On Tuesday, we hosted Shutterstock President and COO Thilo Semmelbauer and CFO Tim Bixby at William Blair’s 34th Annual Growth Stock Conference. Management’s tone was positive. We continue to believe Shutterstock has the potential to show sizable top- and bottom-line growth as a result of the growing demand for appropriately licensed commercial-grade digital images and its push into emerging content formats such as footage and music.
Conference Presentation and Breakout Highlights: The market for commercial stock images is expected to reach $6 billion in 2016, up from $4 billion in 2011, as stock image quality improves and takes share from commercial commissioned images. In addition, Shutterstock has introduced stock footage clips and recently stock music clips thus expanding its addressable revenue opportunity beyond the current $5 billion or so market for stock images.
The overall market for commercial images is expected to grow from $11 billion in 2011 to $13 billion in 2016. Within this market, there are two segments: stock images and commissioned images. The market for stock images is expected to grow from $4 billion in 2011 to $6 billion in 2016, faster than the overall market for commercial images, as better stock images replace the some of the need for commissioned images. Shutterstock believes revenue growth will continue to be driven by its efforts in localization, enterprise sales, and emerging content types. Shutterstock reported it is fully localized in three countries and is in the process of localizing 17 additional countries.
The localization process includes allowing customers to use their native language on the website, returning local and relevant content, and marketing and direct selling on a local basis. There are more than 130 countries that Shutterstock generates revenue from but has not yet begun the localization process. Revenue from enterprise accounts grew 100% year-overyear in the first quarter and now represents about 15% of revenue. Shutterstock continues to use a land and expand strategy to increase its penetration among large enterprises. It already has broad coverage of enterprises as more than 70% of Fortune 500 companies have at least one user account. It plans to continue to leverage its direct sales team to gain wallet share at these enterprises.