Seems they have been sold

Hi there,
 
We hope this email finds you well.

We�re reaching out to share some exciting news. Envato has entered into a definitive agreement to be acquired by Shutterstock, a leading global creative platform. This agreement is subject to customary conditions and is expected to close in the third quarter of this calendar year. This agreement marks a significant milestone in our journey, and we wanted to take a moment to let you know what this means for you, our Authors. 
 
Most importantly, Envato�s commitment to empowering creatives will continue. The services and support you have come to expect from us, and the relationship we have with you, will remain.
 
We see this as a pivotal moment in Envato�s journey and are excited for the future. We have confidence in the alignment of values and the strong strategic fit that underpin this upcoming union between Envato and Shutterstock.
 
We will continue to keep you informed of any important updates that come with this transition.
 
Finally, we want to express our gratitude to you, our authors, for your continued support and dedication to the Envato community. As we move forward, we will continue to listen to the needs of our creative community, build innovative products, and create an environment where your creativity can thrive.
 
If you are interested in finding out more about the agreement, head to the media statement.
 
We look forward to shaping the future of creativity with you.
 
Thanks,

Hmm, its mean SS gaining weight and they are not paying good money to Authors / Contributor
I am author of (Themeforest,Codecanyon and Graphicriver) Since 2014 and Envato is continuously sinking.

and same situation going on with SS, anyone agree with me?

When you can't grow your core business, acquire another company SS announced their Q1 2024 earnings this morning and most of the numbers were lower than Q1 2023. The stock was higher (market hasn't oopened yet) I think because they beat analyst estimates, not so much because anything was really good.

Look at their presentation on why acquiring Envato is good for SS

https://investor.shutterstock.com/static-files/2ec3aa7b-1877-45b1-9be6-3fa663cc64b2

If you look at the chart where they brag it will more than double subscriber numbers, they show it's currently 499k (end of Q1 2024). At the end of 2022 it was 586k. It's more like plugging the hole and trying to avoid further drops...

https://investor.shutterstock.com/news-releases/news-release-details/shutterstock-reports-first-quarter-2024-financial-results

https://www.prnewswire.com/news-releases/shutterstock-enters-into-definitive-agreement-to-acquire-envato-featuring-envato-elements-the-unlimited-creative-content-subscription-302134019.html

Look at the paid download numbers - down to 35m from 42.7m in Q1 2023, and subscriber revenue down from $90.6m to $83.9m

That report is blatantly honest - failure to grow the stock business.

Compare with Adobe is enjoying stable growth, no drama, great support, free photoshop/ creative suite for producers, great producer support team.

producers are customers, the old Shutterstock team knew that having thousands of graphic designers who are happy and keep recommending you, is a huge plus.

Would it not have been a lot cheaper, to keep the forums open, to keep a support team going and to keep growing organically instead of wasting money on buying pond5 and envato?

How many years will it take for those investments to pay themselves??

eta:

they spent 240 million on pond5, lets say another 150mio for envato, so there could be around 400mio in aquisition costs.

And so far their deal with pond5 did not bring them any growth, inspite of owning it for 3 years, they are losing customers.

Imagine they had just kept Shutterstock the way it was, used those 400mio to focus on organic growth and add their ai project...where would they be now?

I may have missed some (I did a google search for "shutterstock acquires") but here are Shutterstock's purchases over the years. They haven't acquired Envato yet (Q3 this year according to the press release). SS sold WebDAM Feb 16, 2018

Feb 1, 2024 - Shutterstock Acquires Backgrid Celebrity News Network

May 24, 2023 - Shutterstock acquires Giphy

May 11, 2022 � Shutterstock Acquires Pond5 for $210 Million

May 31, 2022 � SHUTTERSTOCK ACQUIRES SPLASH NEWS

Sep 10, 2021 � Shutterstock Acquires PicMonkey

Jul 27, 2021  - Shutterstock acquires Pattern89, Datasine, and Shotzr

Jan 26, 2021 - Shutterstock acquires the 3D model company TurboSquid

Nov 11, 2020 - Shutterstock acquires AI-driven music platform Amper Music.

Jun 28, 2017 - Shutterstock acquires Flashstock Technology

Sep 6, 2016 - Shutterstock Acquires Iconic Imagery from The Kobal Collection and The Art Archive

Jan 15, 2015 - Shutterstock Acquires Rex Features And PremiumBeat,

Mar 3, 2014 - Shutterstock Acquires Digital Asset Management Service WebDAM

Sep 23, 2009 - Shutterstock Announces Acquisition of BigStockPhoto

It is a balance of course and in principle growing market share through acquisition can be very strategic and beneficial.

But you must have a basic understanding of client needs and in our case clients and producers are often the same people.

Much worse than not being able to grow the business organically is the severe drop in uploads, especially video uploads.

And then you have to consider that their lack of growth already includes all the customer contracts they bought when taking over other stock companies.

So how bad is it for Shutterstock itself?

So between p5 and envato they spent around 500 million dollars.

I can think of a lot of things you can do with 500 million to grow organically and attract market share.

Buying smaller, specialized collections is a different thing, but p5 and envato, at least in principle, should have similar content to Shutterstock and also mostly the same buyer group, especially p5.

Overall for producers I do not think this will bring a big change.

Adobe changes nothing and keeps growing their business and their uploads from producers keep increasing.

Will be interesting to see what happens next year when ai video becomes really usable and Adobe can start building a huge ai collection.

That will attract a lot of interesting talent, so many people out there wanting to do their own little movies and clips. They have great ideas but no Hollywood budget.

Adobe can position itself as the true indie creative hotspot with that.

They can supply ai stock clips, but also buy a lot of clips to adjust with ai for their needs.

Like with images, Adobe offers both tools and resources and integrates itself smoothly into the workflow.

How will istock and shutterstock compete against that?

I may have missed some (I did a google search for "shutterstock acquires") but here are Shutterstock's purchases over the years. They haven't acquired Envato yet (Q3 this year according to the press release). SS sold WebDAM Feb 16, 2018

Feb 1, 2024 - Shutterstock Acquires Backgrid Celebrity News Network

May 24, 2023 - Shutterstock acquires Giphy

May 11, 2022 � Shutterstock Acquires Pond5 for $210 Million

May 31, 2022 � SHUTTERSTOCK ACQUIRES SPLASH NEWS

Sep 10, 2021 � Shutterstock Acquires PicMonkey

Jul 27, 2021  - Shutterstock acquires Pattern89, Datasine, and Shotzr

Jan 26, 2021 - Shutterstock acquires the 3D model company TurboSquid

Nov 11, 2020 - Shutterstock acquires AI-driven music platform Amper Music.

Jun 28, 2017 - Shutterstock acquires Flashstock Technology

Sep 6, 2016 - Shutterstock Acquires Iconic Imagery from The Kobal Collection and The Art Archive

Jan 15, 2015 - Shutterstock Acquires Rex Features And PremiumBeat,

Mar 3, 2014 - Shutterstock Acquires Digital Asset Management Service WebDAM

Sep 23, 2009 - Shutterstock Announces Acquisition of BigStockPhoto

This is crazy and they do not think for their contributors.. more than half of the earning just wiped out with their earning model. Shame on them.

Who will they buy next? Any guesses?

I think they will be Dreamstime, Depositphotos, 123RF. Getty Images probably not their capitalization is 1.6 billion dollars and that is a lot for Shutterstock.

I would guess DepositPhotos, as Dreamstime and 123rf are taking AI images and they don't want that.

DepositPhotos was acquired in 2021 by VistaPrint (a subsidiary of Cimpress). Even though their latest quarterly report wasn't great, the Vista section is the biggest part of the company and I can't imagine a sale would be cheap at this point.

In Shutterstock's earnings call yesterday they talked up the continued growth of their data licensing business. That was growing (big percentage but small actual cash) whereas the "Content" revenue was down 10%. To put that in context, the $20m growth in DDS (data licensing) was just about equal to the $20m decline in content revenue - but a 90% increase sounds so much more impressive when talking the business up to investors.

What Shutterstock needs is a huge amount of new (well keyworded) content to grow their data licensing business. I'd take a guess that Deposit Photos is largely an overlap with SS's existing collection and so of no real value to them.

I think they're way off base with their projections for growing the DDS business, largely because big as their library is, it is way too small for many/most of the training uses. From the earnings call:

"On the supply side, to match the demand we are seeing for data, we are focused on growing our base of contributors and the depth and breadth and size of our library. Our contributor base has increased by over 40% to 3.4 million in the past year alone, and our library growth is accelerating, growing 34% to almost 900 million assets in the last 12 months. We have never seen contributors in data grow this fast and we believe that the flywheel is spinning faster. "

Again from the earnings call, they see Envato as a feed into their DDS business as well as revenue from the $16.50 a month unlimited subscriptions:

"The acquisition adds an extremely talented contributor community who have brought a diverse library of 6 million videos, 1 million audio clips, 500,000 design templates, 300,000 3D models, 200,000 graphics and fonts, and 10 million images, all of which have tremendous potential value for both our creative content customers and our data customers."

One of the analyst questions was about a possible deal with Apple (who is still in the starting blocks with regard to AI) and whether that would increase the expected revenue from DDS: "And then on the DDS business, is $60 million still the right number to think about for Computer Vision? There were some rumors that an Apple deal was signed early in the quarter. ". SS wouldn't say anything specific about a deal with Apple.

Paul Hennessy replying to a question talks about Envato and the DDS business:

"On the Envato question, more content. I talked about the growth in content in our core business; more content, diversified content, specific content that we may not have is all great opportunities to grow our data business, and there�s interest from data partners in wide varieties of content and as much as we can give them. So we�re seeing real change in that market where we are wondering if people would be demanding all product types and we�re actually seeing a level of insatiable desire for a diversity of content types with all sorts of levels of specificity increasing. So we�re bullish."

Another analyst asked about growth in the contributor base and library (separately from the Envato acquisition) and Hennessy produced this totally content free buzzword salad:

"And regarding the contributors, our content growth, the scale, organic and otherwise, what I can tell you is as our business evolves from purely serving the needs of advertisers and folks that would have more traditional use for our content, as we opened up the aperture to include accepting content for data, the market follows that trend. And so now we�re seeing demand and supply pouring in, relating to giving us content across content types and across content use cases. So we think that that flywheel spins very, very nicely for in our favor and is actually spinning faster because as we have more content, that theoretically helps our conversion rate because we�ve got more to offer our customers that are � have more traditional use, that creates a broader opportunity for our data buyers."

So now you know!

Edited after the US stock market close to add that SSTK (Shutterstock) closed down over 6% at $39.22, pretty close to their 52-week low. I'm guessing the investment community isn't as excited as Mr. Hennessy.

The heady days of a stock price at $121 in October 2021 - courtesy of that "margin optimization" (aka pilfering contributor's royalties) seem to have been unsustainable. Couldn't happen to a more deserving company.

It's concerning that a miserable, failing agency like Shutterstock, who showed so much disregard for their contributors is now getting more of a foothold in the microstock market with this acquisition. Paid for by the many royalty cuts.
We'll have to see what it means in the long run.

While I'm not disputing that their growth is definitely slowing, there's not really anything in this chart that gives the impression they are ''going bust''.

While I'm not disputing that their growth is definitely slowing, there's not really anything in this chart that gives the impression they are ''going bust''.

How much of that revenue is "bought" revenue?

And inspite of buying so many customers and client contracts, they are losing business and have a strong drop in uploaded assets.

But I agree, they can probably keep doing this for years.

However I believe if they had stuck with the original team, open forums and direct intensive contact with customers and producers, the graphic designers at the heart of their business, they would have grown a lot more and could have saved themselves hundreds of millions of dollars.

Instead of buying pond5 and envato, they could have invested 500 million into growing their own business.

For the money invested, what returns did they get?