Getty Communications

Posted on 10/3/1996 by Jim Pickerell | Printable Version | Comments (0)


Getty Communications

October 3, 1996

In July Getty Communications, the parent of Tony Stone Images, made
a public offering of 5,000,000 ADS shares which represent 10,000,000 Class
A ordinary shares. Getty Communications is listed on the NASDAQ exchange
and their trading symbol is GETTY. The total shares outstanding after the
offering are 30,799,444. The principals still own 67.5% of the total shares
and have controlling interest in the company.

The public offering raised approximately $35,400,000 in new capital
after deducting underwriting discounts, commissions and offering expenses.
This is 58% of their gross annual 1995 sales. The ADS shares were selling
at $13.625 on September 9th.

In 1995, Getty had gross sales of $60,940,000 and a net profit of $1,229,000.
They paid out $23,198,240 to photographers in royalties which was 38.2%
of gross sales. They licensed rights to approximately 143,000 usages for
an average license fee of approximately $426.

In 1995 approximately 89% of gross sales came from their wholly-owned
offices around the world. This breaks down to:

  • North America 42%
  • United Kingdom 19%
  • Germany & Austria 18%
  • France 10%

The remaining 11% of sales were made by licensees in other countries
of the world. Photographers receive 50% of sales in their home country
and 30% of sales from all other countries.

Getty sells in 17 countries through 10 wholly-owned offices and independent
foreign agents.

Getty has 584 employees giving them an average income per employee
figure of $104,349.30.

Getty represents about 700 photographers meaning that the average photographer
earns about $33,140.34. Obviously, there are wide variations between the
earnings of the major producers and those on the bottom. Only about half
of the 700 photographers regularly submit images.

In April 1996 they acquired Hulton Getty for $13,125,320 and refinanced
approximately $6,104,800. They also acquired Fabulous Footage for $2,594,540
with $503,646 in refinancing.

In 1995, 94 percent of sales were of images wholly-owned by contributing
photographers. (Tony Stone owns 6% of the images they sold and retained
100% of fees from those sales. That makes $3,656,400)

In 1995 they licensed images to over 20,000 customers world wolkd.

How Important Is Catalog Distribution?

Figures in the Getty Communications prospectus (Tony Stone Images) offer
an interesting perspective on this question.

Of the $60,000,000+ in sales for 1995 about $53,627,000 came from the
40,000 images in the dupe master collection which includes all their catalog
images. That makes an approximate average gross sales of $1,340 for each
image in the dupe master collection. The photographer's share would be
approximately $511.88 per image since they receive an average of 38.2%
of gross sales.

On the other hand Stone estimates they have 2.5 million images in the
general file. Gross sales worldwide of these images in 1995 was about $7,312,000,
or about $2.92 per image. 38.2% of that means the photographers get an
average of about $1.12 per image on file.

It seems clear from these figures that it is CRITICAL to get images
either in a catalog, or part of a very select group of images that are
heavily distributed worldwide, if photographers expect to make a living
from producing stock. Plans For The Future

Getty Communications stated business objectives include:

  1. Become the leading international provider of visual content by expanding
    Tony Stone Images' strong position as a provider of contemporary stock
  2. Apply experience gained in the development of Tony Stone Images to
    improve the operating procedures and marketing strategies of Hulton Getty
    and Fabulous Footage.
  3. Acquire complementary visual content through acquisition and consolidation
    of smaller, independent, often family-owned, photography businesses that
    lack sufficient resources to compete in the rapidly changing environment.
  4. To accurately identify customer needs for high quality images and develop
    a manageable yet comprehensive database of subjects that are capable of
    multiple sales.
  5. The company is in the process of establishing a digital image collection,
    the Electronic Master Collection to position it to serve its traditional
    customer base and enter new markets that will rely on CD-ROM technology
    and on-line transmission.

See related Index Stock story.

See related Public Ownership story.

Rules for supplying feedback


Marty Loken

Clarification Requested

Creative Director, North America

Getty Communications

October 30, 1996 -- Could you please clarify one of the statements you made in the October 3 piece
on Getty Communications, in which you were extracting details from the

When you mentioned that "Getty has 584 employees, giving them an average income
per employee of $104,349.30," I know hat you meant...but some other people
apparently did not understand the statement. Could you please point out--just
for the record--that you did not intend to suggest that the average company
employee EARNS more than $104,000?

(Obviously, the prospectus says that the company's annual gross sales, divided
by the number of employees, equals the $104,000 figure...all before photographer
commissions are paid and all other overhead costs are deducted.)

While we're proud of our sales-per-employee figure, we aren't SO successful that
our employees go home with an average of $104,000-plus each!

Thanks, in advance, for your help in clarifying this one...and best regards.

Pickerell Supplies Clarification

By: Jim Pickerell

In the story on Getty Communications in the September issue of Taking Stock and
on TSO I mentioned that "Getty has 584 employees, giving them an average income
per employee of $104,349.30."

Some people have interpreted this to mean that Getty employees are earning
$104,000, on average. This is not what I meant. This figure was arrived at by
dividing the total number of employees into the gross sales figure. Obviously,
the company has many other expenses, including photographers commissions, that
must be paid in addition to employee salaries.

Nevertheless, this calculation is often used in business to determine the
efficiency of an operation.

Marty Loken says, "While we're proud of our sales-per-employee figure, we aren't
SO successful that our employees go home with an average of $104,000-plus each!"
I agree.

They are justified in being proud. The $100,000 per employee is generally
considered to be in the range for efficiently managed companies. If the figure
is much lower it may indicate that the company is over staffed for the sales
they produce. An over staffed company may be spending a lot on research and
development to ramp up, but before too long they had better produce additional
sales, and get in that $100,000 per employee range. If not, they are likely to
get in trouble, because their other expenses plus employee salaries are probably
going to dictate that they earn in the neighborhood of $100,000 per employee in
order to have a viable operation.

A company that is way over the $100,000 figure may be understaffed and not doing
all they can to grow the company. Unless they have a product people have to
have and which takes very little work to sell, it may indicate that their staff
is overworked. Company owners might also be taking excess profits for their own

The $100,000 figure can be used in another way. It is often difficult to
determine actual earnings of a privately held company, but you may be able to
get an idea of the total number of employees they have. If you know the number
of employees, and you believe the company is efficiently managed, you can
multiply the number of employees by $100,000 and get an idea of what their gross
sales might be.

In any company there are many other factors that affect its health and
profitability. This figure is only one tool and should be considered only in
light of all other factors.

See related
Getty story.

Copyright © 1996 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 301-251-0720, 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:  


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