Shutterstock commission cut: What can we expect?

Few days ago, Shutterstock microstock agency introduced a new commission structure which looks totally horrible. It has caused an extreme fury and despair among photographers especially because of resetting the achieved level every year on January 1. In this article, I will try to estimate how large the cut will be in real life. Will it really be such a disaster? Will it be better or worse than expected?

Until now, Shutterstock used a commission structure where photographers advanced to further levels which gave them higher percentages and higher basic commissions for each licence. Forever. It was quite easy and motivated everybody to get better.

Previous commission structure (valid until May 31, 2020)

Since June 1, 2020, things are getting much more complicated. There are 6 levels which are sometimes better, sometimes worse. Basically, the photographer will get 15-40 % of the price that was paid by a buyer. The problem is that even the best contributors on the highest level will get much lower commission for subscription sales when the buyer has a plan with the best prices per image (for sets of 350 or 750 images). To be precise, it is going to be $0.135 or $0.192 per image whereas the worst contributors got at least $0.25 per image ($0.38 on the highest level) in the current system. On the other hand, if the buyer has a plan with lower prices for a plan (higher prices per image, sets of 10 or 50 images), the photographer will profit from the new structure.

Shutterstock - new commission structure
New commission structure

Therefore, I have computed the commissions for images for each level and each licence. Shutterstock ensures us that the minimum payment will be 10 cents even if the price and percentage should give a lower amount. As you can see in the table below, first two subscriptions may bring very interesting commissions and the first can even bring $1.16 per image for a contributor. It is much higher than the current maximum of $0.38 per image. On the other hand, it is exteremely difficult to get Tier/Level 6 and it is probably not very common to concurrently have a sale from $29/10 subscription.

On Demand$49/5 ($9.8)$1.47$1.96$2.45$2.94$3.43$3.92
$229/25 ($9.16)$1.37$1.83$2.29$2.74$3.21$3.66
Subscription$29/10 ($2.9)$0.44$0.58$0.73$0.87$1.02$1.16
$99/50 ($1.98)$0.30$0.40$0.50$0.59$0.69$0.79
$169/350 ($0.48)$0.10$0.10$0.12$0.144$0.168$0.192
$249/750 ($0.33)$0.10$0.10$0.10$0.10$0.116$0.135
The commission structure

I have taken data from the first five months at my account which is at 3rd level in the old system ($0.36/$2.70) and 4th level in the new one (30% commission). 92 % of my images are bought using the subscription at $0.36, 6.5 % of images are bought as On Demand (basically all of them at higher price at $2.70) and only 1.5 % images are Single&Other with average price of $4.8 per image (price of $16 for buyer).

Let’s start with a starting small contributor which sells 100 images per year. If he is in level 1 in the old system, he will sell 92 images per $0.25, 6.5 On Demand images at $1.88 and 1.5 S&O images at $3.2. That is approx. $39 a year.

What about the new system? We do not know how much each type of subscriptions Shutterstock sells, so let’s assume the following situation: 5 % for 10-image, 15 % for 50-image, 45 % for 350 image and 35 % for 750 image subscription. The number can be totally different in real life but it was heard that 350-images version is the most popular. So let’s stick with this assumption. It means that the average subscription is worth $0.147 for level 1 and $0.3 for level 6. Much worse than $0.38 for current highest level. In the new system, we would have 92 images per $0.147, 6.5 images per $1.42 (average between $1.37 and $1.47 for OD) and 1.5 images per $2.4 (15 % of 16). That makes $26.4 a year. So, we can expect 32-33 % drop. Now, you understand the metric which I have used. Therefore, it does not make sense to describe everything in words. Let’s look at a small table.

Sold images per yearOld 1Old 2Old 3Old 4NewChange
100$39$52$57$60$26-33 % (vs. Old 1)
400$159$209$228$241$135-35 % (vs. Old 2)
1500$595$783$855$903$642-25 % (vs Old 3)
5000$1983$2612$2850$3010$2535-16 % (vs Old 4)
20000$7933$10448$11401$12042$11088-8 % (vs Old 4)
50000$19833$26120$28504$30105$29560-2 % (vs Old 4)
Differences in commissions (Note: The results in old system do not reflect advances in the tiers – It assumes the contributor will keep his level for the whole year as the “change” column compares the tier which will not change during the year – The third tier has a range of $7000, therefore $855/year will probably not change the tier – The numbers should be higher with larger amount of sold images in fact. – The new system is computed with the progression from the Tier 1 in all cases just like it would be from January 1.)

As you can see, if the assumption of the subscription distribution is correct, the small contributors will probably experience around 33% drop in earnings. If the contributor is good enough and is in the third level in current system (probably in the 4th level in the new one), 25% drop can be expected. Even if the contributor is able to sell 20000 images per year, he will probably earn 8 % less. According to my computations, only contributors which are able to sell 200.000+ images, may benefit from the new system. Nevertheless, if there is a higher number of 750-images subscriptions than I was expecting, there may not be even be possibility to earn more than today. In the worse case scenario (only 750-images subscriptions are sold), it would change from the range -2 % to -35 % to the range -30 % to -49 %.

We will see what the distribution of subscription is in June. The new analysis will be carried out with these numbers.