If imitation is indeed flattery, then Shutterstock, which offers a vast library of downloadable digital images, should have a healthy ego. But because the six-year-old company’s business model has spawned a number of imitators, its CFO and president, Adam Riggs, is focused largely on how to grow the business amid all the competition.
Shutterstock gets its content through crowdsourcing — that is, photographers and videographers are licensed to upload their photos or footage to the company’s Website and receive royalties from the company when customers download the images. Most of Shutterstock’s customers pay either a single monthly subscription fee to use 25 images per day or a lower annual fee for on-demand access to up to 60 images anytime during the year. They don’t have to pay royalties as they would if they negotiated a customized set of rights to use specific image, another common industry practice.
Neither crowdsourcing nor the subscription sales model — as opposed to a payment method by which customers buy credits to spend on one-off transactions based on the size and type of image — was unique to the stock-image industry when Shutterstock got started in 2003. But Riggs says that as far as he knows, the company was the first to package those two elements.
He claims Shutterstock is now the number-three player in the segment, after Getty Images and Corbis Images, though the privately held company keeps its financial results under wraps. Shutterstock currently has more than 8 million images in its library and adds 75,000 to 100,000 new images per month.
Although the company is based in New York, Riggs and his family moved to Germany last summer in a quest for new business. Following is an edited version of CFO’s recent interview with Riggs.
Why did you move to Germany? Since all of your business is electronic, what does location have to do with it?
We decided early on to internationalize the business, which is something the Web really lends itself to. What I’m [in Germany] to do is investigate how to increase our footprint in Europe, where people are amenable to online transactions but less so than Americans are. So I meet with the media, attorneys, accountants, and others to talk about the different options we might have for growing that footprint.
We’re making a lot of progress. We have customers in about 150 countries, and our European business is substantial, based just on a translated Website, euro pricing, and a foreign-language customer-service experience. But those things can only take you so far. There are other ways to increase our presence in Europe, including opening an office there, though that is not inevitable.
With so many competitors in your field and the Web affording easy access to images, people don’t really want to pay a lot for them anymore. Do you worry about the long-term viability of your business?
You mean, are we helping to accelerate a race to the bottom on pricing so that eventually everything will be free? I don’t see it that way. You have to pay [the image submitters] enough to incentivize them to work. It’s true that customers don’t want to pay a lot, but we feel we have found a good balance between our royalty schedule and our pricing.