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Written by Ron Rovtar, Managing Editor, the Stock Asylum
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Thursday, 28 February 2008 |
 In announcing this week that it will be acquired by a private equity firm, Getty Images essentially confirmed what everyone in stock photography knew: the world's largest image distributor needs a fresh start.
It is not that the company has fallen on hard times. Getty Images made $126 million in net income last year. But the company made $130 million the previous year. The decline highlighted a disturbing trend in Getty's core creative stills business, which has struggled for some time.
So far, the company has blamed the creative stills problem on factors outside its control. The growth of paid search ads that use no images and a shift of advertising dollars to the internet are two reasons frequently mentioned. Many images used on the internet are inexpensive low resolution royalty-free photos. Sometimes, these web uses replace printed applications that command higher image licensing fees.
But the reality is not quite this simple. Even as Getty Images' creative stills business stagnates, a number of other stock photo companies report growth. Competition, including some from Getty's own micropayment stock division, has taken a toll. Image buyers and photographers seem much more open to doing business with other distributors.
The evidence suggests that some of Getty's problems really are partly or entirely under the company's control.
By failing to foster good personal and financial relationships with contributors, by aiding and abetting the creation of industry-wide pricing that makes little sense, and by acting as if technology could substitute for a good sales effort, Getty Images has systematically squeezed the vitality out of its most lucrative product.
So, removing the Getty Images from under the microscope of Wall Street may be an important move. But, it will be validated only if the new Getty Images can make some hard decisions that will be costly in the short run, but which could put a new, more solid foundation under this company.
Here are three unsolicited (possibly unwanted) suggestions for the new Getty Images:
Continue reading Unsolicited Advice . . .at the Stock Asylum (SUBSCRIPTION REQUIRED)
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