Corbis Corporation acquired Digital Stock Corporation in early February. We believe Digital Stock
is the world's second largest provider of royalty-free digital images.
At one point a few months ago Getty-Images was discussing the possible purchase of Digital Stock for around $25 to $30 million. We expect the Corbis purchase was in that ballpark.
"Today's acquisition represents an aggressive move by Corbis to broaden its content and customer
base to include
advertising, graphic design, corporate
communications, pre-press, publishing, multimedia and web site design markets."
Digital Stock becomes an operating division of Corbis' image licensing business and will maintain
its current operations
in Encinitas, CA.
"Corbis recognizes that there is a broad spectrum of both content and customers," said Leslie
Hughes, vice president and
managing director of Corbis
Images. Ms. Hughes recently joined Corbis from The Image Bank.
"With the acquisition of Digital Stock, Corbis is putting in place an important piece of the total product spectrum. By marrying our world-class image collection with our sophisticated technology, Corbis is uniquely positioned to provide digital solutions for visual content users across a wide range of needs, from royalty-free commercial offering for the corporate art director to unique works from major artists and museums for the publisher."
The move marks a major change in direction for Corbis.
The most significant part of this move is that Corbis, for the first time, has acquired imagery
that is likely to be of
interest to the advertising and
graphic design community. Up to now, Corbis has focused exclusively on the editorial and consumer
side of the business.
When acquiring content they
focused on shooters that had a specialty in editorial. When they found a photographer who had both
editorial imagery, the Corbis
editors usually totally ignored the best selling advertising images and went only for those that
Some Corbis photographers have expressed concern that Corbis may try to take images already placed
in the Corbis database
and put them on RF discs. We
think that concern is unfounded except in cases where Corbis totally owns the images. Their
contracts with photographers
do not allow such use. In
addition, the vast majority of imagery in the Corbis file is not of a type that would be of
interest to Digital Stock
The more interesting questions are:
- As a first step in acquiring content of interest to the Advertising and Graphic Design
community, why did Corbis
choose the RF route rather
than purchasing a traditional agency that focuses on "rights control"?
- Will Corbis start looking at some of the "Rights Control" agencies as possible acquisitions?
- Will Corbis make effective use of the DS client database to determine who is using images?
Will they finally
understand that the client base for
DS is totally different from the client base for their editorial images?
- Will Corbis focus on low end sales to advertising, or will they figure some way to market these
images to a higher
market at a better price?
- Will the fact that the two largest RF providers are now owned by companies that have an
interest in licensing "rights
controlled" uses alter the
pricing structures of RF? Will Corbis push the price up when they begin selling individual DS
images on-line? Currently,
the standard is $69.95 set
by PhotoDisc and $80 by Adobe. The Corbis prices and the Publishers Depot prices are much higher
with more limitations on
usage. If Corbis markets DS
images at its current "rights controlled" prices, and can do that with moderate success, then
Getty-Images and PhotoDisc
will have an interesting
- Will Getty feel so committed to their price structure that they are willing to leave $30 or $40
on the table every
time they make a sale? That
doesn't sound like a business plan stockholders would endorse. Even the higher prices we are
talking about are still well
below the average prices
charged by stock agencies for such usages. One would think that few clients would be discouraged
from buying RF images if
the price were $100 or $110
rather than $70.
If RF prices for individual on-line sales can be pushed up somewhat it could benefit all sellers.
Given the ownership of
these companies, I believe
such a strategy is within the realm of possibility. On the other hand, it is equally possible that
these companies will try to drive each other out of
the market with a "rush to bottom" on price. One of the most important things to watch relative
to this purchase is what happens to on-line pricing.
Every press release talks about Corbis' "great technology" but it sure isn't hassle-free compared
to other sites on the
At Corbis, to even look at images and see if they have anything of interest, you have to fill out a
credit application giving bank references and trade
references. This does not encourage people to look. Sure, this information may be necessary at
the point a customer is ready to buy, but not to look at thumbnails.
©1998 SELLING STOCK
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