Shutterstock

Shutterstock Investor Report February 2023

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01 Shutterstock At A Glance
Shutterstock Intro Video
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02 The Creatives
Expanding Total Addressable Market
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03 Go To Market
eCommerce Channel
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04 Financial Performance
Shutterstock By The Numbers
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05 Appendix
Financial Statements and Non-GAAP Information
- See all charts used in this presentation
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A leading global creative platform offering full-service solutions, high-quality content, and creative workflow solutions for brands, businesses and media companies.

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Freshest content

600M+ images
45M+ video clips
Thousands of music tracks

Innovation-driven

Advanced search
Computer Vision
Leading creative platform

Proven performance

Founded 2003
NYSE listed: 2012
Consistent revenue growth and strong profitability

Worry-free licensing

Royalty-free licenses
Rigorous content review process

Shutterstock's Growth Pillars

Investment Highlights

Expanding TAM with Multiple Industry Tailwinds
Evolving to a Creative Platform Leveraging Content, Data and Workflow Applications
Growing a Powerful Subscription Led Business Model
Diversified Across eCommerce, Enterprise and API Channels
Shareholder Returns Driven by Revenue Growth, Margin Expansion, Capital Return and M&A

Expanding Total Addressable Market

Total Addressable Market

Stock Imagery

$4.6BN +5.2%
Music

$1.4BN +6.9%
Video

$0.7BN +6.9%
Creative Software Tools

$9.1BN +8.4%

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The Casual Creative Market Opportunity

While professional creatives have always been a core source of demand for Shutterstock, the Casual Creative represents an
increasingly important growth driver.

Proliferation of easy-to-use creative tools is enabling the growth of the casual creative market.
Shutterstock's global creative platform, Creative Flow, includes the scale and embedded relationships with leading social media platforms enables
our customers to generate high quality creative work, allowing us to capitalize on this emerging opportunity.
Increasing prevalence in the use of stock images, video and music in social media.

Source:

Stock Imagery, music, and video 2023 market size and 2023 market growth estimates based on 2022 Technavio Global Stock Images, Video and Music Market reports. Creative software tools 2023 market size and 2023 market growth estimates based on Statista Creative Software - Worldwide Market Forecast report

Industry Tailwinds

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Digital advertising

Worldwide digital ad spending is expected to grow by 10.5% in 2023 to $627 billion. Digital will continue to account for approximately two-thirds of total media ad spending.
3D & Metaverse

3D content is expected to be an important ingredient in the metaverse, across use cases such as gaming, social networks and Ecommerce. The total addressable market for the metaverse is estimated to reach $800 billion by 2024 and is expected to incorporate virtual reality, augmented reality and other technologies.
Video on Demand

The global video on demand market is expected to reach over $158 billion by 2027, growing at a 5-year CAGR of 9.1%.
Website Proliferation

The growth in the number of organizations, many of which need a digital presence, will drive website proliferation. There are more than 30 million small businesses in the United States alone.
Social Media

Advertisers rely on various social media platforms to amplify their reach. Individual creators in the creator economy, powered by over 50 million independent content creators, curators, influencers, bloggers and videographers, also rely on social media. Ad spending in the social media advertising segment is expected to reach $385 billion by 2027, growing at a 5-year CAGR of 9.4%.

Source: Digital advertising data obtained from eMarketer. 3D & Metaverse data obtained from Bloomberg Intelligence. Video on demand data obtained from Statista. Website proliferation data obtained from advocacy.sba.gov. Social media data obtained from SignalFire and Statista.

Our Target Customers

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Use Cases for Stock Content

Utilization of stock content extends across a diverse set of media types, as follows:

Images
Video
Music

Source: Shutterstock Market Tracker, Q4 2020.

Evolving to a Subscription Business

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Global Marketplace Network Effect

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Global Marketplace Network Effect

Shutterstock has over 2.3 million contributors who provide images, footage, music and 3D content to our library.
Our contributor website and mobile application operate in 21 languages and contributors can register and upload content directly within the mobile application.
All submitted content is reviewed by AI technology and human experts to ensure the highest quality, integrity and licensability.
Growing collection of over 600 million images and over 45 million footage clips.

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eCommerce Channel

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Self-service sales channel

Represents over 60% of Shutterstock’s business
>30 million monthly unique visitors over LTM period

Target customers including marketers, creative professionals and casual creatives
Use cases range from digital marketing and website creation to film & TV and metaverse applications
Continuous innovation drives differentiation

Leading-edge AI-driven search capabilities, predictive insights and workflow applications
Variety of plans for royalty free content licensing, including flexible multi-asset subscriptions
Enhanced licenses available, permitting more expansive use cases and greater legal indemnification limits
Emphasis on localization and personalization

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Enterprise Channel

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- Shutterstock’s global salesforce delivers strategic content solutions on a custom basis to Enterprise customers
- Enterprise customers include global advertising agency holding companies, smaller agencies, large corporations, SMBs and media & entertainment companies
- Strategic solutions include:

Ecosystem of API Partners

Embedding our content, technology, and tools within 3rd party applications, such as ad builders, social media platforms, Digital Asset Managers, and other Marketing Technologies

API Ecosystem

Streamlining access to Shutterstock within the platforms customers use every day.
Helping platform partners create more engaging customer experiences, leading to increased revenue, retention, and time on our platform.
Making it as easy as possible to find the right content, in the right place, at the right time.
Driving value beyond content through products like our Editor and Smart content recommendations.

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Unique First Party Data Powering Generative AI, Computer Vision, Predictive Performance and Content Insights

Proprietary Data Products include:

Generative AI capabilities that will allow Shutterstock’s customers to generate unique images based on keyword inputs
Shutterstock’s Computer Vision technology trains and supports customers’ AI models, by leveraging the underlying metadata of our existing content library
Predictive performance technology uses AI to analyze the strengths and weaknesses of individual content assets for a customers’ marketing objective or target audience
Global trends around content preferences pertaining to consumer intent and culture (Creative Trends 2022)

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Note: Graphic shows actual activity from April 22nd, 2021 at 11:26 AM.

Generative AI

Shutterstock is Powering, Developing, and Commercializing the Future of AI, enabling Creativity at the Speed of Your Imagination.

How to use Shutterstock’s AI image generator

1
Imagine anything! Then type it into the search bar. Click Generate.
2
Shutterstock.AI generates a few versions for you to choose from.
3
Edit the image in Create, if you like. Or just license and download.

Futuristic city with retro style flying cars in the sky
professional jewelry photoshoot, floral decor
Portrait of a mongolian woman, high detail
Ceramic kitchen cups and plates and bowls
illustration of a child in a hot hair balloon

Commercially Cleared Images Derived from Properly Licensed Content

Training data is ethically sourced from Shutterstock contributors
Generative AI Images are cleared for commercial use
Contributors are compensated through Shutterstock’s Contributor Fund

Computer Vision

Shutterstock’s Computer Vision Offering Trains AI Models with our Vast Content Library

Marquee partnerships with leading technology platforms
Large multi-year contracts, with profitability in-line with overall business
Commitment to compensate our contributors through newly established Contributor Fund

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Diverse Use Cases

Healthcare
Autonomous Vehicles
Security & Safety Management
E-commerce & Retail
Content Moderation
Agriculture

Deeply Enriched Data Set Consisting of our Massive Content Library and Associated Metadata

Asset type
Usage (Commercial v. Editorial)
Description / Title
Keywords (30 on average)
Translated into 20+ languages
Custom Annotation for Specific Customer Needs
Property Releases
Model Releases
Location
Thematic Category
Contributor
File Format / Resolution

Predictive Performance

Recent Strategic Acquisitions

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Pond5 - acquisition of largest video-first content marketplace

Shutterstock acquired Pond5 on May 11, 2022
- World’s largest online marketplace for royalty-free video
- Further scales Shutterstock’s video business and expands Shutterstock’s editorial offering with unique and high-quality exclusive video content
- Complementary customer base with powerful relationships with the world’s largest media outlets, social media platforms, and OTT streaming companies

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Splash News - infusion of technology, customers and photographer network to Shutterstock Editorial’s Newsroom

Shutterstock acquired Splash News on May 28, 2022
- Splash is a leading entertainment news agency specializing in the procurement and distribution of celebrity and entertainment content
- Large contributor network of more than 4,000 photographers
- Extensive archive of over 27 million images
- Diverse and attractive customer base including E! News, People, Daily Mail, TMZ, Dow Jones, Reach and News UK
- Provides immediate scale and workflow enhancements to Shutterstock Editorial’s Newsroom business.

PicMonkey

Shutterstock acquired PicMonkey on September 3, 2021
- Complements Shutterstock's content subscriptions with professional-grade, easy-to-use design tools
- Key features of the PicMonkey tool includes photo editing, effects, touch-up tools, brand kits, cloud storage video, animations, and multi-page for creators, solopreneurs, social marketers, marketing professionals, pro designers and casual creatives
- Expands Shutterstock's audience reach and addressable market by extending into the large and growing market opportunity for creative software and design tools
- Recurring SaaS-based subscription revenue

With the acquisitions of Pattern89, Datasine and Shotzr, Shutterstock.AI will continue to rapidly develop its own predictive performance capabilities to help creatives and customers accomplish their goals by making more data-informed content decisions.

Pattern89

Pattern89 provides industry-level and custom insights for predictive performance at scale. Utilizing these insights allows marketers, agencies and creatives to make the right decisions -- down to colors, copy and even emojis -- without having to live A/B test. Pattern89's sophisticated workflow allows real time monitoring of campaign performance, as well as one-click optimization

Datasine

Datasine's AI provides the insights and acumen for campaign decision-making. Their team of data scientists and psychologists have created algorithms that analyze the creative elements of an ad better than humans. The company's artificial intelligence reviews past campaign performance of digital assets and provides recommendations for optimizing their performance.

Shotzr

Shotzr uses human responsiveness to imagery, applying insights to any image for predictive analysis to ensure customers select the right image for social media and digital campaigns that will resonate with audiences.

TurboSquid - democratizing 3D content worldwide

Shutterstock acquired TurboSquid on February 1, 2021
- Industry leader, with full suite of 3D content offerings, including:
  - TurboSquid - over one million assets in 3D marketplace
  - PixelSquid - content marketplace for 3D objects available via a 2D spinner
  - Kraken - SaaS-based digital asset management solution
- Extensive network of contributors who develop and sell 3D models
- Blue chip customer base including over half of the Fortune 100
- Diverse use cases spanning advertising & marketing, ecommerce, AR/VR, architecture, education, engineering, gaming and media
- Compelling strategic fit and meaningful revenue synergies with Shutterstock
- Expected to be immediately accretive to adjusted net income per diluted share and adjusted EBITDA