Shutterstock’s AI-Generated Content Raises Questions About Copyright and Quality
Shutterstock’s AI-generated content has become central to its business, though this has raised both copyright and quality questions. They announced back in October of 2021, that the company licensed its stock image library to OpenAI in a bid to get ahead of the generative AI wave. Part of the partnership was the addition of text-to-image generation to Shutterstock’s website earlier this year using a version of OpenAI’s Dall-E 2 tool.
This has led to concerns about obsoletion and indemnification. To address this, Shutterstock CFO Jarrod Yahes spoke to Redburn, according to the Finance Times. First, addressing the concerns of being replaced by AI technology, “The longer-term threat is that AI technology will completely eliminate the need for stock photos and steal Shutterstock’s customer base. So far Shutterstock has seen the reverse — the demand for licensing of its content is accelerating with technology companies seeking more data access and increasing their content budgets as the commercial uses for AI rise.”
This is seen with Shutterstock’s average deal size increased from $22k in 2020 to $310k in 2021 and $1.3mn in 2022, with approximately 4/5 of the value of AI contracts booked upfront. So while photographers may lose out on royalties due to competition from AI-generated content, the value of Shutterstock’s library lies in the volumes of sales it facilitates. This is reflected in its high 70% gross margin.
Shutterstock’s broad library of content with an integrated AI-generation tool provides its customers with a higher level of assurance that they will be able to find the content they need. The risk of churn from customers migrating to a competing AI-only tool seems unlikely, as no AI platform will be able to replicate the customer traffic and volume of sales offered by Shutterstock or Getty Images.
The next part is quite interesting. Yahes points to the need for relevant data to continually train AI. He said in part, “Training of AI models is not a finite process — to stay relevant the machine will require ongoing access to large volumes of fresh data.” This is true. In an important sense, these models will need to continually be fed new image data in order to stay relevant, so it’s not replacing the human element completely.
Then there is the question of copyright legal protections and risks associated with using AI-generated content. As most of us have seen over the last few months, with the exposition of AI in the market, copyright is a very grey legal area. For Jarrod Yahes, that legal grey area is where Shutterstock comes in. “Furthermore, we consider it unlikely that Shutterstock’s role as an aggregator of a broad range of content types with legal copyright protections could be easily replaced. Customers value the legal safety of using Shutterstock rather than a platform that might be ingesting images it has not correctly licensed.”
It seems that Shutterstock is very confident about going all in with AI. Earlier this week the company announced a partnership with Nvidia to develop an AI-powered 3D model generator. This doesn’t even touch on their work with Meta and LG in advancing AI-generated image, video, and music creation. It should be interesting to see where other stock imaging providers go, and if they’ll follow Shutterstock’s lead.
Originally posted on OpenDataScience.com
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