2RANDOM THOUGHTS 107
August 26, 2005
Management Changes At Corbis
Corbis has had another major management change. Jennifer Hurshell, SVP of Images and Joe Barrett, SVP of Marketing have left the organization.
The image licensing business has been integrated under Gary Shenk, Senior
Vice-President, Images, and the related services - Rights, Assignment &
Representation, Mobile and newly acquired eMotion - integrated under Mark
Sherman, Senior Vice-President, Services.
The company released a statement saying, "We have streamlined our organization to ensure our company's continued growth in providing image licensing and related services for our clients."
CEO Steve Davis circulated a memo to employees saying, "Given our commitment to our three-year plan for profitability and continued growth, I have identified a need to streamline our organization to enable specific go-to-market strategies for our different business lines."
Many were surprised at Hurshell's departure given her rapid rise within the company since she was named SVP for Global Corporate Communications in November 2002. She was named to the position of leader of the image licensing business only a year ago.
Musical chairs seems to be a common source of entertainment at Corbis. Since January 2002 there have been no less than ten major shifts at the senior management levels of Corbis.
Jupitermedia Revises 2005 Financial Guidance
Jupitermedia has revised its financial guidance for 2005 and expects to generate revenues of $128 to $130 million. When they made their 2nd quarter announcement three weeks ago they said they expected 2005 revenues to be $139 to $141 million.
The lowering of expectations resulted from Jupiter's closing of the sale of Search Engine Strategies events and Clickz.com Network on August 5th, and the discontinuance of its events business, and Getty Images' decision to terminate its agreement to distribute PictureArts images that will take effect on December 18, 2005.
Jupiter also provided 2006 guidance of $163 to $165 million.
Initially the stock market reacted negatively to this news, but by the end of the day the company's stock price was up slightly. Analysts at Piper Jaffray & Co. said the guidance was in line with expectations and "the PictureArts distribution being cancelled by Getty Images does not come as a big surprise to us. We believe most investors assumed this would be the case. Also, the loss of PictureArts distribution on Getty appeared to only have a minor impact to our 2006 EBITDA estimates."
Jupitermedia Expands Subscription Service
Jupiter has integrated the new royalty free brands it has acquired into a new subscription service called Jupiterimages Unlimited (www.jiunlimited.com) that contains 330,000 images to start. The service has two levels of participation: low resolution image files for web, multimedia and other small uses for $2,500 per year and a $10,000 per year service that lets subscribers download an unlimited number of images at all resolutions.
The collections included are Comstock, Brand X, Creatas, Goodshoot, Thinkstock, IT Stock Free, Photo.com, Ablestock and PhotoObjects. The only images that are being offered are ones that are wholly owned by Jupiter. For example, a portion of the Brand X images are wholly owned, but the majority have been submitted by photographers who are paid a royalty for any usage. None of the royalty images are included in the Jupiterimages Unlimited offering.
All the images will remain available through their original collections, meaning that subscribers to less expensive services like Photos.com may still download images from that collection. Images at brands like Comstock and Brand X can still be purchased individually. All images are available in multiple resolutions. The resolutions range from 1 MB to 75 MB depending on the particular brand. According to Edward Grossman, Jupiterimages vice president of e-commerce and marketing, the company has worked on this offering for about six months.
Getty Changes Numbering System
In an effort to increase efficiency of its internal workflow Getty is changing its image numbering system after September 18th to an eight digit number with no three letter agency identifier infront of it. The agency's original number will be retained as an alias, but will not be visible on the site.
Some image partners believe the entire process is being geared to drop partner branding entirely. As Getty adds more and more partners the list gets longer and longer and Getty claims customers do not search by brands anyway. Dropping the partner brands would also make it impossible for organizations like Selling Stock to track the percentage of images on the site from partners, relative to Getty's brands. In addition it would make it impossible for various partners to make a determination of their competitive position relative to other Getty Images partners based on the number of images on the site.
Photo Events In October
October is a busy month for photographers and stock agencies. Here are a few important events.
October 14th - 16th - PACA International Conference, Redondo Beach, CA.
For more information go to: www.pacaoffice.org
October 19th - Picturehouse, New York at the Puck Building, 295 Lafayette Street
For more information go to: www.picturehouse.org
October 20th - 22nd - PhotoPlus Expo, Javits Center, New York
For more information go to: www.photoplusexpo.com
Stock related seminars at PhotoPlus include:
9:00-12:00 - Lifestyle Stock: Making the Big Bucks,
1:00 - 3:00 - Stock Strategies from PDN's 30
Stephen Mallon, Kareem Black, Shannon Fagan, Amy Eckert, Jeanine Fijol
3:45 - 5:45 - New Age of Stock Information: Content Meets Context
9:00 - 11:00 - Building a Digital Database for Stock Images
David Riecks, Sam Merrill
1:00 - 3:00 - Royalty-Free: An Insider's Guide to Success
3:45 - 5:45 - Maximizing Stock Photography Income
9:00 - 12:00 - What Stock Business Model Is Right For You
Pat Hunt, moderator, James Alexander, James West, Paul Banwell, Patrick Donehue, Alexis Scott, Brad Kuhns, Christina Vaughn, John Lund
1:00 - 3:00 - Educating Students & Educators in the Business of Stock Photography
Changes in the Advertising Industry
Fortune Magazine reports that sales of magazine ad pages in the U.S. are roughly the same as they were in 1998 even though the economy has grown 30%. More and more advertisers are moving away from print and TV as a "brand building" tool and moving to online.
Overall advertising spend is still rising and is expected to be $279 billion this year, up 5.7% from 2004, but print advertising is not reaping the benefits. In comparison advertising on the Internet is still small, expected to be only about $8 billion this year from national advertisers, but that will be up 15% compared with 2004.
In May Forrester Research surveyed 99 major advertiser and 20 ad agencies and found that nearly 85% planned to expand their online ad budgets this year. Sixty-three percent of those surveyed said that as a brand-building tool online advertising was "equal to or better than advertising on TV or in print."
Advertisers like to use online because they can get extremely detailed demographic information about the people who click on their ads. It is also possible to predict the probable response rates to ads on each segment of a portal as well as the time of day ads are likely to be most effective. These are things print will never be able to do. As Internet search engines become more and more sophisticated in their abilities to segment and target buyers there will be more incentive for advertisers to spend less of their ad dollars on print and TV and more online.
Why Are RM Prices Falling?
Recently I was asked, "Why are RM prices falling?"
It seems to me that there are several factors that might affect this. First, when you are calculating the "average" price for RM a lot depends on the number of blockbuster sales that have occurred during the period. A company like Getty which reports revenue quarterly probably has a few very large sales each quarter, but I suspect that sales in excess of $10,000 represent way less than 1% of their total images licensed. On the other hand the number of these big sales and whether they are $25,000, $75,000 or $140,000 like one was about a year ago, can have a major impact on the averages. Looking at trends for the average price of RM on a quarterly basis may not have a whole lot of relevance. A more important issue is the relationship between RM and RF averages. Overall, I think we have reached a point where it will be very difficult to raise prices for any particular type of RM use. As a result the only thing that will change the averages is the mix of types of uses that happen to occur in any given quarter. More significant, I believe is the general growth or decline in the average over a long period of time as well as the trend of the number of units licensed.
The average for RF has more meaning because there is a much narrower range of pricing.
And prices are still likely to go up for RF because it is still such a bargain compared to RM prices for a lot of uses. The big question is how much more can RF prices be raised without losing customers on the bottom end. RF is trying to solve this problem by offering various groups of images at a variety of price points.
As the price of RF goes up more and more low-end buyers, particularly those who are making very small uses, can no longer afford RF prices and are forced to look for negotiable RM images in order to get something they can afford. If the customer is using a volume of images many sellers will be willing to negotiate some very low prices. The editorial portion of the market in particular has been priced out of using RF.
Note in my Story 747 that the average price that Alamy has been getting for an editorial RM image in the last year is $135.58, but the average price that they get for an RF image (given the price increases) is between $212 and $240. Thus, as a larger and larger portion of the low end buyers end up using RM instead of RF that tends to decrease the average price per RM image just like the big fees tended to raise the average. The RM average is likely to continue to decrease as RF prices rise.
If we look at Getty's numbers over the last couple of years the number of RM and RF images used and the proportion of use has not changed that much. My guess is that as the price of RF has gone up a greater portion of the RF images have been used for higher end commercial uses. For the time being, at least, these high end uses of RF are offset by lower end uses of RM. If RF prices keep rising, as I expect they will, there will probably be increasing use of RM images at lower price points.
Talk about how low an RM image can sell for, I was talking to a photographer the other day whose 40% share from one RM sale made by Corbis was $0.98!!!
One big reason for using RF has been "affordability", but as the price of single image RF continues to rise they become less affordable for many.