Random Thoughts 33

Posted on 6/2/2001 by Jim Pickerell | Printable Version | Comments (0)

409

RANDOM THOUGHTS 33



June 2, 2001

Getty's Foray With Art.com Ended


In mid-May Getty Images finally called it quits with Art.com and
closed down its Chicago operation firing 50 employees and notifying
the remaining 20 that they will be laid off.


Getty paid $117 million for the company less than two years and could
never make it profitable. In 2000 Art.com had about $20 million in
sales, up from only a few hundred thousand dollars when Getty
originally purchased it. But operating expenses were about $34 million
leaving a substantial loss. Once again it goes to show that increasing
the volume of sales doesn't do much good if you lose money on every
sale.


Getty said it was writing off $53.4 million in impaired goodwill
related to Art.com.


On May 25th it was announced that online poster store Allwall.com
acquired all the assets of Art.com including the web domain name,
trademarks, sales partnerships and some inventory for an undisclosed
amount. Current visitors to Art.com are being re-directed to
Allwall.com's site. AllWall's CEO Joshua Chodniewicz said, "We feel we
have a better product. We feel they have a better name. Now we have
both."


Jonathan Klein, CEO of Getty Images, said, "The strategy of targeting
the consumer is behind us. It was a mistake, no doubt about it."


It is interesting to note that the company that origionally registered
the Art.com domain was Aeronautical Rotational Technology. They used an
acronym of their company name. They sold the domain name for $50,000.



GlobalPhoto And Stock Media Form Alliance


GlobalPhoto SA and Stock Media have formed a transatlantic strategic
alliance to market photography and multimedia content through their
respective Internet distribution channels. The companies will combine
sales networks and inventories in the U.S. and Europe to license
content to commercial print and digital clients for editorial and
advertising use.


GlobalPhoto www.globalphoto.com
represents high quality images from
over 450 independent photographers and 25 stock photo libraries.


Stock Media Corporation www.stockmedia.net
is a digital source of content for web designers, online publishing
entities and broadcast brands.


Stock Media CEO Randy Taylor says, "GlobalPhoto's strength in Europe
will serve our contributors by enabling rapid expansion in key growth
markets online." Adds Floris de Bonneville, President of GlobalPhoto
SA, "The strong technologies of our companies make a solid foundation
for increasing our respective shares of the American and European
markets."



Royalty-Free Growth


Royalty-free CD-Rom's are the #1 source of stock images for publishers
with 35% increasing their use of RF CD's according to Trend Watch.
Meanwhile, 31% of publishers say they're increasing there purchases of
single royalty-free images from the Internet.
The #1 decreasing method is negotiated-use, fee-based images found
through a print catalog or agency.


Trend Watch acknowledges that this is not good news for shooters, but
they say there is a growing demand for content and thus it is a great
opportunity for photographers and illustrators who can keep it
supplying new content quickly and inexpensively.


As the RF market becomes glutted with content the question for
photographers is can you produce new content inexpensively enough to
make profit on only a few sales. More and more RF photographers seem
to be going for the day rate and expenses model, putting the risk back
in the hands of the RF producers.



Royalty Free In Europe


Based on information I was able to obtain at the CEPIC Congress, I
believe RF sales in Europe are probably about 10% of worldwide sales
at the present time, but growing rapidly. In the range of 15% of the
gross revenue is for single images. The remainder is for discs. This
needs to be compared with single image sales of 60% to 70% in the U.S.


There are two things that will affect RF growth in Europe. First, a
much higher percentage of European sales are for editorial uses than
in the U.S. and RF often does not fit the needs of editorial users.
Second, the European market is large in total sales, but much more
segmented than the U.S. market. As a result many of the uses are for
much smaller circulations than is the case in the U.S. Higher
circulation uses are more rare. As a consequence the RF fees are often
very close to what the customer would have to pay to license a Rights
Protected image, and thus there is much less price incentive to buy
Royalty Free.



Sportschromeonline.com


A new online sports photography agency has been launched in New
Jersey. It is called SportsChrome Online and its core file is the
Focus On Sports agency file. The company is looking for new content
and can be reached at sales@sportschromeonline.com or at
www.sportschromeonline.com .

or by phone at 201-568-1412.



Image Grabber Continues To Expand


BrandX Pictures, a RF company based in California has joined image
grabber and can be found at

http://imagegrabber.randomeye.com
.


Image grabber has also launched a site in the UK with Media Guardian.
The address where you can find a number of the stock agencies in the
UK is:

http://mediaguardian.co.uk/services/imagegrabber
.



U.S. Photographers Joining PACA


In a 1999 survey by BAPLA, the British picture library association,
more than 56% of the picture libraries in the UK had less
than three employees. The same seems to be true of many of the
associations in other European countries.


In Europe individual photographers with large libraries are members
of the picture agency associations in
their respective countries. As a result they have an opportunity to be
better informed about stock agency issues and problems. They also have
many more opportunities to network with representatives from other
stock agencies.


Until recently U.S. photographers could not join the Picture Agency
Council of America (PACA). In 2001 PACA began accepting individual
stock photographers as
members. In the changing stock photography climate there are many
reasons why stock photographers should consider joining PACA. Let me
highlight a few:


  • Member receive a legal handbook complied and updated regularly
    by Nancy Wolfe, PACA's attorney. It contains sample contracts,
    delivery memos, model releases, etc. However, even more valuable from
    a legal point of view is the weekly legal update that is e-mailed to
    members and available on the PACA web site. This keeps you up to date
    on the changing legal decisions affecting our industry.


  • Members are entitled to attend the International Conference held
    in conjunction with Photo East in New York each November. Not only are
    the American agencies represented at this conference, but there is
    strong attendance from the international community. Last year 565
    individuals from 230 companies and 36 countries attended. This is a
    tremendous opportunity to learn who is doing what and make contacts
    for potential representation in various countries. As more portals
    develop and the stock industry moves ever more toward digital search
    and delivery, photographers will need to develop more direct
    relationships with image sellers in various markets overseas.


  • The third highlight to my way of thinking is the CEPIC Congress
    that takes place each May somewhere in Europe. This year it was in
    Amsterdam. (See story) Next year's will be in either Milan, Vienna or
    Budapest. A final decision will be made later this month. In Amsterdam
    there were over 400 individuals representing 238 firms from 37
    countries. All the same types of networking and informative seminars
    take place at CEPIC as occur at the PACA International Conference.

If you get nothing more out of the organization than these three
opportunities you will have received tremendous value for your $500 a
year annual dues -- and there is much, much more to get from
membership. I encourage every photographer who make a significant part
of their income from stock to consider joining PACA. For more
information go to www.stockindustry.org and look under "Auxiliary
Member" for additional details.



EyeWire Moves


Getty's EyeWire brand will be moving to Seattle over the next year and
the Calgary offices will be closed. This is another move in Getty's
integration and consolidation process. It is unclear how much new
product will be produced under the EyeWire brand.



Mauzy Joins A21group


Charles Mauzy has been added to the A21 advisory board. Mauzy,
formerly CEO of Altamira Group, is a consultant to the digital photo
industry. Prior to joining Altamira, he was an executive at Eyewire
and DemoRoom. He also served as Director of Media Development at
Corbis and Director of Photography at AllStock.


A21group was founded in early 2000 and its mission is to preserve,
support and guarantee the continuation of the craft and fine art of
photography. It is headquartered in San Francisco and maintains
offices in Denver, New York and Seattle. It is scheduled to be
acquired by Protosource [NASDAQ: PSCO]. For additional information see
www.a21group.com.


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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