If anything, Getty Image announcement that they now offer free embed-able images has put a huge road block in Shutterstock growth path. Ever since the announcement a month ago,  Shutterstock has taken a beating on the stock market. From a high of $100, it has now fell below $60, lower than it was before their Q4 earnings call.

Shutterstock shows signs of decline
Shutterstock shows signs of decline

Even while ceo and founder Jon Oringer claimed that it would not affect Shutterstock earnings, investors do not seem so sure.

Where does the truth lie ? Somewhere in the middle, as usual. Oringer’s claim is that Getty’s free offering will be used mostly by bloggers and not by Shutterstock commercial clients.

Why ? Because if you are using an image to sell a product or service, the last thing you need is someone else sticking an ad on it, Getty’s ultimate plan.  However, Shutterstock is used by bloggers too, and a lot of them, who see free as a much better value than a few dollars. So while the corporate and enterprise world will shy away from the Getty give-away, others, more editorial,  will embrace it easily. And the microstock company will take a hit.

How much ? It will depend on how the Getty service evolves. For example, if Getty makes it easier and less cumbersome to embed an image, usage will go up quickly. Also, if Getty decides to offer publishers of their free offering a revenue cut- a la Adwords- for every ad displayed, it will certainly create a strong incentive. Think about it, instead of paying to use an image, you get paid. That is a game changer.

For now, Shutterstock needs to quickly figure out a counter move before it’s stock value falls below it’s initial IPO offering. Otherwise, the decade old company might have to resort to a Getty strategy and take the company private.

Author: Paul Melcher

Paul Melcher is the founder of Kaptur and Managing Director of Melcher System, a consultancy for visual technology firms. He is an entrepreneur, advisor, and consultant with a rich background in visual tech, content licensing, business strategy, and technology with more than 20 years experience in developing world-renowned photo-based companies with already two successful exits.

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