In all the excitement about 35 million FREE images it is worth looking back at some of things that have been happening at Getty Images in the last three months.
After watching revenue decline for the fifth straight quarter, and many of its top producers cut back on production or stop supplying new images altogether, Getty evidently decided that their turn-around strategy wasn’t working and they needed to make some radical changes.
Downloads At iStock 12% Lower Than 2012
Many iStock Sellers Stop Producing New Images
Their first move was to sell a couple small brands that probably provided them with a little cash and enabled them to slightly reduce their administrative and marketing costs.
Vital Imagery Acquires Clipart.com and AnimationFactory.com
Next they decided to retire the Jupiterimages and Punchstock sites and make the images only available through gettyimages.com. Many of the images had been available on both sites for some time. Nevertheless, this simplification of the collection structure should have reduced the cost of maintaining separate sites and maybe cut marketing costs, if in fact they had been doing much marketing of these two brands. In all likelihood these sites relied on the customer base that existed when Getty acquired them, and nothing much was done to try to grow customers once Getty took over.
Getty To Retire Jupiterimages And Punchstock
After that came the announcement that Getty was getting more aggressive about chasing infringers and had filed 5 lawsuits in the month of Jaunary. Obviously, Getty would like to, and has a right to, collect whatever they can for the unauthorized commercial use of their images. However, in a little over a month Getty indicated that chasing infringers wasn’t a productive strategy and that now they would make a huge portion of their collection available for FREE Internet use in exchange for information about, and access to, the sites users. (More about this later.)
Getty Gets Serious About Pursuing Infringers
Getty Makes 35 Million Images Free For Blog Use
One of the areas of Getty’s business that it is believed has been growing is subscriptions selling. This is believed to represent $40 to $50 million of Getty’s total revenue. Thinkstock is the major brand and Photos.com was of secondary importance. So now Getty announces that on March 10th they will turn Photos.com into a site where people can only purchase fine art prints. Those who want to purchase subscriptions or license use of single images will need to move to Thinkstock.
Photos.com To Be Consolidated With Thinkstock
The problem, of course, is that Photos.com prices, particularly for Image Packs were much less expensive than Thinkstock prices. Maybe there weren’t that many Photos.com users buying image packs, but if there were they are probably going somewhere else to look for images rather than sticking with Thinkstock/Getty. The subscription plans on Thinkstock aren’t as good a deal for the Photos.com users as they were before, but for a few Thinkstock users there are now cheaper subscription deals. Overall, this will certainly result in a decline in revenue from existing customers. The only way Getty will see revenue growth is if a lot of new customers show up.
A year or so ago Jonathan Klein acknowledged that Getty wasn’t doing a good job of competing with Shutterstock for subscription customers. He set out to improve the quality of the Thinkstock offering by making images from Getty’s higher priced offerings available on Thinkstock for licensing at lower single image prices and through subscriptions. He also increased the Thinkstock marketing.
While Thinkstock’s revenue has grown it hasn’t seriously affected Shutterstock’s growth. Meanwhile revenue in other areas of Getty’s business has continued to decline. (Could it be that instead of attracting Shutterstock customers some customers who used to purchase images at higher prices through Getty’s other brands are now going to Thinkstock to get the images they need?)
Thinkstock vs. Shutterstock
Another thing to consider is that while Getty has been trying to grow subscription sales and make images available to customers for less money, in the last couple years Shutterstock has been focused on finding ways to charge higher prices for uses of some of its images. Subscription sales now only represent about 40% to 45% of Shutterstock’s total revenue. The majority of its revenue comes from: Image On Demand, Enterprise sales, Extended Licenses and some Video sales – and all these areas are steadily growing.
Are Stock Photo Prices Falling Everywhere?
However, despite revenue growth, everything at Thinkstock wasn’t all that great. Getty took over 6 million images from iStock and made them available on Thinkstock. Now, instead of the images being licensed at iStock prices they were licensed mostly for subscriptions that provide the image creator with a royalty of $0.28 per-download. At first this didn’t look so bad to creators because if appeared that there were also a lot of Image Pack sales that paid a much higher royalty. And there was an increased volume of sales.
iStock Accounting Problems
Then Getty discovered that their accounting program was not calculating royalties accurately. Many of the subscription sales were reported as if they were single image sales that earned a much higher royalty. Getty overpaid over 9,000 contributors hundreds of dollars each in many cases. Getty then introduced a program to recover those monies from the contributors by deducting over the next six months the amounts that had been overpaid from the royalties the contributors would have normally earned.
It is unclear whether the revenue growth at Thinkstock is coming from new customers or just cannibalizing revenue from Getty’s other properties and brands.
Nevertheless, Getty has decided that the way to move forward is to launch an expanded subscription service at iStock in case any of the iStock customers aren’t already aware they can get the images they need cheaper by going to Thinkstock.
iStock To Launch Subscription Service
It seems likely that this will result in an overall further decline in revenue generated by Getty’s Midstock division (iStock, Thinkstock and Photos.com).
A little over a week ago Getty made the announcement that they would make 35 Million images available for Free to bloggers – with a few catches.
Getty Makes 35 Million Images Free For Blog Use
More On Getty’s Embed Tool
There are a number of reasons why this may not be as attractive to bloggers as it first sounded. Bloggers may not want to give Getty access to data from their site. They may not like the large Getty logo under each picture on their site and the fact that they cannot control the size of the picture. It is still easier to copy and paste. And if Getty is giving images away for free they certainly don’t have much value. The think is that Getty probably won’t come after them if they copy and paste.
In addition it is not always that easy for users to find an image they can embed. If you search gettyimages.com you’ll find that a huge percentage of the images there are not available for embedding. There is no way to search for just those images that are available for embedding.
All the Image Partner agencies have been told they cannot opt out of the embed program (most would like to), but right now it is impossible to embed most of the images from these suppliers. Has Getty just not got its act together? Will it be possible to eventually embed most of these images? If not, the logic for making some available and others not is unclear at this time.
Right now images available for embedding seem to only be available on the gettyimages.com site in the U.S. We are told they are not available on the Getty Images site in the UK. They are not available on the company’s master delegate sites or on iStock or Thinkstock.
It seems likely that customers looking for free images will do a few searches, discover that the images they want to use are not available for embedding and say the heck with it.
They will just copy and paste the images they want to use.
Finally, to cap off the week, Getty has announced that they will not be continuing the agreement they have had with Flickr for more than 5 years. Currenty 882,334 of the images on the Creative Stock Images section of Getty’s site (9% of the total) are from Flickr photographers. Over the last few years Flickr has been a major source of new images for Getty as most of the photographers who have been with Getty for longer periods have either cut back on producing new images or stopped producing all together due to the decline in royalties paid.
Getty Terminates Flickr Agreement
While the reason for Getty’s move have not been completely explained it appears that Flickr’s wants a greater share of the revenue Getty earns from Flickr photographers than Getty is willing to pay. It also looks like Flickr may be preparing to launch a competing service.
All things considered, it seems unlikely that Getty’s fortunes will change soon.