Author Topic: Why Shutterstock and other big microstock agencies will thrive (Read 5713 times)

JuhaT · « **on:** June 10, 2020, 08:21 »

Why Shutterstock and other big microstock agencies will thrive no matter how hard they spank their golden hens.

I will try to make it short, but first of all main answer is that no matter how hard they cut the commissions, there will always be tenths of thousands of contributors, which will contribute content even with 1% commission and that fact is already proved by free image banks. Biggest free image banks have millions of beautiful images that photographers and videographers have contributed to the community. I know that the idea behind that contribution is very novel, but I’m pretty sure most of the contributors haven’t thought about the consequences of the concept of free. After a few years after microstock prices became standard, it hit hard on my stock agency. In 4 years, revenue dropped 85% because of microstock landing and owning a Finnish market area, and in that period, free image banks were about to rise. In 10 years my agency (Rodeo) revenue has been dropped a dramatic 98% of what it was ten years ago. In our customer survey in 2018, 24% of our clients were using free image banks as a primary source of stock photos, and over 70% were using free image banks as a secondary source of stock photos. Were already over 50% were using microstock agencies primarily in their stock photo source.

The point is that it doesn’t matter that a few thousand people take off their portfolios. It just doesn’t make enough impact on a bigger scale for over 300 million image banks. Also, as long as there are tenths of thousands of contributors that already contribute to free image banks, there will be much more to contribute to microstock agencies, whatever pennies they’re willing to pay. There are also big production companies that can’t just stop contributing if some leading agencies change their commissions. They have monthly expenses that have to be covered or everything collapses, or agencies probably make exclusive deals with the best to maintain the production of certain content to most essential categories.

What comes to free image banks is another story. It is pretty weird that Unsplash has over 1 million dollar expenses and probably quite impressive development staff which perhaps want something in return for their work that they make so much money with affiliate sales of Shutterstock and other agencies that they can run that business AND they get their content free from photographers. Is there a thought that free image banks are doing that for just goodwill?

It would be very interesting to see how much the biggest free image banks really make revenue. I think that a lot of contributors would change their mind to give their images for free to use for making money to other people. Not to mention of course that many designers make money with the free images too.

Keep up the spirit and thumbs up for everybody!

everest · « **Reply #1 on:** June 10, 2020, 08:46 »

Thanks you for your post. I agree on many points with you and obviously you must have tons of experience running a stock agency.

As more and more content is free or close to free there is no stopping to this race to the bottom that will put out of business many agencies and contributors. The oversupply of content is so big that it is tough to fight this situation effectively.

But everybody has to look at their numbers and see if the time spent (remember that in life time is our most valuable asset.) gives a reasonable return.

I guess that most contributors to microstock and places like Unsplash don't make a living of this revenue source so for them it is not that important to really analyze in detail if it is profitable or not.
These non pros are many times excellent photographer with content rivalling the one of the pro technically and aesthetically. But they touch only some segments of the market and in those your prediction is spot on. Pretending to live of stock doing "travel""food""generic" "nature" etc is barely profitable now even a top photographer and will become impossible in the recent future.

But there are other segments where these part timers don't usually go. Larger lifestyle shoots come to my mind. It is not easy nor cheap to book 7 to 10 models, a factory of whatever, an airport hall, wardrobe,make up etc. And those images are in large demand by business. If that demand is not met because there is no return for the producers, those will move to other outlets that offer better deals, and clients will follow them.

I think that Shutter does not care too much for every photographer lost that makes generic looking images. Any search like "beautiful forest" has hundred thousand hits. If tomorrow half disappear no major damage is done. But if you search "Team of young women playing soccer" "group of seniors exercising in residential home" "businessman interacting in jet plane" etc results are much more scarce, in Unsplash and the likes even lower. If those producers go away, I can guarantee you that Shutterstock will start sweating blood and some changes will happen quickly...

Quote from: JuhaT on June 10, 2020, 08:21

Why Shutterstock and other big microstock agencies will thrive no matter how hard they spank their golden hens.

I will try to make it short, but first of all main answer is that no matter how hard they cut the commissions, there will always be tenths of thousands of contributors, which will contribute content even with 1% commission and that fact is already proved by free image banks. Biggest free image banks have millions of beautiful images that photographers and videographers have contributed to the community. I know that the idea behind that contribution is very novel, but I’m pretty sure most of the contributors haven’t thought about the consequences of the concept of free. After a few years after microstock prices became standard, it hit hard on my stock agency. In 4 years, revenue dropped 85% because of microstock landing and owning a Finnish market area, and in that period, free image banks were about to rise. In 10 years my agency (Rodeo) revenue has been dropped a dramatic 98% of what it was ten years ago. In our customer survey in 2018, 24% of our clients were using free image banks as a primary source of stock photos, and over 70% were using free image banks as a secondary source of stock photos. Were already over 50% were using microstock agencies primarily in their stock photo source.

Keep up the spirit and thumbs up for everybody!

JuhaT · « **Reply #2 on:** June 12, 2020, 02:33 »

Hi Everest,

I agree with you on many levels. One of my points was that big producers who can step up in the game and produce that kind of high-level material usually don't have much choice, they might have 10+ people on board with high maintenance costs. If those companies are earning 20.000+ USD per agency per month from the most significant agencies, it will be hard just to shut off one of them even if commissions have cut half of one of them. I don't have inside knowledge do they have exclusive fixed deals, but I bet SS and others have guaranteed their essential supply of high-level content in some way or as they continuously make small steps to cut commissions to see how it affects. There will be some point where it will be the same effect when you put the lobster on the boiler and turn the heat on. It would be great that the few biggest production companies would team up and drive the cause and stand for all contributors, but that would be an extreme risk to themselves. It would be a real hero act and would be the most significant event in this business in decades.

What comes to free image bank people photos is the hardest part as it is a risk to use photos with recognizable people in them. So that has started a new culture of using back images. People are showing their backs everywhere, like in brochures, websites, e-commerce stores, hero-shots, etc. That is so weird as there are studies that face in the photo that makes more impact, but of course, free is an even better deal to many than 2 dollar images.

The hardest part is that people in the companies that use these free or dollar photos don't care. I have talked to many clients and got sympathies, but there is that like almost half of them who use free or cheapest images possible just because they don't care, do photographers get that 10 cents or 10 dollars commission from the image. Many of them are working in big companies and don't even use their own money, but they think that saving that one buck is somehow life savior to that company. I have heard also talk that it is a little unfair that photographers just snapping photos from there and there and get thousands of dollars per month for doing almost nothing, so there are a lot of trash talk and wrong thoughts how hard work it is to get living in this business. I have talked to many contributors who contributed to my agency, and many of them have said that in last years they have lost an average of 30% of annual commissions every year despite producing more and more every year in volume and quality of content and that goes hand in hand what I have experienced. In 10 years, we went from one of the biggest agencies in Finland to two photographers small boutique. Today it is more like a hobby than a business. I get my money out of assignments.

sanjiv · « **Reply #3 on:** June 12, 2020, 05:12 »

Juha T,
Thanks for the honest opinion and your insight knowledge. You are absolutely right!
Keep it up!

CommuniCat · « **Reply #4 on:** June 12, 2020, 05:45 »

One of my clients in the telecoms space fronted up to a major industry exhibition. They spent a huge amount of money on their stand and one of their key competitors was right next door to them.

You guess where this is going, right? By chance, the designers for both companies had used the exact same cheap stock image to market their companies at the same show that year. It was hugely embarrassing for everyone concerned.

The result is that they contacted me and I was literally flown around the world to shoot a portfolio of custom stock images for them. Dubai, Kenya, Mozambique, Hong Kong, Washinton DC, London and Belgium.

Your insights are so very valuable and interesting. Clearly there is a market - it just may be a lot smaller and better served at a far higher price with niche content that is very difficult for others to get.

thx9000 · « **Reply #5 on:** June 12, 2020, 06:13 »

Quote from: JuhaT on June 12, 2020, 02:33

..One of my points was that big producers who can step up in the game and produce that kind of high-level material usually don't have much choice, they might have 10+ people on board with high maintenance costs. If those companies are earning 20.000+ USD per agency per month from the most significant agencies, it will be hard just to shut off one of them even if commissions have cut half of one of them..

I've already read accounts of big operations closing because of the changes. I'm sure they won't pull their portfolios but as far as producing is concerned they are done.

cobalt · « **Reply #6 on:** June 12, 2020, 06:27 »

Unsplash is still burning jnvestor money. I have yet to hear they are a profitable business.

As for their content: a lot of the best content is „gifted“ to the world by photographers who are paid employees of unsplash.

The first few pages of unsplash always look good, but turn any search towards „newest“ content and look at the horros that await you.

Free content has been around since the creative commons license on flckr.

I am really curious to see where the free sites go. They must live of something after all.

JuhaT · « **Reply #7 on:** June 12, 2020, 06:38 »

Thanks, CommuniCat,

that fear is real in many industries, more niche, more likely to have a competitor to use the same image as there isn't much images at the market. I have seen some images in free image banks to have 200.000 downloads if those images are in many free image banks they have even more potential to be used at the competitor's marketing.

There is a nice market segment indeed to contact those special industries and sell your assignment gigs to avoid those situations.

Quote from: CommuniCat on June 12, 2020, 05:45

One of my clients in the telecoms space fronted up to a major industry exhibition. They spent a huge amount of money on their stand and one of their key competitors was right next door to them.

You guess where this is going, right? By chance, the designers for both companies had used the exact same cheap stock image to market their companies at the same show that year. It was hugely embarrassing for everyone concerned.

The result is that they contacted me and I was literally flown around the world to shoot a portfolio of custom stock images for them. Dubai, Kenya, Mozambique, Hong Kong, Washinton DC, London, and Belgium.

Your insights are so very valuable and interesting. Clearly there is a market - it just may be a lot smaller and better served at a far higher price with niche content that is very difficult for others to get.

JuhaT · « **Reply #8 on:** June 12, 2020, 06:56 »

Thanks Cobalt, that is very interesting info.

Where you have read that they have so much investor money to offer free images without making real money in return? I have found many one photographer free image sites where the content is next to amazing and I can't believe that someone could give that kind of content for free unless getting good money in return some way. I have no idea what kind of money there is involved in affiliate business in those free image banks but I would pay big bucks for the info if I just had the money for it. That model is interesting but it if affecting to the whole business more than many could believe. It affects majority of client's minds and how they feel about the concept of paying something for the images. Think about if a few thousand graphic designers would start to design for free. It would be like a similar concept and I'm sure a whole industry branch would be infuriated and would start flaming that concept immeadidly to every client they know but that is kind of happening in different scale already by Fiverr.com and similar services where you can buy quite spectacular design for just s few dollars. Compared to Finnish prices people pay here at least 300+ euros for logo design and for big companies it can be 100.000+ euros per logo. You get that same Fiverr price despite of the size of the company. In stock and image business big boys have been so clever how they have done it in 15 years to ruin the whole business and now probably running it so low that they have started to suffocate themselves because that is just pure stupidness what SS has now started with their new commission rates.

I read in the Unsplash blog post where they told me that running costs are over 98.000 USD per month. That didn't even include salaries I think.

Quote from: cobalt on June 12, 2020, 06:27

Unsplash is still burning jnvestor money. I have yet to hear they are a profitable business.

As for their content: a lot of the best content is „gifted“ to the world by photographers who are paid employees of unsplash.

The first few pages of unsplash always look good, but turn any search towards „newest“ content and look at the horros that await you.

Free content has been around since the creative commons license on flckr.

I am really curious to see where the free sites go. They must live of something after all.

PaulieWalnuts · « **Reply #9 on:** June 12, 2020, 08:17 »

Someone needs to educate these free contributors. They probably have no idea what they're getting themselves into and will likely regret it later.

And one of these stock companies should be actively recruiting them to move their work to stock. It would be more competition in stock, but that's better than competing against free. And if there were few/no free options, end-users would have little choice but to buy images. Or just buy these stock sites for their content or shut them down as a loss.

cobalt · « **Reply #10 on:** June 12, 2020, 08:33 »

This article is in German, but well researched.

Unsplash is a startup, I don‘t think they are anywhere near profitability. One of many places „building community“, hoping that at some point later somebody will figure out how to make money with it.

https://www.alltageinesfotoproduzenten.de/2019/01/15/das-geschaeftsmodell-hinter-kostenlosen-bildern-am-beispiel-unsplash/

They do seem to have a lot of funding, so they can probably burn their investors money for a few more years.

Perhaps at some point somebody will step in and buy „the unsplash story“. Personally I doubt it.

Pixabay is a small outfit, most people have never heard of. But unsplash is really advertising everywhwere, they are spending a crazy amount to attract people to a free site.

They will never have enough interesting content for the professional buyer, but they are a nuisance.

JuhaT · « **Reply #11 on:** June 12, 2020, 09:18 »

Wow! Thanks. That was an amazing article and thank god Google Translate!

Very interesting that you can get millions from investors if you're able to build such a community which is like mentioned in an article a pyramid scheme to some extent.

I have to read those other related articles too.

Quote from: cobalt on June 12, 2020, 08:33

This article is in German, but well researched.

Unsplash is a startup, I don‘t think they are anywhere near profitability. One of many places „building community“, hoping that at some point later somebody will figure out how to make money with it.

https://www.alltageinesfotoproduzenten.de/2019/01/15/das-geschaeftsmodell-hinter-kostenlosen-bildern-am-beispiel-unsplash/

They do seem to have a lot of funding, so they can probably burn their investors money for a few more years.

Perhaps at some point somebody will step in and buy „the unsplash story“. Personally I doubt it.

Pixabay is a small outfit, most people have never heard of. But unsplash is really advertising everywhwere, they are spending a crazy amount to attract people to a free site.

They will never have enough interesting content for the professional buyer, but they are a nuisance.

aitor · « **Reply #12 on:** June 12, 2020, 09:22 »

So... big guys win and there's nothing we can do?

cobalt · « **Reply #13 on:** June 12, 2020, 14:18 »

I think if you just combine the right buzzwords - community, internet,disruption,vertical market,crowd sourced...mix it all up somehow, maybe add bitcoin and crypto... have a website with an earcatching name and sleek design...and....an app! with a bit of a game built in, likes and hearts and comments...I think you can attract a crazy amount of money.

In a zero interest world investors are desperate, so they throw a lot of money at all these start ups that don‘t understand or use the tech.

And every time there is one that makes it, 5000 new platforms are showered with money.

THP Creative · « **Reply #14 on:** June 12, 2020, 16:41 »

Quote from: cobalt on June 12, 2020, 14:18

I think if you just combine the right buzzwords - community, internet,disruption,vertical market,crowd sourced...mix it all up somehow, maybe add bitcoin and crypto... have a website with an earcatching name and sleek design...and....an app! with a bit of a game built in, likes and hearts and comments...I think you can attract a crazy amount of money.

In a zero interest world investors are desperate, so they throw a lot of money at all these start ups that don‘t understand or use the tech.

And every time there is one that makes it, 5000 new platforms are showered with money.

I like it. How about:

www.InstaDisruptCrytpoStockChainCommunityTube.com

Concept: Everyone gives the site free everything. Every 'like' you get, you pay the site $1. Buy you get....exposure!

Investors welcome.

Sadly I think you're right Cobalt, so many startups that never amount to anything except some disappointed people.

Pauws99 · « **Reply #15 on:** June 13, 2020, 01:49 »

One of the issues is not about what the image factories are doing now but what they will do. If they can't achive a return on investment they will stop producing costly images or do the marketing and selling themselves. Acurs and a few others do it and its becoming a more attractive proposition. Microstock is not the only channel.

Pauws99 · « **Reply #16 on:** June 13, 2020, 02:51 »

Quote from: cobalt on June 12, 2020, 14:18

I think if you just combine the right buzzwords - community, internet,disruption,vertical market,crowd sourced...mix it all up somehow, maybe add bitcoin and crypto... have a website with an earcatching name and sleek design...and....an app! with a bit of a game built in, likes and hearts and comments...I think you can attract a crazy amount of money.

In a zero interest world investors are desperate, so they throw a lot of money at all these start ups that don‘t understand or use the tech.

And every time there is one that makes it, 5000 new platforms are showered with money.

With the spectacular failure of Wemark I doubt any investors with a modicum of nous would consider investing in a microstock start up they have probably moved onto the next big thing........

pics2 · « **Reply #17 on:** June 13, 2020, 03:10 »

Quote from: JuhaT on June 12, 2020, 02:33

Hi Everest,

I agree with you on many levels. One of my points was that big producers who can step up in the game and produce that kind of high-level material usually don't have much choice, they might have 10+ people on board with high maintenance costs. If those companies are earning 20.000+ USD per agency per month from the most significant agencies, it will be hard just to shut off one of them even if commissions have cut half of one of them.

The only thing I don't agree with you is about these factories. They do have a choice, and a lot of them. We are talking about people who are successful businessman with a lot of cash. They are not some Unsplash enthusiasts, they can switch businesses and they have potential to switch businesses very easy (their potential are their obvious business talent and skills - not everybody can build up a big production or factory, I can't, I don't have those skills, and they have a lot of cash and savings). So, it is realistic to expect that big factories will leave microstock business as soon as they find it unsustainable. Even more they are the only one among contributors that will react by the laws of market and the only one that will avoid that effect of boiling lobster or frog, because they are professional businessmen, you can't fool them. The majority of small contributors will be, however, fooled. So I'm still optimistic that these factories will take a stand and will make a crucial change in negotiation with SS.

buddy s · « **Reply #18 on:** June 14, 2020, 21:12 »

THANK YOU so much for pointing out the danger of free sites.

There is one enemy that NO ONE is pointing out. Google.

I saw someone posted this on another site and I had to try it out. Try Googling "stock photo of nature".

You see a bunch of paid ads, but the "organic" search listings (the part that everyone pays attention to) has Pexels.com at #1, Unsplash.com at #2.

Try it. Search for ANYTHING and Pexels seems to be #1. Shutterstock and Adobe and Getty are almost nowhere to be seen.

Google is single handedly destroying our whole industry. It's telling people who search for "stock photos" that they shouldn't visit Adobe, Getty, or Shutterstock where they can pay for downloading our images. It's telling them that it's normal to expect stock photos to be free.

It's try that if you take the time to search Unsplash you get garbage after the first few pages. But do a reverse image search of the photos on the first three pages and you'll see THOUSANDS of sites using them--a lot of them really big ones.

Google has destroyed many other industries this way. We're the next one. And it seems like there's not a damned thing we can do about it AS LONG AS OUR FELLOW PHOTOGRAPHERS AND ARTISTS KEEP FEEDING THE BEAST and making Pexels, Unsplash, FreePik, Pixabay, and other sites like that successful by dumping their high quality photos in exchange for "views" but NO money.

This guy's video should be REQUIRED VIEWING from everyone in our industry.
newbielink:https://www.youtube.com/watch?v=6M_OZWtpokc [nonactive]

Long story short, there are a bunch of photographers out there who produce decent stuff but are hypnotized by Pexel's promise to "make the Web a more beautiful place" or whatever nonsense they're spewing. These photographers dump great stuff onto these sites for NO money, just nonstop dopamine hits when the site says "your photo was featured in such-and-such a site!" or "your photo got so many millions of views!" In the meantime, these sites are laughing all the way to the bank. Pexels and Pixabay just sold themselves to Canva for what was likely hundreds of millions of dollars. How much did contributors get? NOTHING. Not even 10 cents.

Worse, these photographers are all amateurs who don't know anything about known restrictions, model releases, etc. So there's a double joke on them--Pexels runs away with money from their photos, but if they're ever sued they just pass the legal risk on to the photographer.

Think about it--why iStock, Shutterstock slashing their prices and passing it on to us? It's because whatever traffic they used to get from Google is no longer there. In fact, you can see that Shutterstock, Adobe are paying for clicks with paid ads. One click might be $5-10 while Unsplash and Pexels get clicks for free.

Unfortunately there's nothing we can do in terms of complaining to Google. But what we can do is spread the word to photographers NOT to be idiots by contributing to free sites. We're spending so much energy over a 25c drop in payment (and as someone who is going to see losses I'm all for that). But we're also ignoring that these free contributors are being fooled into doing away with our industry altogether.

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Author Topic: Why Shutterstock and other big microstock agencies will thrive (Read 5713 times)

JuhaT

everest

JuhaT

sanjiv

CommuniCat

thx9000

cobalt

JuhaT

JuhaT

PaulieWalnuts

cobalt

JuhaT

aitor

cobalt

THP Creative

Pauws99

Pauws99

pics2

buddy s

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