Getty Images’ CEO Jonathan Klein.
The New York Times is reporting this morning that Getty Images has been sold to private equity firm Hellman & Friedman for $2.4 billion.
Thats a lot of clams and represents a 55 percent premium over the company’s share price on January 18th. Good for Mark Getty and Jonathan Klein, Getty’s Chairman and CEO.
Personally I thought that Getty would have more trouble than this selling itself. While the company is undoubtedly a cash cow today, competition in the stock photography business (especially from the newly emerging “advanced amateur”) is bound to significantly cut profit in the future.
Especially with a potential Microsoft buyout of Yahoo, this could accelerate the advanced amateur as a competitor. Microsoft founder Bill Gates owns 100% of Getty’s number one competitor Corbis and if Gates/Microsoft could broker a deal between Yahoo’s Flickr and Corbis, this could represent a whole new wave of stock photography.
Increasingly amateurs are encroaching on this territory previously only accessible to photo Pros. To see the type of thing that I’m talking about check out this photo posted by my friend Daniel Krieger yesterday about selling a photo to the Wall Street Journal for $250.
While these types of “one off” transactions are happening all over the place in the world of stock photography today (and eroding some of Getty’s market clout), if Corbis and Flickr could somehow unite, this could create far more competition for Getty than a bunch of old guys sitting around a board table of some private equity firm might think — no matter what today’s cash flows at Getty look like.
I was recently asked on behalf of San Pellegrino for permission to use this photo on their web site.
No fee was offered.
I agreed. Several other Flickr members did as well.
I liked the fact that they were doing something more interesting than going to the same old staid sources of media.
Here’s a screen shot.
Credit was given to everyone.
I’m pretty sure Getty owns iStockPhoto. So they’re already tapping the advanced amateur market for photo sources. A Microsoft/Corbis/flickr collaboration, while having a large photo pool, still has a lot of catch-up in the vetting, marketing and distribution arenas.
I’m pretty sure Getty owns iStockPhoto. So they’re already tapping the advanced amateur market for photo sources.
Harley, and this is the myth that Getty would like you to believe. The fact of the matter is that Getty purchased what at the time represented the most real threat to their business in order to simply contain it in the microstock space where it presents little threat to their far, far, more lucrative traditional stock photography business.
iStockphoto pays photographers 20% of $1, $3, or $5 (roughly speaking) for photos. That means if you sell a photo like Daniel did you might be entitled to a buck at the most.
Daniel on the other hand sold his photo to the Wall Street Journal for $250. Getty probably would have charged them at least $500 for the same photo.
iStockphoto does not represent a true threat to the established stock photography business because the very best amateurs realize that the payouts are laughable.
The very best amateurs (many of them on Flickr already) have yet to see a true business model that allows them to compete on an even playing field with Getty.
Setting up iStockphoto to pay photographers 1/100th of what they pay their Pros is not really “tapping the advanced amateur market” as much as Getty would like to push this message.
Microsoft/Corbis/Flickr would have a potential library of imagery that would significantly eclipse Getty. If they did it smart and allowed amateurs equal footing to pros they could in fact surpass Getty in many areas of stock photography.
Getty will still hold it’s foothold in many important areas of stock photography. Celebrity photography, for example (Getty bought WireImage last year who specializes in this area). That is because this area of photography is oftentimes dependent on negotiated access to celebrities that is harder for amateurs to get.
But many of the more traditional areas of stock photography are ripe for the picking. By keeping payouts low at iStockphoto Getty contained the first major wave threat to their business model. A Flickr/Corbis competitor that paid amateurs fairly though would be much harder for them to contain.
I want another $250 for Thomas using my photo for his story 🙂
Interesting thoughts Thomas. Thanks for your reply.
A Flickr/Corbis competitor that paid amateurs fairly though would be much harder for them to contain.
I wonder if the marketplace would see a Flickr/Corbis offering as a competitor for the Getty products, allowing for Getty sized payments to their participants, or for the iStockphoto products, without much change to the photographers’ commissions. Would it be possible to reasonably position Flickr photos as a competitor to Getty?
I suppose time will tell.
Cheers.
TranceMist, what they were doing was being cheap a$$es and getting something for free from you that they should have been paying for. Your time, equipment, effort, knowledge and skill is certainly worth just as much as the pros who shoot photos to the big Stock houses. It doesn’t matter where the photos come from, they still have value. While you are free to give your work away for free, and depending on the use, I have no problem with that in principle, for a for-profit company to take advantage of amateur photographers like this is despicable, and for us to let it happen is what is killing the Stock Photography business. This type of activity drives down the value of our work to the point where it is no longer feasible for those attempting to make a living doing stock photography full time to do so.