SecProbe.io

June 8, 2012

Via E -Mail
Jonathan Oringer, Chief Executive Officer
Shutterstock, Inc.
60 Broad Street, 30th Floor
New York, NY 10004

Re: Shutterstock, Inc.
Registration Statement on Form S-1
Filed May 14, 2012
File No. 333 -181376

Dear Mr. Oringer:

We have reviewed your registration statement and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosu re.

Please respond to this letter by amending your registration statement and providing the
requested information.   If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments.

General

1. We will process your amendments without price ranges.  Since the price range you select
will affect disclosure in several sections of the filing, we will need sufficient time to
process your amendments once a price range is included and the material information
now appearing blank throughout the document has been provid ed.  The effect of the price
range on disclosure throughout the document may cause us to raise issues on areas not
previously commented on.

Prospectus Summary, page 1

2. Please revise to provide the basis of your assertions that you are an “industry -leading ”
global marketplace, have “one of the largest libraries of its kind,” and have “one of the
highest volumes of site traffic and commercial image downloads,” as described on pages

Jonathan Oringer
Shutterstock, Inc.
June 8 , 2012
Page 2

 1, 3, and 5, respectively.  Your current disclosure does not provide the appr opriate
context for these claims, nor do you clarify if the claims are based on your belief and you
have a reasonable basis for that belief.  Please provide us supporting documentation for
your claims.  You may submit supplemental materials to the staff pu rsuant to Rule 418(b)
of Regulation C.

The Offering, page 7

3. Please revise to clarify the options outstanding as of December 31, 2011 referred to on
page 7 are Value Appreciation Rights that will be converted to options upon the close of
your reorganiza tion to a Delaware corporation.

4. Please disclose in this section the final cash distribution payments to members of the LLC
as part of the reorganization.

Risk Factors

We face intense competition from a range of competitors …, page 14

5. We note that you generally do not have any exclusivity over digital imagery provided by
your contributors.  Please revise this risk factor or add a risk factor that discusses the
competition to acquire available content, or the risk that your contributors may freely
offer their images that they provide to you to other digital image content providers.  For
example, please discuss the risk that your competitors may offer higher royalty rates or
have a less stringent vetting process that may affect your ability to attract new content.

6. Please address whether there are low barriers of entry for competitors to enter the digital
imagery business.

Continuing expansion into international markets is important for our growth …, page 17

7. You state that as a U.S. company, you face restrictions imposed by OFAC on your ability
“to do business in certain specified foreign countries or with certain specified
organizations and individuals.”  OFAC administers certain U.S. economic sanctions
and/o r export control regulations concerning Cuba, Iran, Sudan, and Syria, the countries
currently designated by the State Department as state sponsors of terrorism.  Please
describe to us, to the best of your knowledge, understanding, and belief, the nature an d
extent of any past, current, and anticipated contacts with Cuba, Iran, Sudan, and Syria,
whether through direct or indirect arrangements, for the last three fiscal years and the
subsequent interim period.  Your response should describe any goods, service s, or fees
that you have provided into, or received from, the referenced countries, directly or
indirectly, and any agreements, arrangements, or other contacts you have had with the
governments of those countries or entities they own or control.

Jonathan Oringer
Shutterstock, Inc.
June 8 , 2012
Page 3

We cur rently have a material weakness in our internal control over financial reporting relating to
compliance with certain tax regulations…, page 30

8. Please revise here and other appropriate places in your prospectus to clarify the nature of
your tax compliance issues.  For example, it is unclear whether your tax compliance
issues involve a significant underpayment of tax liabilities or involve state sales tax,
federal corporate level tax, LLC tax issues that may no longer be relevant in future
periods, or intern ational tax issues.

Industry and Market Data, page 34

9. Please provide us supplemental copies of the reports or other source documentation that
you cite on page 34 from which market or other data is extracted.  To expedite our
review, please clearly mark  each source to highlight the applicable portion of the section
containing the statistic, and cross -reference it to the appropriate location in your
prospectus.

10. We note your statement “we have not independently verified any third -party information
and can not assure you of its accuracy or completeness.”  Please revise to either omit this
disclaimer or clarify to investors that you have a reasonable basis to believe the
information presented is accurate .

11. Please advise us whether any of the cited studies or market data information presented in
your prospectus were commission ed by you or on your behalf.

12. We note that your prospectus summary, management’s discussion and analysis, and
business sections cite a BCC Research report published in October 2008 estimating the
pre-shot commercial imagery and online marketplace segment will grow to $5.1 billion
and $2 billion, respectively, by 2013.  In light of the fact that it is now 2012, ple ase
advise us whether the industry and market data in the BCC Research report is the most
current information available and  whether actual market experience to date is consistent
with the 2008 projections of future growth .

Use of Proceeds, page 35

13. To the extent known, please provide more detail regarding the purposes for which the net
proceeds in this offering are intended to be used.  In this regard, consider disclosing the
amount of proceeds that you plan to implement your grow th strategies described  on page
5.  This section does not require disclosure of definitive plans and it is acceptable to
provide a quantitative discussion of preliminary plans.  See Item 504 of Regulation S -K.
We note on pages 5 and 60 you describe various growth strategies, bu t do not indicate if

Jonathan Oringer
Shutterstock, Inc.
June 8 , 2012
Page 4

 they will be funded via offering proceeds.

14. Please discuss the reasons for this offering if you do not disclose specific uses of offering
proceeds beyond general disclosures of working capital and other unspecified corporate
purposes.

Reorganization, page 36

15. Please  advise us whether the reorganization will occur prior to effectiveness .

16. Please advise us the estimated distributions, or a reasonable range, that will be paid to
LLC members prior to the reorganization, including the fin al payment.  We may have
further comment.

Unaudited Pro Forma Consolidated Financial Statements, page F -41

17. Please tell us why you consider the pro forma adjustments described in notes (b), (c) and
(i) on page 44 to be factually supportable.  See Rule 11 -02(b)(6) of Regulation S -X.  That
is, tell us what agreements are in place that require these events to occur upon
effectiveness of your reorganization.  As part of your response, please explain why these
transactions do not appear to be described in the reorganization paragraph on page 36.
Further, it does not appear that Note 11 to your consolidated financial statements
discloses that vesting of these shares that will  occur upon the reorganization.  Please
revise your disclosures accordingly.

18. Please clarify whether the compensation expense described in notes (g) and (h) on page
44 includes compensation expense that will be recognized upon effectiveness of your
reorganization, and the future compensation expense that will be recognized over the
remaini ng service period.  Please tell us your basis for including these adjustments in
your pro forma income statement, and how they comply with the requirements of Article
11 of Regulation S -X.  Please revise your disclosures accordingly.

19. Please clarify whether the shares included in pro forma EPS described in (ii) and (iii) on
page 45 include shares that will be issued upon effectiveness of your reorganization, and
shares associated with the future compensation expense that will be recogni zed over the
remaining service period.  To the extent the share adjustments are not consistent with the
compensation expense adjustments recognized in your pro forma income statement, as
discussed in comment 2 above, please explain these differences.  Please revise your
disclosures accordingly and provide the computations supporting the pro forma EPS.

Management’s Discussion and Analysis, page 43

Overview, page 43

Jonathan Oringer
Shutterstock, Inc.
June 8 , 2012
Page 5

20. Please revise to clarify what is meant by the percentages for retaining prior year revenues
from the same set of customers for 2009 -2011.  It is not clear how retaining revenues
from prior year amounts can exceed 100%.  You note in your disclosure that you retained
102% of 2011 revenues.

21. We note your disclosures that you have invested aggressiv ely in sales and marketing on
page 51.  On page 52, you indicate that On Demand is your fastest growing purchase
option, increasing your average revenue per download.  Please revise to clarify whether
your increased marketing efforts are focused on your On  Demand purchase option to
acquire new customers and whether you will eventually seek to convert those users to
subscribers.  While the On Demand purchase option may have higher revenues per
download, it is unclear whether the customer acquisition costs an d marketing costs
provide lower operating margins compared to your subscription model.  Please revise to
provide qualitative and quantitative discussions of how your different pricing models
affect your margins.

Results of Operations

Comparison of the Years Ended December 31, 2010 and December 31, 2011

Revenue, page 55

22. Tell us what consideration you gave to disclosing the total increase in your revenue
attributable to On Demand offerings and Subscription offerings and the impact of any
trends among wi th these offerings on future results of operations.  See Item 303(a)(3)(ii)
of Regulation S -K.

23. In view of the material increases in revenues over the three year periods provide
discussion of the how these increase for each of On Demand and Subscription of ferings
are due to price and volume changes.  See Item 303(a)(3)(iii) of Regulation S -K.

Costs and Expenses, page 55

24. Please revise to provide more quantitative details of your increase in advertising
expenditures of $12 million in 2011 from 2010.  We note the 89% growth in advertising
expenses appears to be a significant reason why your net income growth significantly
lagged your revenue growth in 2011, along with increased expenditures related to your
larger headcount.  Please also provide specific qu antitative headcount figures when
discussing the increased headcounts in this section.

Liquidity and Capital Resources, page 60

Jonathan Oringer
Shutterstock, Inc.
June 8 , 2012
Page 6

 25. Please revise to provide the most recent cash balance as practicable prior to the filing of
your next amendment and your ant icipated cash balance after your final distribution to
your LLC members as part of your reorganization to a Delaware corporation.  Please
confirm that your disclosure that you have sufficient cash and cash equivalents to meet
your anticipated needs for the  next 12 months refers to your most recent cash balance net
of the final LLC distribution and before offering proceeds.  If you will need offering
proceeds, for example, for your $5 million in anticipated capital expenditures in 2012
described on page 60, please revise this section to indicate so and your use of proceeds
section accordingly.

Critical Accounting Policies and Estimates

Equity -Based Compensation

Common Stock Valuations, page 65

26. We note your disclosures on page 66 that your board of directo rs approved grants with
exercise prices that took into account the fair value of your common stock as determined
by recent third party valuations, as well as other factors such as growth in customer base
and revenue.  Tell us why you did not also consider these other factors in determining the
fair value of your common stock as of each grant date.  That is, tell us why the fair value
of your common stock is not considered to be equal to the exercise price on each grant
date.  We note your disclosure that you intended grant exercise prices to be not less than
fair value.

27. Please tell us whether you considered the probabilities as of each valuation date of the
company: 1) completing an initial public offering, 2) complet ing a sale or merger, 3)
completing a dissolution or liquidation, and 4) continuing to operate as a private entity.
If you did consider these probabilities, please disclose the weighting you assigned to each
scenario as of each valuation date. If you did not consider these probabilities, please tell
us why.  Please revise your disclosures accordingly.

28. Please disclose the discount rates used, and any discounts for non -marketability used as
of each valuation date as well as any other material quantitative assumptions used in your
valuations.

Business, page 72

29. On page 74, you disclose that small business advertising on online digital media will
increase from $5.4 billion in 2010 to $16.6 billion in 2015.  Please revise to clarify that
only a small percentage of these projected advertising dollars will represent amounts
spent on your products, digital imagery.

Jonathan Oringer
Shutterstock, Inc.
June 8 , 2012
Page 7

 30. Please revise to discuss more specifically  your sales and marketing activities for media
agencies and large enterprises, which you briefly de scribe on page 80.  In particular,
describe your current direct sales force for these types of customers and your plans to
expand your direct sales force.  We note your disclosure on page 85 focuses more on
inbound sales and customer service representative s and general marketing initiatives.

31. Please revise to clarify whether your contributors may revoke your licenses and remove
their digital images from your network.

32. We note your disclosure on pages 15 and 85 that you maintain insurance to cover the
$10,000 in indemnification benefits you provide to each of your customers for
intellectual property disputes involving digital images sold on your network.  Please
revise to provide more details of your insurance arrangements, including policy limits
and a des cription of the number and extent of your customer claims for indemnification .

Director Compensation, page 94

33. Please revise to clarify whether your have awarded any Value Appreciation Rights to
your directors subsequent to December 31, 2011.

Execut ive Compensation, page 95

34. Please clarify whether you have any compensation agreements with your named
executive officers, as you briefly describe non -competition, non -solicitation and propriety
information, and invention assignment agreements without any mention of compensation
arrangements on page 97.  Further, you briefly reference employment agreements on
pages F -23 and II -2.  Please file the