sales, make money from custom gigs and use these sites as ways to promote yourself. The gravy train is over, but that doesn't mean you still can't do really well for yourself.

What will happen next? My bet is that many of the old stalwarts will leave and will be replaced by new people who are happy just to make anything on their photos.

Look at all the people who just let the media use their stuff for nothing while the media fires photographers. Most of the photos will likely take a dip in quality but sometimes it just doesn't matter to the consumer if they can get something cheaper.

Burak Erzincanli's picture

I wish all contributors boycotting Shutterstock gather and launch a new platform. With flat rates :)

I see 2 problems. First is there are more people snapping pics and submitting them for a quick buck. This leads to the destruction of photography as a profession. The second is Shutterstock's greediness and how they are taking advantage of the first problem above. For now the quick solution is for the majority of photographers to pull their images and leave Shutterstock in large numbers. Then they will be forced to deal with the real photographers that helped create their empire and treat them with respect. Who is going to start spreading this message to create this landslide and bring them down to their knees? SPREAD THE WORD!

Rayann Elzein's picture

Micro stocks are a big part of what's wrong with the photography business nowadays. Get a picture for a few bucks, without realising the amount of work that is behind said picture. That so many photographers fell into that trap thinking they could indefinitely make a living from this is beyond me. Of course, I feel for those who are going to loose a big part of their revenues. On the other hand though, how could anyone really have been thinking that micro stocks are a viable business model for photographers in the long term?

Frederic Hore's picture

Uploading images to micro-stock companies like Shutterstock, iStock photo, Adobe Stock - the whole lot of them is a fool's game. It's almost like you're saying, hey, I don't care if you sell my photos for peanuts, or give them away for free as part of "collections". I refuse to upload any images to micro-stock, simply because the ROI (Return on Investment) is too stupid and poor, and frankly not worth my time.
If you want to sell your photos, and command the prices you want, then use Etsy.com or PhotoShelter, where you can create private portfolios to market your images, and create passwords to them, then do cold calls to potential clients and invite them to take a look. Does it take more work? Yes. But you will make more $$$ per individual photo, than you would by selling the same image 1000 or 2000 times on micro stock. Yes 2000 times! Do the math - if you are receiving $0.10 per photo, 2000 times that is $200. I would rather receive $200 for a single LICENSED photo, then a laughable $0.10
Frankly, too many amateurs succumbed to pitches by greedy web companies, and chased the dream to sell royalty-free images as a sideline to make some extra bucks. Unless you are prepared to get out there and promote and sell yourself in your local market, and develop your own clientele, and sell rights-managed photos only, then you are just not a serious photographer, and you're opening yourself to abuse.
If you truly have unique, quality images, pitch them to established, rights-managed stock agencies and PR companies, and avoid the micro-stock abusers completely.
Stay safe and be well.
Frederic in Montréal.

This post is being removed from the Shutterstock forum:

“Call to action
Here’s an idea, what if we all started uploading grandmother's feet photos, pet droppings, irrelevant topics ... and we put different/non matching keywords?
A lot of them may not even get accepted or we might get our accounts penalized. But those who do get into the system they will create some confusion in the algorithm and the company will have to spend extra money to be able to avoid that a search for a “ Business Technology “ image will have my grandmother’s feet as a result.
I’d love to remind you how boring and the amount of work it is, to add key words to you work after you created it and get so little pay from it, it feels the same as preparing the food for your boss, taking a spoon and drive it like a little plane so he opens his mouth, clean him up and do his dishes. It is pretty unfortunate.
What do you think ? “

Burak Erzincanli's picture

So Shutterstock started removing the posts?! You guys are all welcome to discuss freely here!

As long as photographers refuse to face the reality of the situation, the abusive and exploitative business practices of stock agencies will continue with no end in sight.

With regard to Shutterstock's 2019 income: "The Company's current expectations for the full year 2019 remain unchanged and are as follows: Revenue of $645 to $670 million . Adjusted EBITDA of $93 million to $107 million . Income from operations of $18 million to $32 million" (source: Google search).

With regard to Shutterstock's payout to the photographers who create the images the company sells: "Shutterstock will initially pay you 25 cents every time one of your images is downloaded, with a tiered set of raises to 33 cents, 36 cents and 38 cents per download as you reach the $500, $3,000 and $10,000 lifetime earning milestones" (source: Google search).

That's what we call an abusive and exploitative compensation structure. As long as photographers continue to volunteer to be financially abused in this manner, Shutterstock will be more than happy to do so.

“But, the core of a microstock business depends on its contributors who provide the product.“ Actually, no. The core of a microstock business depends on its buyers, who couldn’t care less who created the image they’re considering buying. We contributors are way down at the bottom of this food chain, and are completely at the mercy of Shutterstock, who are out to maximise their profits by keeping their customers and employees — who are not expendable — happy. We contributors are both interchangeable and expendable, sadly.

Indeed, from my point of view as a business owner, not in photography, and a amateur photographer the concept of micro stock photography does make sense for the photographer. As an amateur I would never sell any of my photos for the amounts offered i.e. by Shutterstock. I also do not buy from them because I think their business model is abusive. When I need photos for my non-photography business I either take them myself or I hire a local professional to do the job. My needs are mainly product photos so the task is well defined and straight forward.
The reduction in cost and complexity in acquiring and distribute photographs has to a large extent eliminated the possibility of making a living from photography unless you are supplying a local market in i.e. wedding, product photography or other distinct segments. General topics cannot generate a decent income for most photographers.
I have a passion for photography but unless you have local clients have some really outstanding work my conclusion is that it is close to impossible to make a decent income on the images alone.

A hidden gem for me is selling on https://motionarray.com

Yes, it is a membership site, but when my footage is downloaded 100x more than other sites I earn a lot more money. Their staff is also very friendly and helpful.

Anyways, let's hope SS comes to their senses.. and reverses this decision.

Oh, and here's a link if anyone is interested in selling there. https://motionarray.com/become-a-producer/

I think a right response should be a week of contributors account suspension.