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.
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.