Rumors are circulating in the industry that Southern Cross Broadcasting in Australia is interested in acquiring some major stock photo properties, but Tim Moore, Managing Director of Photolibrary in Australia says "When it comes to potential acquisitions Southern Cross is focused on companies engaged in film and video production operations, not still photos or stock footage."
Southern Cross controls 8 radio stations and 9 television stations across Australia and they reach 94% of the Australian population. The company had gross revenue of A$403.62 million in the year ending June 30, 2004 and analysts expect it to exceed A$500 million in 2005. (All numbers in this story will be in Australian dollars unless otherwise indicated. At the current exchange rate one Australian dollar equals $.69 U.S.)
The rumors may have got their start when Southern Cross made its recent A$89.1 million acquisition of Southern Star, an independent creator and producer of television programming. Southern Star also owns a minority interest (46.46%) of Photolibrary.
Total Southern Star revenue for the year ending September 30, 2004 is expected to be over A$100 million with over 90% of that coming from Film and Television production and distribution. Less than 10% of their revenue comes from "associate and joint venture entities" of which Photolibrary is one.
At the time of the Southern Star acquisition, Southern Cross managing director Tony Bell said, "Southern Cross Broadcasting has limited growth opportunities in our core businesses of radio and television.... We needed to consider a new business stream and it needed to have some relationship with our current core activities, it needed to be a very well-run business, it needed to be the top of its field and it needed to be profitable. Southern Star achieved all those criteria."
That statement, coupled with Southern Star's minority ownership of Photolibrary and Photolibrary's recent acquisition of the still photo and footage archives of Oxford Scientific Films in the UK, may have led some to conclude that Southern Cross might be taking a hard look at the still photo business. Clearly still photography is a very minor part of Southern Star's, and by extension Southern Cross', overall business.
Before its sale to Southern Star, Oxford Scientific Films had two major aspects to its business. Most of its revenue came from a documentary production unit and this fit very well with Southern Star's major line of business. A smaller portion of OSF's revenue came from the licensing for still photos and stock footage. Southern Star acquired all of OSF and then in December 2003 worked a deal to transfer the 350,000 still images and over 2,000 hours of footage to Photolibrary which will manage the file on an ongoing basis. Since Southern Star had an equity share in Photolibrary it will continue to benefit from future licensing of this work.
According to a Southern Star press release at the time, Photolibrary, with the addition of OSF stills and footage, would have sales in excess of A$8 million per annum. Moore said his company was enjoying over 40% sales growth, but it was unclear whether this growth was based on the addition of the OSF revenue stream, or simply from Photolibraries existing operation.
Photolibrary, based in North Sydney, is the largest Australian-owned photo library servicing the advertising, corporate and publishing sectors and ranks third in sales in the region after Getty and Corbis.
Moore continues to own a controlling interest in Photolibrary and plans to continue to build the business. The company has an online archive of about 600,000 hi-res images, about half of them RF. They market the images through their wholly owned offices in Sydney and Melbourne in Australia, London and Oxford in the UK, New Zealand, Thailand, Malaysia, Philippines and Singapore. They also service markets in India and Indonesia out of their Singapore office and license rights to some images through a network of distributors. Moore indicated that the UK market is a major growth area for the company.