Yesterday, Shutterstock paid $33 million in cash to acquire London-based
Rex Features. In the technology section of its website
Crain’s New York Business says, “The purchase of Rex puts Shutterstock in direct competition with Getty Images for a share of the editorial stock photography market, and ends long-held speculation that Shutterstock was looking to knock off its London rival.”
Let’s be realistic. Shutterstock may now have a toe in the water, but it is a long way from being ready to jump in and take on Getty in the editorial market. It is believed that Rex’s gross revenue in 2014 was in the range of $7 million. Revenue for Getty’s editorial division was about
$65 million in Q3 2014, up 21% year-over-year. That probably means that Getty’s total editorial revenue for 2014 was in the range of $250 million.
Shutterstock has been hurting Getty in its Midstock business (iStock) and Getty’s revenue from Premium stills has also been declining, but Editorial is a very different from the creative stills side of the stock photo business in which Shutterstock is currently engaged. And editorial is currently the strongest part of the Getty offering.
Shutterstock has a lot to learn about the editorial side of the business before they would really be ready to really compete with Getty in that space.
Some have speculated that Shutterstock might be ready to make an offer to purchase Getty, but with all the problems with Getty’s Midstock and Premium, and the huge cost, buying the whole company would seem absurd.
On the other hand there are rumors that Getty is open to selling its
editorial division separately. That might not be a bad option for Shutterstock. Getty would probably want any buyer to take on a huge part of its debt. With all things considered such a deal might be worth close to 1 billion. Shutterstock could probably swing such a deal, if they are ready to take on a lot of debt.