Not so surprisingly, Getty has announced that it’s putting itself on the block for a sale. Barbara Coffey, an influential analyst at Kaufman Brothers, is quoted in the NYT article:
“Getty Images continues to be a company in transition, adjusting from being the leading player in an oligopolistic market to being one of many players in a highly competitive market.”
It’s difficult to be a public company, where the motivation for running the business is hitting quarterly numbers. A public company is incentivized to create short-term gains, and creating longer term innovation is often difficult to operationalize because of the short-term pressures. Privatization has the promise of making them more agile and better operated — a definite need given the competition that they face.
Georges van Hoegaerden, a venture consultant, wrote in his personal blog:
“…the imaging markets consists of demi-cartels that produce ‘premium’ supply that does not meet the requirements of an ever growing and changing market of buyers. No longer is the size of the buyer’s market dictated by agencies nor is the new seller’s market defined by the old definition of pro-photographers. As a result sell side content does not find enough buyers and the only way to make money is to make sellers believe that if their work is good enough, it will sell…..nice promise. Out of desperation most photographers post their images on multiple websites to get maximum visibility, a true testament of inefficient market.”
He goes on to say:
“We don’t need another Amazon.com of the photography business but a real free-market in which YOU the photographer and buyer make decisions on what transactions you want to engage in. ”
I don’t completely agree with him because currently, the people with picture buying budgets have a fairly rigid method of buying (and his analogy with the music industry is only partially correct because historically the problem was distribution of physical media). They don’t want to deal with individual suppliers, they are used to extremely friendly terms, and often times, they request an invoice after usage. Such is the state of the industry.
Finally, Jon C. Ogg from 24/7 Wall St. writes that “Vast portions of the company’s business will fall prey to mass collaboration, and anyone with about $20,000 can build a similar wiki-model stock photo and copyright video and audio business.”
Ogg’s point is made. The Internet gives us the opportunity to build a storefront with relative ease, but he too casually dismisses the issues of building the critical mass needed for a self-sustaining business. The success of the business is still predicated on its ability to gain market share, and an Internet with 10,000 stock photo sites doesn’t “win.” The proof? His example of picturesandbox.com has failed to rise as the next great stock photo site on the web.
We can all agree on the need for a significant shift in the industry, and we believe it’s going to be the PhotoShelter Collection. Why? It’s an open, but edited platform where the majority of profits are directed towards the content creators. And on the buyer side, we can offer a wider range of content from a significantly larger base of photographers with the ease of purchase that buyers are accustomed to (i.e. they aren’t dealing with an individual photographer for a $100 image sale).
That said, Getty Images is filled with incredibly sharp people, and it will be interesting to see how a potential sale and privatization affects the landscape.