Shutterstock used to be the best microstock agency. Find out what has changed and what to expect in the future.
If you are reading this article I imagine that you are somehow interested in the world of microstock or in general in the sale of photos and videos on the internet. You’ve probably also heard about the recent earthquake that hit photographers like me who upload their content to Shutterstock.
If, on the other hand, for some strange reason you are not aware of it, in this article I explain what just happened on Shutterstock
What just happened on Shutterstock?
Long story short, Shutterstock has long been the best Microstock agency and I have personally brought about 5000 contributors to them through my blog. I say this not to brag, but to make you understand how sad/enraged I am about what’s happening.
On May 27th I opened Gmail and got this message:
After reading just the first sentence, I knew it was bad news, but I had no idea how bad it would be and how much it would affect the lives of thousands of people who earn their money mainly through Shutterstock.
In a nutshell, until June 1, 2020 earnings were related to total sales from the moment the account was opened. Each photographer was initially paid a minimum of $0.25 per photo. This figure was then gradually increased as sales increased up to $0.38 once a photographer earned $10,000.
This, however, not counting extended licenses and other types of sales where a photo could be sold for anywhere from a few dollars to over $100 or more.
As you can see we are talking about very low prices already, but the advantage of microstock is the possibility of selling the same content thousands of times.
In an extremely unfortunate and short-sighted maneuver, however, Shutterstock’s new CEO Stan Pavlovsky decided to change the commission model by cutting photographers’ earnings by around 70%, without reducing the prices of the photos. This decision was communicated to us by sending an email 6 (S-I-X) days in advance!
The new commission model is as follows:
As if the reduction in commissions wasn’t enough, the new model is no longer calculated on the basis of total sales, but will reset to Level 1 for all photographers from 1 January:
On June 1, you will be placed in an Image Level and a Video Level based on your download count so far in 2020. The email you receive today will let you know which levels you are in as of this morning.
How does it work?
These new levels are based on the number of times your content is licensed rather than your lifetime earnings. All contributors reset to level 1 for both images and videos every year on January 1st. There are separate levels for images and for videos, and you graduate through them independently based on your download count in each category.
What does all of this mean for us? Almost every sale is now making a photographer earn a mere $0.1 (TEN CENTS). Even photographers who sell thousands of photos per month will start every year, on January 1st, from the lowest level, and they will then be able to earn more. But still we are talking of about $0.17 of commissions per sale.
Why so much criticism?
The reasons for the criticism are many. These are some of them:
- The changes were communicated only 6 days in advance without giving anyone time to find alternative sources of income.
- Total lack of communication with photographers, some of whom have had their accounts closed just for asking questions.
- Sales price calculated not on the basis of the previous year’s sales but simply reset every 1st January.
- Net earnings basically reduced by about 70%.
- Shutterstock’s hypocrisy in trying to spin the news as a positive thing saying that this new model “will help create better opportunities for all photographers and reward performances.
- This decision comes during a particularly difficult period of time especially for photographers due to the Covid-19.
The reaction of the photographers and Shutterstock’s response
The community reacted in a quite strong way:
- The official forum has been inundated with so many posts from thousands of contributors who have been so upset by the decision that the number of posts per user has been limited to 2 per day.
- Facebook groups like this one were immediately created for photographers to try to make a united front and decide how to proceed from here on. Many other people are on this forum.
- Shutterstock’s official accounts on all social media platforms have been flooded with negative comments.
- Thousands of photographers have started to deactivate their portfolios (while others have had their images deactivated directly by Shutterstock because of their negative comments).
What has been Shutterstock’s reaction so far? Basically none. So far a very generic Facebook post was made, but it basically angered the photographers even more:
Why did Shutterstock reduce the commissions?
Shutterstock, and all the other microstock agencies, have based their business model on the profit made from content that does NOT belong to them: without US, contributors, their business is as good as dead.
You would think that such a move, which basically antagonizes those who create the value of the company, is a real suicide, but as always things are a bit more complex.
First of all, the total number of images (and other types of content) on Shutterstock, while I’m writing this article, exceeds 325 MILLION. Even though several millions of pictures have been deleted since June 1st, it’s still a drop in the ocean.
Having said that, it must be kept in mind that not all photos are equal. There are tens of millions of photos that don’t have any sales potential and actually only make Shutterstock losing money (having digital content on their servers costs real money). In addition, the most active photographers are the ones who create the best content that Shutterstock sells, and they are those who are deleting their photos and leaving the platform.
So even if the number of the images is still very high, that in itself doesn’t mean anything. Also, I think the real exodus from Shutterstock has only just begun: many photographers don’t visit forums or Facebook and will realize this change with the next payment or maybe next January.
In any case, without photographers SHUTTERSTOCK doesn’t exist.
So why was such a bold choice made? There are several theories about it.
In April, Shutterstock founder Jon Oringer left his place as CEO to Stan Pavlovsky, who is responsible for what is happening now. Oringer still holds about 40% of the shares but since then he has started selling some of them…
Stan Pavlovsky‘s move seems ideal for consolidating short-term earnings: reducing commissions makes the photographers run away but the customers are not affected immediately and it takes a few months before they will start leaving as well, since they can’t find the content needed. Note that a percentage of Pavlovsky’s salary is linked to the value of the shares.
This could give shareholders time to see in the more immediate future that the business is generating profits and could be the ideal time to sell Shutterstock completely (or merge it) to another company.
This seems to be confirmed by the response of the markets, although honestly it is still too early to draw any conclusion.
What’s gonna happen from now on?
Personally, I don’t think Shutterstock has many options.
If the real plan is to sell the company as soon as possible, nothing will change. The protests will simply be ignored and everything will proceed as if nothing had happened, at least for a few months, until all major customers move to other platforms. But then I guess Shutterstock would have already been sold to the new buyer.
If this is simply a move by a CEO who is genuinely incapable of running a company (an option that should not be ruled out), and Pavlovsky doesn’t know how the microstock world works, then I guess Shutterstock will be forced to change again. Changing the way commissions are calculated at the end of the year won’t be enough. The only thing acceptable by those who have left Shutterstock is a formal apology and re-establishing the previous commission model. And that might not even enough to convince some people to come back: many have taken it personally (and rightly so).
What can we all do?
If you are a Shutterstock contributor you can deactivate your portfolio from the Settings menu. You don’t need to delete your photos, but you can deactivate the sales, waiting until Shutterstock’s next move.
I asked for some answers directly to Stan Pavlovsky via Twitter and this was his reply:
This behavior makes me think that he is a CEO that is simply unable to do his job properly. Perhaps he was even chosen as a pawn to sacrifice for the good of the company.
What are the best alternatives to Shutterstock?
I created a page where I talk about the best microstock agencies where you can sell your pictures. The reality is, however, that Shutterstock currently has no better alternatives, at least in terms of sales volumes. The agency that comes closest is Adobe Stock, but at the moment they don’t accept editorial photos and this limits the sales a lot.
It’s hard to predict what will happen from here on in the microstock niche but if all the photographers make a united front I imagine that the other agencies will soon follow Shutterstock’s choice.
I have always discouraged uploading the pictures to a single agency giving that agency the exclusivity but if this is the future that awaits us maybe it’s time to start considering this option too. You can for example consider Alamy, an agency where you’ll sell far less pictures but where the average price per license sold is much higher.