PictureQuest Sold To Creatas

Posted on 8/2/2001 by Jim Pickerell | Printable Version | Comments (0)



August 2, 2001

eMotion, Inc., has announced the sale of its PictureQuest content business to Creatas
LLC. Creatas is a vertically integrated, media/marketing business selling products and
services to the creative community. It first appeared in the stock photo environment in
December 2000 when it purchased Dynamic Graphics of Peoria, IL.

Currently, Creatas products and services include: royalty free stock images (photography,
illustration and film), publications, education. and other high quality value added
products and services needed by creative buyers. The PictureQuest portal that licenses
right to Rights Protected and Royalty Free images will be added to their product line.

PictureQuest is the world's largest, independent business-to-business stock imagery
portal, that is not owned by a stock photo agency.

The PictureQuest sales and content acquisition teams of about 20 people will transfer to
Creatas and become Creatas employees immediately. Creatas will receive some transition
services from eMotion over the next 2-3 months. PictureQuest operation will remain
headquartered in Vienna, VA and Rick Thompson will continue as Chief Operating Officer.
eMotion will provide the technology and host the site for Creatas using their
MediaPartner 4.0 software based on a three year operating agreement.

"The acquisition of PictureQuest is inline with our business goals of becoming a leader
in the creative services market," said Moffly.
"By continuing to work in partnership with eMotion to run PictureQuest, we at Creatas can
take advantage of the tremendous strength of this leader in the growing digital media
management industry."

One benefit that Creatas brings to the content providers is that they have a 500,000
in-house list of customers in the creative industry.

The sale is a result of eMotion's long-term strategy to focus on software rather than
image licensing. "PictureQuest gave us a real-time laboratory for the development of our
market-leading digital media management software, and a window on customer requirements
and behavior," said Bob Griffin, president and CEO of eMotion Inc. "But with the
successful launch of MediaPartner 4.0 and our ability to provide enterprise-scale hosting
on the MediaPartner platform, that portion of our photographic licensing business is no
longer strategic to eMotion's development."

"We view the sale of PictureQuest as the best-case scenario for eMotion, PictureQuest and
Creatas," Griffin continued. "We are proud of the PictureQuest brand and business, and
for what it demonstrates about eMotion's leadership in digital media management products
and services. That is why our agreement with Creatas provides for protection of the
PictureQuest brand."

Moffly was CEO of FPG from late 1997 when it was acquired by Visual Communications Group,
a division of United News & Media. He left in late 1999 after an unsuccessful attempt to
buy FPG from UN&M. FPG was sold to Getty Images in early 2000. (For more information
about Moffly and his vision for FPG, see Story
111 .)

Supplier Concerns

In the past some stock agency suppliers have had difficulties getting their images
uploaded in a timely manner. It appeared that eMotion often treated the PictureQuest
division and photography licensing as a step-child that was last to get any attention or
revenue as they focused on growing the technology aspects of their business.

Some are concerned that now that the sales and technology sides are two different
companies it will be even harder to get images uploaded. Moffly said, "Now that
PictureQuest is a profit center for eMotion, I expect we will be treated differently." As
a professional services customer, and their largest hosting client, Creatas may get more
prompt attention because it is paying for it. Moffly has assured image suppliers that
solving the image upload problem will be a high priority.

Rights Protected suppliers are also concerned that, given Creatas' current focus on
Royalty Free, PictureQuest will be pushed more toward RF. Moffly said, "strategically, we
acquired PictureQuest to get into the Rights Protected market. It is a very valuable part
of the overall creative services market," and Creatas wants to offer that option to their
customers. Creatas is not interested in acquiring any traditional agency and PictureQuest
gives them an opportunity to participate in the Rights Protected market without owning an

Moffly continued, "We are interested in being a much rounder media business than Getty or
Corbis. Creatas has photography interests, publishing interests, subscription interests
and educational interests. No one should try to infer that we are trying to be like Getty
or Corbis."

Moffly indicated that they would think deeply about the quality of the imagery on the
PictureQuest site. "We're going to take a hard look at the images on the site and
determine whether they are appropriate or not appropriate. There may be some editing. It
is a good bet that we are going to take a hard look at suppliers who have not added new
images in the past few years. Historically the company has been quantity driven (give us
6,000 images a month). We don't want "X" images a month, we want "Y" great images a
month, because that's what's going to sell."

Moffly indicated that one, "tragedy in our industry is that the depth-of-offering has
been eliminated." However, when asked if PictureQuest would be looking for more depth, or
if he thought the elimination was necessary in the current market environment he said, "I
don't know. 80% of traditional sales are from the published works" (a small selection of
the millions of images available).

While he is willing to take all the Royalty Free images offered because they are a
"tightly edited" selection, he indicated that he would not be willing to accept all the
Rights Protected images agencies want to post. "You can't possibly accommodate all the
images that come to market," he said. "A lot depends on the true capacity of the
PictureQuest system. Are we overwhelming our customers with choices, or are we providing
them with a service by giving them a greater depth-of-offering than other sites. I don't
have the answers yet." Clearly this is an issue that he will give a lot of thought and
attention in coming months.

When asked if PictureQuest would start accepting images from photographers directly,
rather than only taking images from stock agencies, he said, "We will weigh the options
of bringing on individual photographer, but will do nothing like that immediately. One of
the advantages of PictureQuest is that it has a very substantial business with only 20
employees. If it goes direct to photographers it would need to add a layer of editors and
others support activities for the photographers. I'm not sure we want to do that, but I'm
not sure we don't either."

The Dynamic Graphics part of Creatas is larger than the PictureQuest part of the
operation. Moffly acquired DGUSA in December 2000. At that time it was estimated that
Dynamic Graphics' annual sales were in the range of $20 million. (See story
369 .) Sources
have estimated PictureQuest's annual sales at between $15 million to $17 million. Nearly
half of PictureQuest sales are believed to be for Royalty Free images. Moffly would only
say that PictureQuest sales were less than Dynamic Graphics, but he would not confirm any
of the numbers.

For more information about Creatas and Dynamic Graphics go to:
www.creatas.com and
www.dgusa.com .

eMotion's Perspective

"MediaPartner 4.0 has gained substantial market acceptance over the past two quarters.
The sale of PictureQuest is a very smart move by management to sell a non-core business
on very attractive terms, allowing eMotion to focus on building momentum for its core
digital asset management product," said John Flannery, managing director of GE Equity, an
eMotion investor.

"eMotion investors support this corporate streamlining as a mature and appropriate
implementation of the long-term strategic plan for the company," said Diana Murphy of
Chartwell Capital, who is also a member of the eMotion Board of Directors. "As eMotion
has expanded recently into the UK and has begun to see significant traction with their
MediaPartner product, the time is right to put all of the focus on the continued growth
of our software business."

eMotion MediaPartner 4.0, the company's patented out-of-the box software solution, powers
the entire life cycle of media management, from creation and collaboration to searching,
storage and distribution. The technology is available either as a product license or in a
hosted environment.

Copyright © 2001 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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