GDI: New Publicly Traded Stock Photo Company

Posted on 9/22/2014 by Jim Pickerell | Printable Version | Comments (1)

At the International Photojournalism Festival in Perpignan earlier this month and in a later press announcement GDI Media Limited announced the aim to consolidate many smaller independent picture agencies into a single publicly traded company that will be traded on the AIM stock exchange in the UK.

Readers have asked whether this is something to embrace or avoid. As with many new ventures there are a number of issues to weigh, and the decisions are not easy. Here are a few things to consider.

Who will be running the show?

Charles Taylor will be Managing Director of GDI. Taylor founded Photoshot in 2001 and has acquired 16 other companies for Photoshot since then. The agencies acquired include: UPPA, NHPA, Retna, St*rstock, staystill, woodfall wild images, World Pictures, Bruce Coleman Photo Library, Oceans-Image, idols, lfi London Features, The Travel Library, Photos Horticultural, Red Cover and Construction Photography. Most of these agencies were relatively small in terms of gross revenue and it is believed that Photoshot’s combined gross revenue now is in the range of £2 million annually.

To get a better understanding of the offer I asked Mr. Taylor a series of questions.


JP - How many RM and RF are currently in your collection?

CT - Photoshot has 15 million images online. Mostly RM. However, the idea is that other agencies will participate and GDI will have many more images.

JP - I count only 6 Micro images. Since you want to build micro to an £80 million business annually it seems to me that you need to sign a well established microstock distributor to be part of your group. Are you contacting these people? Are any of them showing interest?

CT - We have never put much effort into microstock. We think that we could re-purpose a good number of Photoshot images to seed microstock content. Other agencies I have spoken to think that they can too. We have been approached by a few of the smaller ones who have offered content.

JP- Are you contemplating transitioning some of the existing RM and RF images to micro pricing? Do you have a strategy for convincing these people who have been licensing their images as RM all their life that the RM strategy is dying and they could probably earn more money if they license their images as microstock.

CT - See above. Many editorial agencies accept that a good number of the licenses they are already selling are around microstock prices. So it has been easier than I originally thought.

JP - It is my understanding that you are offering companies who agree to participate in the range of 1 share for every £1 of gross sales last year. Is that substantially true?

CT - Yes, that is correct. They must be at least break-even, have enough working capital to last a year, and cannot bring any debt. By the rules of the London Stock Exchange, the accountants to the issue have to certify a "Working capital report" which is designed to ensure that the business is sustainable and properly funded. Their time horizon is 18 months from listing.

JP - In addition individual creators will continue to receive their normal royalty share.

CT - That is correct.

JP - I also understand that you need at least 8,000,000 ordinary shares to be considered for listing on AIM. How many shares will Photoshot own?

CT - Every agency gets 1 share for every £1 of revenue. The denomination of the shares is £5.  Therefore, as Photoshot has sales of £2 million, it will get 400,000 shares. In the "first round", the company will sell 8 million shares without referring back to shareholders. Ideally, we want to place all beforehand. The stockbrokers are happy to list before all are sold. Any remaining balance from the first 8 million can be placed after listing but participants will be offered less favorable terms.

Shares are being offered to three classes of owners:
    1. Agencies that become wholly owned subsidiaries of GDI: £1 of shares for each £1 of revenue. 2. Agencies who appoint GDI as an agent get shares to 15% of the value of the revenue that they received in the past 12 months on the images that they let GDI license, in addition to royalties. I think that this is an amazing offer and every agency should do it. The only condition is that GDI has the first right of refusal to buy the shares if and when they want to sell their agency. The offer is only open to editorial agencies for the reasons I outlined. 3. Individuals are being offered shares at £5 per share but they MUST become a contributor. They get royalties as normal. They can offset royalties in the first year to acquire more shares to the extent of their initial investment.
GDI's sales will depend on who and how many participate. After placing of the first 8 million of shares, the directors will seek permission to keep offering shares to agents using a similar structure but on less favorable terms. GDI could easily become a decent sized, big even, editorial agency. We are getting very positive feedback and have had some formal sign-ups already for 2 above.

We are in discussions with some agencies on 1 above. We have started to test 3 and I have been pleasantly surprised not only by the percentage take up, but the also by the fact that the average value is much higher than the minimum of £250.  It is approaching an average of £2,000 per individual. By the end of this week I expect we take some big steps forward and be well beyond the "If" to "When" we will be done.

JP - You say, “The objective is to build a business with editorial sales of £20 million and a microstock business with sales of £80 million within a three to five year period.”
    1 – I believe that while some editorial uses will still be licensed on a rights managed basis, the bulk will be licensed through subscriptions. You make no distinction for more commercial, creative uses such as brochure, advertising, calendar, posters, etc. Do you include that in your £20 million editorial sales? 2 – Do those brochure, advertising, calendar and posters fall into the micro side of the business (which it seems to me is the way everything is likely to play out), or do you have some other way of dealing with this segment of the market?
CT - The approach that we are taking is around product type, at least in terms of offering equity participation. We aren't offering equity participation to RF or creative content agencies as I think that they are especially vulnerable to quality microstock images. So to that extent, we are splitting sales between editorial and microstock. In practice, editorial content can be used in commercial ways as you suggest, but we would count those sales as "editorial". We will of course represent RF and creative agencies. Their sales would be a separate class of revenue.

JP - I have heard from several photographers that they have had, are having, trouble getting paid the royalties they are owed. To some degree this is understandable because many of the brands you acquired such as Bruce Coleman, NHPA and Retna were in financial trouble when you took over and probably hadn’t been paying all the royalties owed up to that time. You had to dig yourself out of that problem.

CT - We have indeed inherited issues. We try to deal with them as quickly and as fairly as we can. It is our experience that most of the "noise" comes from small contributors who have few and often old images with us. And who still believe that prices should be as they were some time ago. It is difficult, I admit.

JP - Is anything being done similar to what the microstock people offer to let photographers see an online report that tells them exactly how much they have “on account” and to enable them to receive payment anytime they have a certain minimum amount in their account?

CT - Yes, we have that. I noticed that you were copied in on some correspondence with a photographer last week who unusually could not log on to our system. All our existing contributors can see every single sale in real time. I still don't understand why he couldn't.

JP - Do all the images in your collection have unique numbers and are those numbers always reported on the sales report?

CT - Correct.

JP - Are the gross license fees you report the gross the customer actually paid one of your distributors or are they the gross you received from the distributor? Is there any way to show the gross the distributor received?

CT - We show and split what we receive.

JP – It seems to me that search on Photoshot is much slower than on the other major brands. Is anything being done about that?

CT - We won't be using our technology in the long term. 2015 is planned as the big build year. The brokers are keen that there is a central GDI site from the get-go, so out of expediency we may have to re-badger Photoshot for the editorial site. We will also launch interim video and microstock sites using The Data Archive technology.

JP – Editorial shooters tend to upload all their similars and let the buyers do the editing. Creative shooter tend to edit more tightly and keyword more extensively so the customer who is looking for something more generic rather than just the latest breaking news has a chance to see a greater variety of subjects in 100 or 200 thumbnails than is possible when looking at an editorial collection. Getty solves this problem by keeping the Editorial and the Creative collections separate. Do you have a solution for this problem?

CT - The Photoshot site keeps things separate. The buyer can choose how to search. Editorial or creative or both. They can even select a collection.

JP - I understand that one of the goals of GDI is to reduce the number of distributors representing a given image and try to have only one distributor in each country. Is that right?

CT - Yes, we would like to consolidate distribution over time. It would be more accurate to say that we are aiming to concentrate by specialism. e.g one nature specialist per country, or one sports specialist. At least as far as editorial goes.

JP - Will they be distributors who take 40% or 50% off the top, or will they be GDI offices whose operation costs come out GDI normal percentage of the sale? One of the major problems with this industry is that there are too many middle-men taking a cut-of-a-cut before the image creator gets his share. Will your operation do anything about that?

CT - GDI will let agents keep 40%. If a sale is done by a GDI office, the supplier gets their normal cut. Ideally, we would like as many direct sales as possible.

JP – One thing that really appeals to me about your offer is that you are a former investment banker and have an understanding of how the markets work. It seems to me that there is a huge percentage of the wealthiest 1% that have more money than they know what to do with and they are willing to try almost anything that has a half decent story. They know nothing about the photo business, or its history, but they look at Getty and Shutterstock (both of which I think are greatly overvalued) and think the stock photo business has great potential.

CT - I have been in the business now 15 years. I love the business and also own an art photography magazine called Hotshoe ( I think that the photo market can offer good investment returns. Many of the operators are very nice people who aren't necessarily the most financially sophisticated. I think that the market has become as polarized as it is because those businesses who have more financially sophisticated people running them have really prospered. Perhaps prospered too much, leading to possible overvalution. I think that this polarity between big and small; resourced and under-resourced is GDI's opportunity. There is nothing wrong with being a respectable number 3 or number 4.

JP - Meanwhile, the people who have been the business for a while know that it is in decline and they are pretty sure that decline will continue. They want out, but no one will give them much of anything for their businesses. By putting a group of these marginal suppliers together, and spinning a good story, you may be able to find people who will invest in the future hope and those with the existing businesses may be able to sell their shares for at least something, even if it isn’t all that they once hoped it would be.

CT - I think that GDI is a real opportunity for owners of existing businesses to monetize their assets. I think that we smaller guys will be stronger and more durable together. I think that we can further benefit by really going for the microstock model at the same time. Finally, we really want individuals to participate. They have the chance to get in at ground zero. In the past, the "clever guys" with big pocket books have kept all the upside. GDI's contributor owned structure allows even the small guy to benefit from the potential of upside in the enterprise value of the business.

Additional Questions

After the story above was published I had a few follow-up questions for Charles Taylor. His answers can be found at the following link.

Copyright © 2014 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


  • Bill Bachmann Posted Sep 23, 2014
    Jim, I write this from assignment in Norway.

    You still are TELLING agents that RM is dead -- do you ever listen that it isn't to many people and agents?? They told you that, but you seem to make statements that RM is dead and they don't agree. No wonder some people think it is dying -- you keep crying wolf. Many of us -- including PhotoShot --- tell you it is still alive! Listen to some of us, Jim!! Many of us still sell lots & lots of images each month in RM and even (Gulp) RF.

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