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New earnings structure for Contributors


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10 minutes ago, eskystudio said:

Agree. But what can hurt them is bad press and bad publicity. 
The more people make their voices heard the more  chances it will spill into larger publications. 

I don't  disagree  with you and I didn't say that threads like this are not useful. I was just saying that SS doesn't worry about it.

In my opinion though, this whole thing will not kill SS directly no matter how hard we yell and scream. I think that, even in the long run, we are still the minority 

What will kill SS is arrogance. The two biggest company killers are lack of cash flow and arrogance and I don't think that SS has a cash flow problem..........

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In an email that is going out today, we are announcing that we will be updating the earnings structure that determines how much you get paid when customers license your work. We are making this adjust

This space will be updated to address frequently asked questions.  My email shows different counts for videos than are shown above. Which is correct? Apologies. The email to video contributo

Posted Images

WHY THE NEW SYSTEM MAY BE JUST THE ANSWER AND WHAT WE NEEDED!!!

PLEASE READ BEFORE YOU RANT.

So some thoughts as to why there may be logic to the new price structure… and the sky may not fall.  And in a minute you will see why its not all bad and how for those that think it is…well maybe we the contributors did it to ourselves and it will be the same on other platforms soon.

From the ShutterStock Annual Report

·         The success of our business depends on our ability to continue to attract and retain customers of, and contributors to, our creative platform. If customers reduce or cease their spending with us, or if content contributors reduce or end their participation on our platform, our business will be harmed.

((My comment would be they know they need quality contributors but how do you get to quality without it costing… you will notice reviews are not mentioned as a factor in business success but later as a cost that isn’t wanted …they do want to pay us contributors))

·         We also compete for contributors on the basis of several similar factors including ease and speed of the upload and content review process;

((My comment—they know poor content provider come with a more complex review process and cost that increases the cost of revenue, the product, lowers what they can pay contributors, and finally lowers their profit.  If you will remember last year they went through several periods of long review…likely labor shortages is current economy that were overcome with increased wages.  They have to balance cost of review and paying us))

·         While we believe that there are obstacles to creating a meaningful network effect between customers and contributors, the barriers to creating a platform that allows for the licensing of content or provides workflow tools are low. If competitors offer higher royalties, easier submission workflows, or less rigorous vetting processes or incentivize contributors to distribute their content on an exclusive basis, contributors may choose to stop distributing new content with us or remove their existing content from our collection

((My comment—they are not trying to drive you away if you are good))

·         Cost of Revenue.    Cost of revenue consists of royalties paid to contributors, credit card processing fees, content review costs, customer service expenses, infrastructure and hosting costs related to maintaining our creative platform and cloud-based software platform, depreciation and amortization of capitalized internal-use software, content and technology intangible assets, allocated facility costs and other supporting overhead costs. Cost of revenue also consists of employee compensation, including non-cash equity-based compensation, bonuses and benefits associated with the maintenance of our creative platform and cloud-based software platform.

((My comment: further documentation that cost of review is an item that needs more control))

 

Some analysis of Cost of Revenue—For them it has been static to slightly increasing over the past couple of years.  I would speculate that review is a portion that needs to come down. With a new CEO that would be a bold step to lean up the business model.

So if you wanted to lean out this business model getting review costs down would be a great way to do it.  But you don’t want to do so in a way that makes contributors go away or reviewers quit.  What you want to do is improve the success rate of items that pass review lead to revenue.

We are all geese here.  Some lay golden eggs and some lay… well turds.  That is to say they are likely seeing a percentage of contributors that up load lots of pictures that just don’t sell.  And they probably keep on doing it because they got enough rating at some point to get to an upper tier by submitting enough junk over time.

So why the new strategy to rest tiers every year.

Is it designed to give use less money to drive us all away—NO! they list it as business risk in their financials to loose quality contributors so that might even get them in issues…I think they will actually pay us slightly more if we are quality contributors.

Then why... Here is the theory.  The new system will give less money to those that over contribute…well turds.  This helps to pay for their review by paying less to the photographer.  Second it incentivizes them to well, find a new vocation or hobby by not rewarding them for turds. 

They probably have a rating of picture submitted by contributors in different categories that led to the tier system and they know they need to get people in the lower tiers to leave or make them pay for more of the review process.

In the end this could be a very good thing for quality contributors as it could:

·         Incetivize to the turd makers to stop contributing and improve the product

·         Reduce the cost of revenue (review)—FYI if you read the financials part of the reason we don’t get a lot of money for our photos is WE have to help pay for the review of the turds.  And then everyone sits on the forum encouraging them to keep at it…cant have it both ways.  We need to shrink the flock or all learn to lay gold folks...and you have seen the quality in question in the forums all gold aint happening.

·         Increase revenue that can be share with contributors over time

Another point--this business model challenge is not unique to one stock site they all face the same cost of revenue issue...expect more tiering systems like this or other solutions....

PEOPLE HAVE COMPLAINED FOR A LONG TIME ABOUT EXCESSIVE LOW QUALITY UPLOADS THAT MADE IT IN—THIS IS WHAT A BUSINESS INCENTIVE TO CORRECT IT MIGHT JUST LOOK LIKE!

I LIKE THE NEW STRUCTURE-----FINALLY

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10 hours ago, Forum Moderation Team said:

What about subscriptions? Will those earnings be calculated as a percentage, too? Will I see earnings of less than a cent?!

When the new earnings structure goes into effect, the payout for subscription plans will not be less than 10¢.

---

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BASICALLY, what this guy saying is, instead of 0.25 , $.33 or 0.38 per image, OUR NEW RATE IS $0.10  PER IMAGE.

THAT'S ALL !!

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1 minute ago, PlopandShoot said:

I understand why they are doing it, but that doesn't mean I need to take part in it.

The company went public and therefore switched from a client-contributor centric model, to a shareholder return driven model. While they can run their business any way that they see fit, by the same token, I have no obligation to devalue my work even further to support this model. Maybe you are right and long term it works out for those few willing to start over from scratch each January for the 10 cent minimum, but it doesn't work for me.

I can make more elsewhere, without competing against myself for pennies here. 

 

Yep but you will see the others have to do something similar... in the rush to let everyone in the review cost has gotten to where it needs to be controlled.

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9 hours ago, Skyward Kick Productions said:

I really wish someone from Shutterstock would reply because this is pretty important - 

I don't think it rolls back every January the way we've all interpreted. And I'm basing this on the e-mail they sent me with my tier. I was granted a tier 4 (500-2500 sales) BUT I haven't yet made 500 sales in 2020. So that must be based on my 2019 earnings. 

 

I read it as the tiers will be increasing (or not, if the sales stay low) during the year. So yes, they calculated your tier starting June 2019. So, If you are tier 4 or 5 on December 31, on January 1st you will roll back to tier 1. 

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10 hours ago, Forum Moderation Team said:

What about subscriptions? Will those earnings be calculated as a percentage, too? Will I see earnings of less than a cent?!

When the new earnings structure goes into effect, the payout for subscription plans will not be less than 10¢.

If a customer buys a pack or sub, but doesn’t use it all, how are my earnings calculated?

When a customer buys a pack or subscription, your commission is calculated based on the price per asset assuming full usage of the pack or subscription. For example, if a customer buys a 10 images per month subscription at $49 per month, the price per image is $4.90. Your earnings percentage is based on $4.90 regardless of how many images the customer downloads from their allotment. 

How much do I earn if a customer downloads my content during a “free trial”?

When a customer downloads your image as part of a free trial, your commission is based on your earnings level, as with all other downloads. The price per asset we use to calculate your earning depends on the package or promotion the customer is using, but your commission will not be lower than 10¢.

What about subscriptions? Will those earnings be calculated as a percentage, too? - What is the exact answer to this question? "the payout for subscription plans will not be less than 10¢" is not a sufficient answer

How much do I earn if a customer downloads my content during a “free trial”? What is the exact answer to this question? "your commission will not be lower than 10¢" is not a sufficient answer.

@Kate Shutterstock, The information given above is still incomplete.  Are you saying that in that new scenario we will all be paid, at level 1, on Jun 1/Jan 1 using the following formula for the above example: $4.90*0.15= $0.73?

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1 minute ago, PlopandShoot said:

We shall see. Conventional wisdom a few years back (and I will have to find the article) that an accurate and realistic commission would be at the very most 50% to the company, and even less than that would be how companies should compete for content producers. Mainly because the company produces no product and the price of digital storage continues to decrease every year. The company is a service company only, connecting buyers and content producers. Any company that can't function on a 30-50% commission deserves to fail in my opinion.

Competency testing before submissions, having a limit to uploads based on previously approved submissions, and having a "turn off this portfolio" function on the client side, reduces the need to for more and more reviewers.

As far as spam and thievery goes, every image submitted should be checked against the existing database (yes it takes time). A duplicate within the same portfolio can result in a warning (3 strike rule?) and a duplicate in different portfolios means one is a thief. Easy peasy.

Finally, all content is not equal. Have tiers for content (not producers) for crap, mediocre, and quality. Gives us all something to aim for and a reason to improve. 

Shutterstock has billed themselves as a technology company more than once. Too bad they can't innovate their way into success.

Bigger problem is new photos, minimum quality met...but no commercial value.  That is the bigger threat to them.  Because of legal rights they cant ban them like you can with 3 strike you for duplicate.  As for the need to improve that is exactly what they are trying.  While they mask the levels photos are purchased at a look at the financials suggest more subs are purchased at a higher price than people are assuming. Their top 25 accounts only account for 3 percent of sales and the larger and growing business is with small organizations where even with subs the percentage payment system they are implementing.

Everyone is assuming we will make lest based on a tier list but not seeing anyone analyze the data and it suggests it wont be that bad for tier 4 and up.  And the initial low rate will be made up if you keep your volume each year...

Am I the only one working the numbers?

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Stock is an additional incoming for me, and I don’t have much downloads. To collect 250 dowlds to have 30% I need to wait may be half a year or more. It seems for me, SS just want contributors work on stock 24/7 full time, working from sunrise to sunset - to reach previous 30%, or do not work with SS at all. So I don’t see any reason for me now to continue upload from 1 January 2021, when I will spend my working time as before, but - I don’t know why - I will get only 15-20%... SS do not explain us why we all should reduce our earnings when SS will get more.

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1 hour ago, Daria Rosen said:

image.png.9ed01917553717df644afbaf4e6eb2
I does not matter which level are you, you will get 10-20c per image, because bigger customers buy bigger sets. So the drop is from 38c per image to 20c. Twice at least, but I think most of the contributors will get their 10c per image.

reposting to share this helpful graph.

I guess we will all know in 2 weeks! 

I never, ever post in these forums, but adding my voice of dissent here today.

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11 minutes ago, Philip Rozenski said:

Bigger problem is new photos, minimum quality met...but no commercial value.  That is the bigger threat to them.  Because of legal rights they cant ban them like you can with 3 strike you for duplicate.  As for the need to improve that is exactly what they are trying.  While they mask the levels photos are purchased at a look at the financials suggest more subs are purchased at a higher price than people are assuming. Their top 25 accounts only account for 3 percent of sales and the larger and growing business is with small organizations where even with subs the percentage payment system they are implementing.

Everyone is assuming we will make lest based on a tier list but not seeing anyone analyze the data and it suggests it wont be that bad for tier 4 and up.  And the initial low rate will be made up if you keep your volume each year...

Am I the only one working the numbers?

Umm, I think you might want to look at the chart again. The only subs that will make any money are the 5-10 images a month. I suspect those are a small percentage of the users. Most sub plans are the 350-750 and the highest you can get from those is 23 cents! Work hard all year to finally get to 23 cents in December only to have it go back to a dime in Jan. How depressing is that!!!

SO, yeah, if you happen to get all the business from the lower tear more expensive plans, there is a chance to make more per image, but remember, they max out at ten images. So they are not buying much.

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wow, I've seen steaming crocks full of a lot of things but this is by far the worst of it. got here in 2008, and have seen a lot of changes, yet didn't think i'd see something so ridiculous and repulsive towards the community you really should be cultivating, yet here we find ourselves. 

some 'cleverly designed' kind of treadmill where we are the mice, to be constantly vying for your approvals in our efforts, as if we're to drive our own sales in order for our content to be a fraction of what it has been. what a joke. thats what your percentage used to be for. now you want a lions share for providing the marketplace only. nope. not how this is meant to work.  

I wonder if your servers will hold up with all the requests to pull portfolios, such as I will be doing and I imagine others will be too.  

so long SS. get your heads checked, collectively. 

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1 hour ago, Puffin's Pictures said:

Forwarded the info to a couple other people in entertainment, one of which does not take kindly to the ongoing devaluation of the arts, and suggested they boycott SS if they need to license content. Here's hoping this spreads like wildlfire.

Interestingly, they've already prepared for a boycott back in May of 2014. Wonder what payment structure they changed back then.

https://domainnamewire.com/2014/05/06/is-shutterstock-worried-about-a-boycott/

 

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I think what this clearly means that SS has reached a tipping point where there are more content creators ( By the way, many like me are bogus non-professionals!!! ) than there are consumers, and hence the management really does not mind if a significant amount of contributors move out of its fold!!!

Because, they clearly believe that even if a significant amount of contributors ditch them, they can still run their business with ease.

It is this confidence ( you may call it arrogance ) that translated into this new pay-structure!!

"Take it or Leave it", seems to be their motto!!!

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I've been here for 15 years.... and I stopped contributing last year because I just see that sales are not what they used to be. I upload elsewhere instead... After this announcement,  I am sorry but I won't upload more files anymore.. I will certainly support other stock agencies which pay me what I deserve. It is time to move on. 

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So someone asked what would a model 

So say you had an image that sold 285 times and had made $71.25.  How would it perform... well we don't know.  Everyone assumes that all subs are 750 low value accounts.  Actually not likely since there are no roll overs you wont go up a tier in subs unless you have to as you simply loose them.  

SCENARIO ONE

10% sold to bloggers with month 10 image sub--about 28.5 images for $24.80--you will notice doesn't take much for this to start to make serous $$

40% to marketing and IT groups with 50 month sub--about 114 images for $67.72--this tier is where the real money will come from.

30% to media and marketing groups with 350 sub--about 85.5 images for $12.39

20% to large media with 750 sub--about 57 images for $4.54

Total in scenario for subs only $109.43 in new market at tier IV but $127.67 or $145.91 at V and VI respectively... this would just be subs and no directs and a 35%--51% increase in revenue for you

VERSION TWO

5% sold to bloggers with month 10 image sub--about 14.25 images for $12.40

30% to marketing and IT groups with 50 month sub--about 85.5 images for $50.79

25% to media and marketing groups with 350 sub--about 71.25 images for $10.32

40% to large media with 750 sub--about 114 images for $9.08

Total in scenario for subs only $82.58 in new market at tier IV but $96.34 or $110.11 at V and VI respectively... this would just be subs and no directs  and a 14%--35% increase in revenue for you.

I ran the model today and its hare for anyone at Tier IV and up within 3 months to not make more $$

 You have to know who you are selling to.  What is likely is if you portfolio is more editorial... yeah you will be selling more to the 750 media accounts.  If you are more commercial you will be in the 50 range.  the 10 range is kind of random.  Read the annual report about their customer base it will make more sense.  Cant guarantee but you get the point... not likely the collapse of society and they can push out people that don't leave tier 1-3

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@Philip Rozenski - The question is, which model scenario is it. What are the most common packages bought? I asked that question of Kate something like 20 pages of this thread ago, but no answer was given. Personally, I will take a wait and see approach to this until July 1. If my earnings crash to the floor during June, then I'll know this new thing is not working out for me, and can make further decisions then.

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34 minutes ago, Eric Urquhart said:

Umm, I think you might want to look at the chart again. The only subs that will make any money are the 5-10 images a month. I suspect those are a small percentage of the users. Most sub plans are the 350-750 and the highest you can get from those is 23 cents! Work hard all year to finally get to 23 cents in December only to have it go back to a dime in Jan. How depressing is that!!!

SO, yeah, if you happen to get all the business from the lower tear more expensive plans, there is a chance to make more per image, but remember, they max out at ten images. So they are not buying much.

 Actually the have 1.9 million active users--say 90% on subscription or 1.71MM-- but 80% are image and 20% are video so 1.368 photo focuses subscribers.

46 million downloads Q1--about 184 million a year-- we will say 80% are images so say 147.2MM images per year or 12MM per month and we will contribute them all to subscription for shits and grins.

That is less than 9 subscription photos taken per account... someone in the art department is getting fired as they wasted $100 a month every month on subs. 

I can run a solve for on the formulas in the model for you tomorrow but it is late.  But basically most will sell in the 50 per month subs or you would be getting a shit ton of direct downloads.  You have to understand the 10 and 50 downloads are cheap alternatives to direct download costs.

 

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3 minutes ago, Milo J said:

@Philip Rozenski - The question is, which model scenario is it. What are the most common packages bought? I asked that question of Kate something like 20 pages of this thread ago, but no answer was given. Personally, I will take a wait and see approach to this until July 1. If my earnings crash to the floor during June, then I'll know this new thing is not working out for me, and can make further decisions then.

See above with data from annual report... I am seeing data that points to a large number in the 50.

What is amazing is all of this is going on and no one is reading the annual reports, running models etc...  it was just run for the door.  

Again to me it feels they are trying to reduce cost of review by pushing out the low volume revenue accounts that put a high burden on review costs.  I think if you make tier iv in the first 3 months you could be looking at higher revenue not less.

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2 minutes ago, Philip Rozenski said:

See above with data from annual report... I am seeing data that points to a large number in the 50

That would be reassuring, but if that is so, why would Kate not say so? Could have doused the flames.

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