Random Thoughts 50

Posted on 8/3/2002 by Jim Pickerell | Printable Version | Comments (0)



August 3, 2002

Where's Digital Vision Headed?

Some in the RF industry are estimating that Digital Vision's content could generate as
much as $10 million in sales annually on Gettyimages.com. Jonathan Klein has said that
Getty will retain more than 50% of the revenue generated and industry insiders believe
Getty may be keeping as much as 60%.

This move could result in some major shifts in the way everyone in the RF industry
operates. Will the Getty sales of DV images be add-on revenue to their total RF position,
or will sales of DV images tend to cannibalize some of their PhotoDisc sales? That should
become very apparent when Getty reports total RF sales in the 3rd and 4th Quarters.

DV is already represented by almost every other distributor in the world. One would
suspect that in many cases sales through the distributors will begin to fall when
customers can find the DV images on gettyimages.com

DV claimed in a letter to distributors that placing their images on the Getty Images
website would benefit their distributors in the following ways:

  • "Allowing us to re-invest in the cutting edge product innovation we are known
    and respected for,

  • "Enhancing our worldwide branding and bringing it to a larger audience ensuring
    that Digital Vision is known to new markets and customers, and

  • "Continuing to develop our sales networks worldwide to ensure that our products
    can be purchased by a wide and varied client base."

We're told that many RF distributors thought this was humorous, but were not impressed by
the logic.

In the RF sector, distributors have usually had exclusive rights in their territory, (or
at least with their set of customers) to represent the imagery of most of the brands they
handle. Without these exclusive agreements it is hard for the distributor to justify
spending to promote a brand. The have worked hard marketing DV products based on their
understanding that DV would protect their position. Now, suddenly the rules have changed
and the same products they offer can now be found on gettyimages.com. Many distributors
feel they have been stabbed in the back and in the future they may not be enthusiastic to
do marketing that would separately promote DV products.

This attitude could benefit some of the other brands that continue to be willing to offer
the distributors exclusivity.

Getty will get some great data when they sell DV images. They will find out exactly which
images are of interest to the customers. At that point it will be relatively easy for
them to assign PhotoDisc photographers to produce images in the same style. Getty will
not want to sell DV images in place of PhotoDisc because they would be giving up a 40%
(or so) royalty rather than the average 17% they give up on the sale of RF products now.

Selling Shares

Jonathan Klein and Mark Getty sold 175,500 shares each of Getty stock in May at prices
ranging from $32.80 to $39.91 per share and netted $6,119,000 each. In early June Klein
sold another 24,450 shares for an additional $803,000. Since that time the share price
has dropped to $14.81.

Editorial Sales At Corbis

At a recent stock photography seminar in New York conducted by ASMP Edie Tobias of Corbis
said that 45% of the revenue from sales of editorial images comes from the commercial
sector of the market.

PictureQuest Moves To Europe

Sources tell Selling Stock that PictureQuest will open an office in Germany next month.
The office will be operated by a former manager of Bavaria stock agency. A site that is
searchable in the German language is currently being tested.

Imagefile Splits To Two Companies

The Irish stock agency, Imagefile (formerly Slidefile) has formed two new and independent
companies. After more than 20 years in the business, the two managing directors have,
very amicably, each taken over different parts of the business which they now run as
individual self-owned companies.

George Munday is heading a company known as "The Irish Image Collection" which will
market a wide range of Irish material both at home and globally. He can be reached at
george@theirishimagecollection.ie and phone: 00353-1802-4444. The web site
www.theirishimagecollection.ie will be launched with about 4,500 searchable images in

Jaimie Blanford will run a new company "Imagefile Ireland" and will represent
international rights protected and royalty free products throughout the island of
Ireland. He can be reached at jaimie@imagefile.ie and 00353-1832-0845. His web address
is: www.imagefile.ie.

Pictor Folds

In June Pictor LTD, headquartered in London went into receivership and before the end of
the month some of the assets were purchased by Image State. Sources indicate that
ImageState paid something in the range of $100,000 to $200,000 for the assets they

One of the main assets that ImageState acquired was the Pictor web site technology and
they are now in the process of moving all ImageState images to that system. The Pictor
site had about 40,000 images on it with ImageState acquired it and ImageState is now
attempting to sign new contracts with the photographers whose images are on the site.

ImageState offered these photographers who signed the new contracts an immediate token
payment of 50% of what they were owed for any sales that were made by Pictor between
March and end of June 2002, even though it is believed Pictor will receive no revenue
from those sales. The first sales reports for sales made under the new ImageState
management will go to photographers at the end of October.

ImageState took possession of all the Pictor images that were in London and is sorting
them for return to the photographers.

The wholly owned French and German offices of Pictor were not acquired by ImageState and
they have been closed. At this time it is uncertain what will happen to the images that
remain in these offices.

ImageState's takeover scuttled the fragile agreement that Stock Connection had worked out
to take over the separate United State sister company, Pictor Inc. (See Story
480 ). That
company had been in Chapter 11 bankruptcy since May of 2001 and as of July 31st was
converted to Chapter 7 and will be liquidated. Efforts are being made to recover the
images for the photographers, but it is unclear at this time how that will be worked out.

Copyright © 2002 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 301-461-7627, 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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