Photography: Picture Pac-Men
campaignlive.co.uk, Friday, 29 July 2005 12:00AM
How Getty Images and Corbis - two of the biggest names in stock images - swallowed their competition. Glen Mutel writes.
If you work in the communications industry, you'll probably be familiar with Getty Images and Corbis. But even if you haven't heard of these companies, you'll almost certainly have encountered their work. This is true of anyone who's ever bought a poster, watched a TV show, read a newspaper or seen an ad.
From Apple's "think different" ad, to coverage of the Athens Olympics and the credits of Sex and the City, the work of Getty Images and Corbis permeates our lives. Between them, they've got the stock photography industry sewn up, to the extent that, if you need to get hold of an image, it's hard to avoid them.
Although trustworthy industry statistics are hard to come by, Jim Pickerell, the publisher of the industry newsletter Selling Stock, predicts that come the end of 2005, Getty and Corbis will claim respective revenues of $750 million and $230 million, in an industry worth $1.6 million globally.
He adds that for non-editorial images, the two companies have a combined 75 per cent share of the global stock photography market. This is likely to rise, as both outfits are acquisitive and have deep pockets.
Getty Images was the brainchild of Mark Getty, the grandson of the former richest man in the world, John Paul Getty. After an early career in banking, Getty went into business in 1993 with Jonathan Klein, backed by his family's billions. Two years later, the company bought Tony Stone Images - the first of almost 50 acquisitions that have turned Getty Images into a company boasting operating profits of $53.5 million.
Out of their Camden office, Getty and Klein have brought professionalism to an industry once populated by small shops run by photographic enthusiasts blind to the potential of the digital age.
Getty Images saw that by harnessing the internet, it could speed up the image-purchasing process, reducing the need for mail order and catalogues, while at the same time reducing its cost base. Today, more than five million of Getty's 70 million images are available via its flagship website.
However, Getty's business has evolved beyond stock imagery. It is in the process of growing its assignment photography service, where regist-ered overseas photographers armed with a brief are sent off to carry out tricky foreign assignments.
Getty is also increasingly reliant on relationships with image partners, which help keep costs low and profits high. The company has 53 image partners, who Pickerell believes will provide 40 to 45 per cent of the non-editorial photos on gettyimages.com in 2005, up from 25 per cent in 2004.
In 2000, Getty momentarily stopped spending and focused on integrating its businesses and reducing its costs. Recently, though, a leaner, more efficient Getty has rediscovered the joys of acquisition. In April, it bought Digital Vision, which boasted the world's third-largest collection of royalty-free images. And its spending is unlikely to stop there.
"If there are businesses to be acquired that add to what we offer and make strategic sense for us, we will certainly look at them," Deb Trevino, Getty's vice-president of communications, explains.
Getty's main rival, Corbis, has also been dipping into its kitty. Earlier this year, it splashed out $41 million on Germany's Zefa visual media group, which specialises in commercial photography. The acquisition took Corbis' revenues above the $200 million mark. However, unlike Getty, Corbis has only recently become profitable.
The company was founded in 1989 by the Microsoft entrepreneur Bill Gates.
Its first major purchase was in 1995, when it bought the Bettmann Archive - a collection comprising millions of historical photographs, which Corbis keeps in cold storage beneath a mountain in Pennsylvania.
Since then, Corbis has also taken steps to expand its business beyond stock imagery. Like Getty, it has moved into stock film footage, which it licenses for use in movies and advertising.
And, in 2002, Corbis acquired Second Line Search, a company which specialises in managing and securing image rights. This side of the business is now a key part of Corbis' growth strategy and the senior vice-president, commercial image licensing, Jennifer Hurshell, believes this focus has enabled Corbis to develop a service that differentiates it from its portal-based rival.
"We've taken a very big commitment towards building a service company, whereas I would say Getty, by its own definition, is focused on being a self-service environment," she says.
"We make sure we talk to people directly - most clients have no idea where even to begin to find the management of a given property."
Like many companies that quickly reach a position of market dominance through acquisition, Getty and Corbis have their critics. Getty has been criticised for putting pressure on suppliers to keep their prices low.
"Getty is looked on as a bully," Pickerell explains. "It's got many image partners, but it does little to keep them happy."
Meanwhile, Corbis' litigious nature has earned it a reputation for hard business. The company has developed a software program that searches the internet, compiling a list of infringements on its copyright. Corbis then sues the guilty parties.
"The reason there has been some litigious activity is partly to protect the copyright of the artist, ie. the photo-grapher, but it's also to protect the right of the client, who is making an investment," Hurshell explains.
Today, the ad industry presents Corbis and Getty with a greater opportunity than ever before. In recent years, the two companies have boosted the size and sophistication of their libraries, and once-suspicious creatives are beginning to take notice.
Many have realised how quick and easy the use of stock images has become. More importantly, stock photography can help creative departments satisfy procurement-led clients, particularly during pitches.
M&C Saatchi's head of art, Tiger Savage, explains: "With clients today, there's no leap of faith - they want to see the finished work during the pitch, especially when it comes to print.
"But companies such as Getty and Corbis have some great-quality stuff and it's improving. We've just done one piece that's partly made up of stock shots and most people would have no idea that the work wasn't shot with that particular job in mind."
But the rise of Getty and Corbis is also a concern for some. With both still spending, the market is approaching duopoly status and one worry is that Getty and Corbis will use their dominant positions to hike up prices.
Yet this process has already begun, particularly for royalty-free images.
Pickerell points out that prices had been kept artificially low for a long time and that the recent increases were both long overdue and necessary for the health of smaller suppliers.
But a greater concern is that the big two will leave less room for smaller shops to flourish as they themselves continue to grow. This would be a particular tragedy for those art directors who claim that Getty and Corbis will never be able to meet all their photo-graphy needs.
McCann Erickson's executive head of art, Mark Reddy, explains: "Getty and Corbis have quite a diversity, but I would say that the high-end photo-graphers are not represented.
"For example, I'm currently shooting a campaign for Alzheimer's disease with Nadav Kandar (arguably the world's best commercial photographer) and I'm pretty certain he would never want to be represented by Getty. Yet his work is iconic and has massive stand out. That's what I want to buy into. If it doesn't represent the best, then in a way its service is not a sufficiently good tool for a commissioning art director."
Bartle Bogle Hegarty's head of art buying, Cliff Lewis, adds: "I still think there is a real gap between some of the more interesting niche players who specialise in, say, youth culture or sport, and the bigger guys in terms of the quality of the imagery. The smaller outfits have more focus and they're much edgier."
But despite the dominance of Corbis and Getty, the image industry is not as uncompetitive as it appears. There are alternatives to the big two, by far the largest of which is JupiterMedia, which boasts the world's largest gallery of royalty-free images.
Jupiter has recently been just as acquisitive as its big rivals. In February in bought Creatas, the parent com-pany of Dynamic Graphics, which specialises in both royalty-free and rights-managed stock images.
"That enabled us to get into the upper market," Alan Meckler, Jupiter's chairman and chief executive, explains. "Dynamic Graphics had developed a $40 million-a-year-plus business in that area and buying it has enabled us to compete with Corbis and Getty for any account."
Meckler believes it was Jupiter's acquisition spree that motivated Corbis and Getty to start spending again.
Pickerell agrees: "I think Getty is far more worried about Jupiter than it is about Corbis, because Jupiter is so focused on the advertising side of the business."
Meanwhile, these three are about to be joined by Adobe, which has a sizeable collection of royalty-free images and a strong reputation among the graphic design community.
Then there are portals such as Alamy - which distributes unedited and untagged photos and has a library of more than three million images - and Imagestate, which recently signed a deal to be the distribution partner for the publisher Hachette Filipacchi.
The Imagestate group marketing director, Harry Mole, believes companies like his are often helped, not hindered, by their size. "The main point of difference is the quality of service," he explains. "We want to make people feel important and you just don't get that at the bigger companies, which are essentially just call centres."
The stock image industry has developed rapidly over the past decade, and that speed of change shows no signs of slowing. By the time this article prints, there's a good chance that either Getty, Corbis or even JupiterMedia may have reduced the number of operators in the market even further.
But the presence of outfits such as Jupiter, and new entrants such as Adobe, shows that the industry is still competitive and suggests that it's not quite time to panic yet.
GETTY IMAGES 1993: Mark Getty goes into business with Jonathan Klein with family backing 1995: Getty Images is founded. Acquires Tony Stone Images (stock photography) April 1996: Acquires Hulton Archive (rare archival photography) July 1996: Lists on the Nasdaq as GETY 2001: Launches www.gettyimages.com 2002: Lists on the New York Stock Exchange as GYI. Launches Media Management Services (tool to help companies to use their global image assets efficiently) March 2003: Launches Photo Assignment Services on gettyimages.com, enabling customers to hire commercial photographers to shoot bespoke material July 2004: Forms partnerships with 12 creative image partners April 2005: Acquires Digital Vision (royalty-free photography) CORBIS 1994: Corbis licensing business founded 1995: Acquires The Bettmann Archive and The Starlight Collection (space, science and technology images) 1997: Acquires the LGI Photo Agency (event celebrity photography) and launches Corbis' first searchable image website 1998: Acquires Digital Stock (royalty-free photography), Westlight (commercial photography) and Outline (celebrity portraiture) 1999: Acquires Sygma (news features and photo-journalism) 2000: Acquires Saba Press (photojournalism), TempSport (sports photography), Sharpshooters (commercial photography) and The Stock Market (commercial photography) 2001: Acquires Sekani (motion footage). Opens offices inTokyo and Hong Kong 2005: Opens offices in Spain, Canada, and China and acquires Zefa (commercial photography)
This article was first published on campaignlive.co.uk
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