Getty May Dump Distributors

Posted on 12/6/2007 by Jim Pickerell | Printable Version | Comments (0)

As announced earlier this week in abouttheimage.com, Getty Images has decided to pull all its RF images from its Netherlands distributors in order to "add value" to its wholly owned office in that territory.

The Getty collections currently represent a significant portion of the distributors' revenue. But it's also possible that customers will just choose other available images, rather than surf another site.

Clearly, if Getty's strategy works, it will implement it in all territories where it has wholly owned offices. But this move could backfire, not produce a significant increase in revenue and ultimately, make distributors worldwide less dependent on Getty's offering. That leaves Getty with less leverage to push for favorable search return order (SRO) positions and percentages of sales.

To understand how this could hurt, rather than help Getty, several things need to be considered.

1. There is a plethora of outstanding images being produced by new brands, such as Blend, OJO Images, Tetra, Upper Cut, moodboard, GoGo, juice images, Denkou images and others. These and older brands like Image Source will continue to provide the Netherlands distributors like Van Beek and Image Select with a strong offering for their customers, sans Getty. Many of these brands are also on Getty's site, but Getty has limited the number of images and pushed the those it accepts far down in the (SRO).

2. On the Getty site, there are 243,588 RF images from company-owned brands. These images represent only 37% of the total 660,654 RF images on the site. The rest belong to image partners. In September, Getty had 964,227 RF images, indicating that it had done a significant edit in the last three months. Assuming that all the image partner images currently on Getty, plus more the company has rejected, will be on the distributor sites, distributors should have a strong, sizeable offering.

3. A large percentage of Getty's Digital Vision, Stockbyte and Photodisc images are getting old. Getty hasn't been adding many new, updated images to its collections. A host of the smaller production companies are making vast quantities of new images available to the distributor network.

4. Recently, Getty has threatened to pull its images from distributors unless they meet high monthly sales quotas. This has forced distributors to put all the Getty images near the top of their SRO. Getty's dominance in these collections makes images from other brands shown lower in the SRO less likely to be seen, or purchased. Once Getty's images are removed, all these newer images will begin appearing nearer the top. That should increase revenue for many of these brands.

5. Customers have complained that they see the same RF images on all the sites. Now they will be given a choice - newer images on the distributor sites and old images on Getty. Yes, most of those new images from non-Getty brands will also be on the Getty site, but they will continue to be buried far down in the SRO.

6. Customers complain all sites have too many images. By removing its images from distributors, Getty could make the distributor's offerings more attractive than its own.

7. For some time, Getty has pressured distributors to give it a greater percentage of total revenue collected. Percentages used to be 60% Getty and 40% distributors. Now, more often it's 70/30 in favor of Getty and sometimes 80/20. Higher percentages from the non-Getty brands can enable distributors to make more money from selling fewer images.

8. Producers are likely to receive a higher royalty share of sales from independent distributors than from Getty. By working with many distributors, producers also become less dependent on Getty. Producers will be anxious to support a distributor network and make sure it remains viable. The goal of all producers is to become less dependent on Getty.

Taking all these factors into consideration, it is not at all clear that Getty will benefit from this latest move. Getty won't take it beyond the Netherlands if it doesn't work. Every other distributor in the world will be watching the Netherlands test carefully. If Van Beck and Image Select find they can prosper without Getty, that will encourage other distributors to stand up to Getty.



Copyright © 2007 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 www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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