284 RANDOM THOUGHTS 15
February 10, 2000
A rumor we are hearing from several sources is that Getty will announce
the acquisition of Visual Communications Group (VCG) within six weeks. If
that comes to pass the price will probably be around $200 million and by
our estimates Getty would then own more than a 30% share of the total
stock photography market.
It seems unlikely that Getty has enough cash available to close the deal,
even considering their very successful stock offering last fall.
Consequently, it is expected that Getty will make another public offering
to raise the capital necessary to complete the purchase.
Another Way To Cut Percentages
Robert Tod has sent a memo to all the foreign agents representing Todtri
Productions and Picture Perfect that they have now entered into a
factoring arrangement to help them "manage their business."
The agents are told to send all payments directly to the Platinum Funding
Corp. in New Jersey.
Here's how we think that will work. The foreign agent makes a sale for
$100. They keep $40 and send $60 to the factor. The factor keeps 25% to
35% for managing collections. $45 ($60 - 25%) is paid to Picture Perfect.
The photographers share is calculated on the $45 received, not the $60.
Of course it's a moot point anyway because Tod hasn't been paying the
photographers anything for a long time. He also isn't paying anything to
agents who have supplied work for his Picture Perfect catalogs.
We first reported on this a year ago (See stories
195 , and
Art Resources and Corbis have filed suit against Tod and Todtri Productions
and we understand these cases are working their way through the New York
courts. A number of other organizations are in the process of filing.
ASMP is gathering data and may bring an action on behalf of a number of
Times Company Digital - IPO
The New York Times has announced plans to issue a tracking stock for Times
Company Digital (TCD), their Internet division, in an effort to raise as
much as $100 million in an IPO.
In its preliminary prospectus filled with the SEC the company said it has
more than 138 million page views on all their web sites in December 1999
and 90.7 million for the Times web site alone.
For the nine months ending September 30, 1999 TCD generated $15.3 million
in revenue up 48% from the corresponding period in 1998. Their net losses
were $11.7 million up 108% from the previous year.
It is easy to understand why TCD doesn't want to pay for their content
when they are losing money. Maybe when they get an infusion of $100
million in new capital they will be more willing to pay for content.
TCD has agreed to pay The New York Times Company $5 million a year for a
10 year license to use trademarks and news reports generated by The New
York Times, The Boston Globe and other subsidiaries of the Times Company.
This fee will rise once revenues top $50 million and will reach a maximum
fee for $17 million a year plus 5% of revenues above $200 million.
TCD has 10 million registered users. Registration gives advertiser
details about the audience they hope to reach.
Post Publisher Focuses On Internet Strategy
At the Washington Post publisher Donald E. Graham has decided to
relinquish his day-to-day management of the newspaper in part so he can
spend more time on Internet strategy.
Happy Photographers At Corbis
I'm finding more happy photographers at Corbis these days. Some who have
work with several agencies are reporting that the volume of their Corbis
sales is moving up steadily while sales at most of their other agencies
seem to be dropping.
Corbis International Sales Strategy
Corbis has recently signed representation agreement with Grazia Neri in
Italy and had previously set up a partnership arrangement with Picture
Press in Germany.
This is significant because Corbis has evidentially decided not to set up
a wholly owned network of sales offices around the world, but to develop a
network of "digital partners" in various countries.
Both these agencies will continue to operate as independent firms and to
market their own material.
This is markedly different from the strategies of Getty and VCG. Rumors
have it that Getty is currently trying to buy a number of The Image Bank
francise offices around the world in an effort to further consolidate
their ownership of their marketing outlets.
One advantage of the partnering strategy is that it tends to make full use
of reputation and experience certain industry leading agencies already
have their respective countries. Many of these agencies would not
consider selling their businesses.
Devaney Stock Photos
Bill Devaney has retired and is no longer licensing rights to stock photos
and is looking for someone to purchase his business. He has been in and
out of hospital for the past year and his health is not good.
He has not returned the images in the file to his photographers because he
has no staff to handle the sorting job. His hope is that someone will buy
the business and take over the task of sorting and returning images to
those photographers who want their material back.
Bill can be reached at Box 732, North Port, NY 11768, tel: 631-757-1152.