Random Thoughts 58

Posted on 1/9/2003 by Jim Pickerell | Printable Version | Comments (0)



January 9, 2003

Sales Up At WorkbookStock

While some stock sellers have been reporting relatively slow sales in the last few months
sales are booming at
workbookstock.com .

November was another record-setting month with a 23% increase over their previous best
month. They also made their highest license fee ever for a single image (over $39,000) and
their average license fee is at $1,067 per image. Gross license fees for the month were
triple what they were for the same period in 2001.

Buyers received Workbookstock's Book 3 image catalog the first week in January.

Image State 2002 Financial Results

Image State recently reported their results for the year ending 30 June 2002. CEO Michael
Cornish called it a "very challenging period" and reported a loss of 3.9 million pounds
(approximately $6.2 million) before interest, tax, depreciation, amortisation and goodwill
impairment and reorganization costs. This compared to a loss of 7.6 million pounds
(approximately $12.1 million) for the year ended 30 June 2001. Losses in the second half of
2002 were significantly less than the first half.

Cornish said, "Overall, image licensing sales remained flat year, on year reflecting the
difficult market conditions in the US and Europe. Market conditions in the US have been
harsher than the UK."
He attributed a significant part of the operational under performance to the general market
environment. In this difficult market the company focused on absorbing acquisitions made
over the previous 12 months, reducing costs and rationalizing operations in the face of the
continued advertising recession.

During the period from 1 July 2001 to 30 June 2002, turnover amounted to 7.0 million pounds
(approximately ($11.3 million) and this compared to a turnover of 3.2 million pounds ($5.1
million) in the period from 1 July 2000 to 30 June 2001. The gross margin in 2002 was
approximately 69 per cent. This means that 31% of net sales was owed to the creators for the
use of their content. However, the monies may not have been paid to the creators by the end
of the period. Part of this growth in turnover resulted from the fact that ImageState
acquired International Stock Photography of New York in October 2001.

About 51% of the turnover resulted from sales in the US and 49% from the Rest of the World.
In most of the ROW except the UK, ImageState's products are sold by agents. The actual
selling price by these agents is not reflected in this figure. Only the amount the agent
actually pays to ImageState is reflected in "turnover."

The Company has operating businesses based in New York and London employing a total of 79
staff -- 42 in London and 37 in New York. The Seattle office was closed in March 2002 in a
move to consolidate and all its operations were transferred to New York. The 42 people in
London include the UK domestic direct sales team as well as the international agent network

ImageState's still image library amounts to approximately 140,000 per-edited digital images
on-line as well as a substantial analogue collection of over 2 million images.

They reported that the Directors reviewed the levels of goodwill, related to the prior
acquisitions made by the Group and decided that it would be prudent to reduce the carrying
value of the goodwill to reflect a diminution in value due to current market conditions.
This resulted in a write off of goodwill of 14.1 million pounds (approximately $22.5

The Group loss before taxation was 22.1 million pounds ($35.3 million) and this includes the
14.1 million pounds of goodwill write down. This compares with a loss of 10.2 million pounds
($16.3 million) for the year ended 30 June 2001. The Group had a loss per share of 9.64
pense. Excluding the goodwill write down and amortisation, the Group loss before taxation
was 5.8 million pounds, equivalent to an adjusted loss per share of 2.5 pense.


A new web browser called fotoshowpro is being offered to help photographers produce an
online searchable database of their images. For a base fee of $2,000 you get a system that
offers keyword search, customizable graphic design, multiple light boxes, and sales and
traffic reports.

The SQL database back-end supports virtually unlimited image catalogs and runs on Unix,
Linux, Windows or Mac OSX client server technology. All user and administrative functions
are accessed through a standard web browser.

Additional features that can be added are an e-commerce engine with secure credit card
processing, and an area for portfolios.

For more information contact S4media at info@s4media.com or go to: www.s4media.com

Markets Drying Up

When a pro says that "the markets are drying up," it usually means that the markets have
moved in a new direction from the way he or she is doing business.

A Thought On Rules

The following is from a The Case Against Lawyers by Catherine Crier.

"The increasing number of rules make it harder and harder for anyone to know what is legal
and what isn't. Rules generally favor the strong and the dominant who have the resources to
analyze the rules and enforce them. The more rules we have the less fairness we have. The
less we focus on the concept of Love One Another."

God knew what he was doing when he only gave us 10 rules.

Copyright © 2003 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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