Has A Recession Hit Stock Industry?

Posted on 11/15/2007 by Jim Pickerell | Printable Version | Comments (0)

There is a lot of talk of recession, but so far the U.S. economy is not considered to be in one. However, recession, defined as two or three consecutive quarters of decline in economic activity, may already be here for the stock photo industry. The revenue numbers below are in millions for the industry's three publicly held companies:Getty Images, Jupiterimages and a21.

Getty Images RM & RF
Q1 2007Q2 2007Q3 2007
Gross RM & RF




Microstock Est.




Net RM & RF w/o microstock




Jupiterimagesa21 (SuperStock)
Q1 2007Q2 2007Q3 2007Q1 2007Q2 2007Q3 2007







Getty's numbers are for Creative Stills (RM + RF) alone, and show an 11.6% decline since Q1, if we remove microstock sales from the mix. Getty's overall revenue trend is somewhat better, but since most readers are interested in what is happening to RM and traditional RF, we'll focus on that segment of the market.

There are no revenue numbers for Corbis, but they have reduced staff by 285 people this year, which probably indicates that revenue is not growing.

Looking Back 

It may be useful to examine the 2000/2001 recession. The entire U.S. economy shrank in three nonconsecutive quarters (Q3 2000, Q1 2001 and Q3 2001). The only numbers we have that provide some comparison are Getty's, the only publicly held company reporting revenue at the time.

Getty Images - 2000/2001 Recession
Q2 2000Q3 2000Q4 2000Q1 2001Q2 2001Q3 2001Q4 2001








Q1 2002Q2 2002Q3 2002Q4 2002Q1 2003






The numbers in this chart are in millions and show Getty's gross sales, including editorial, footage and other lines of business, as well as RM and RF. In recent years, Getty has provided breakdowns of RM and RF sales, giving us the opportunity to focus on this segment of its business in the top chart.

In 2000/2001, Getty's sales didn't start declining until the country was well into its recession, but it took almost a year after the technical end of the recession for it to begin to come back.

Several differences between the two periods should be considered. Getty acquired TIB at the end of 1999 and VCG in March of 2000. Despite general economic trends, Getty may have continued to grow as a result of these acquisitions. Today, Getty faces fierce competition from two other major companies, which reduces its options.

In 2000/2001, advertising use was the first market segment to decline. When money is tight, the easiest thing to cut back on is advertising. A large portion of the revenue of the three companies listed comes from licensing images for advertising uses. The current downturn in stock photo sales could result from businesses anticipating a recession and already looking for ways to cut costs.

While there are indications that corporate advertising budgets haven't declined, the money is being spread among more projects. Thus, art directors tend to buy cheap pictures for as many projects as possible so they can save a significant portion of the budget for a few big expensive productions. Unfortunately for stock shooters, those big productions tend to use assignment photography rather than stock.

Microstock also comes into play this time. In 2000/2001, if someone needed photographs, but wanted to cut costs, they went to RF instead of buying RM. At that time, the proportion of RF sales relative to RM was certainly growing. Customers saved money, but nowhere near what they can save today by using microstock.

The earlier recession probably improved the credibility of RF. As more people began to use it in order to cut costs, they discovered that it covered many uses; there was no need to return to the more expensive RM. The decline we're seeing now could easily get worse if an overall recession hits. When we come out of it, there will undoubtedly be more people satisfied with microstock.

It's also worth noting that editorial producers and sellers did not seem to suffer as much in the 2000/2001 recession as those selling for advertising and brochure uses. The generally accepted reason was that book publishers had longer lead times and were less able to adjust their purchases to the short-term economic trends. Thus, they continued to purchase when the advertising buyers were cutting costs.

The only other large company with any kind of published numbers is Alamy. Their 2007 revenue figures indicate 16% growth, not decline, but two-thirds of the company's revenue is from editorial, not commercial/advertising uses.

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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