Shutterstock pictures Canada as place to grow
N.Y.-based photo repository looks north for future
T ORON T O • Shutterstock Inc. is turning to Canada to help reinvent itself.
The New York-based company, which rose to prominence last decade by amassing a vault of stock photos just as advertising on Facebook, Google and Instagram exploded, is moving more into original content. It announced the purchase of Toronto-based Flashstock for US$50 million in June to offer companies access to photographers and videographers.
That builds on its US$32million purchase of Montreal- based PremiumBeat in 2015, which gave it access to a network of musicians composing new tunes.
“Brands want images that haven’t been used by other brands, brands want images with their product in the shot,” Jon Oringer, Shutterstock’s founder and CEO, said in a phone interview. The Flashstock acquisition allows the company to do that.
“That’s going to be a big deal and a game-changer for us and for those advertisers.”
Shutterstock needs a new wind. Profit is down and shares have lost 45 per cent in the past 12 months as growth slows. Being a repository for online advertisers isn’t enough anymore as competitors from legacy players Getty Images to startups like Toronto- based 500px push into that market. After four acquisitions since 2014, the company is trying to integrate its offerings, add its own editing tools, and meet rising demand for tailored advertising.
The purchase of Flashstock is the latest sign that Canada’s tech scene is in the midst of a renaissance.
Venture capital investment ballooned to $ 2.6 billion in 2016 from $ 900 million in 2010. Ottawa- based e- commerce software company Shopify Inc. just cracked US$10 billion in market value in the U. S. two years after its initial public offering. Amazon, Alphabet and Microsoft are opening large offices in Vancouver, Toronto and BlackBerry’s hometown of Waterloo.
Shutterstock, which is headquartered in the Empire State building, now employs almost 200 people in Canada. In Montreal, Shutterstock is expanding its office to take over the floor of a building on a lively commercial street.
The company, which was created by a father and son in 2005, now has 72 employees in Montreal and a network of 500 or so musicians around the world who compose pieces in formats that can easily be sliced up to fit in short videos. Staff curates the work so that customers can browse the catalogue by genre or mood, ranging from sensual to patriotic.
The model is hassle- free for advertisers or businesses who buy rights for a one-time fee. The system also suits the artists who are looking for an immediate income stream: they get paid upfront rather than when songs are downloaded.
For 28- year- old Dragos Chiriac, that liquidity enabled him to buy instruments and plane tickets for his Montreal band, Men I Trust, ahead of a China tour last year.
“It’s one of the things I like,” he said in an interview. “You can put that into the band, besides earning a living.”
Now PremiumBeat is seeking to expand in Asia, and recruiting composers that can write tunes such as K- pop, the Korean pop sound. So far, it operates on a separate website from Shutterstock, but Oringer says he eventually wants to bring all the offerings together onto one platform.
There’s lots of room to grow in the new markets the company is investing in, Oringer told analysts earlier this month after reporting earnings that missed estimates. The video and music unit, called Motion, for instance, has about three per cent of a market that’s is worth at least $2 billion, he said.
The market for custom content could be as large as $ 7 billion, Shutterstock estimates. In the days when mass-broadcast TV ads were the biggest form of advertising, marketers were limited to broad categories — sports lovers, lifestyle shows, news channels. But now, with Facebook and Google, marketers can narrow their audiences as much as they want. Flashstock, with its 300 clients, gives Shutterstock a foot in the door and can be easily scaled up, according to Oringer.
“We have 30,000 enterprise customers that we can bring to that product, and allow them to develop custom photography that is not stock photography,” he said.