RM and RF Down At Getty

Posted on 11/2/2007 by Jim Pickerell | Printable Version | Comments (0)

The Getty Images Q3 2007 numbers show a downward tend in both RM and RF revenue.

Total RM revenue for the quarter was $71.86 million, down almost 10% from $79.79 million in Q2 -- and the lowest quarterly sales since Q3 2004. RM revenue for Q1 2007 was $81.64 million. The highwater mark for RM revenue was $86.18 million in Q1 2006. Thus for almost two years the company has seen a steady and increasingly rapid decline in RM revenue.

RF revenue was down, but not quite as bad as for RM. The quarterly figures for 2007 are: Q1 - $82.91 million; Q2 - $81.75 million and Q3 - $79.79 million. However, included in these figures is the revenue from iStockphoto. More about the effect this is having later. Turning to volumes, Getty Images CEO Jonathan Klein told industry analysts in the quarterly conference call that “volumes … fell in the mid single-digit percentage for rights-managed, including rights-ready, and more than 10% for traditional royalty-free single imagery.

So how can traditional RF volumes be falling more rapidly than RM if the decline doesn’t seem to be reflected in total revenue? The answer is microstock.

Getty lumps its RF revenue from CDs, subscription and microstock (iStockphoto) with the revenue from traditional single image RF. If we go back to Q4 2005 before Getty purchased iStock, revenue from CDs and subscriptions was about $10 million a quarter. If we assume revenues for such uses have been relatively stable (and it may have declined) then we can make an estimate of that portion or RF revenue that can be attributed to microstock based on the numbers Getty supplies.

The iStock revenue in millions for the last five quarters would be: Q3 2006 – $3 ; Q4 - $5.8 ; Q1 2007 - $10; Q2 - $12 and Q3 – $15. This would leave the revenue from traditional RF at: Q3 2006 – $75.23 ; Q4 - $71.45 ; Q1 2007 - $72.91; Q2 - $69.75 and Q3 – $64.79. Getty also had some traditional RF revenue from Punchstock in Q3 2007 that was not part of the previous quarter or 2006 figures.

For three quarters this year RM revenue was down $14.7 million compared with the same period in 2006. RF revenue was up $15.44 million, but a significant part of that growth is from microstock sales. I estimate that in the first three quarters of 2006 iStock’s sales were about $8.5 million and in the first three quarters of 2007 they were $37 million.

Klein said that iStock had 4.6 million downloads in the quarter and that the average price per download was increasing. Assuming my revenue figure is in the ballpark that would make the average fee per download about $3.25 for the quarter and a significant increase over the generally accepted $2 average price at the end of 2006.

Klein acknowledged that the company is “seeing pressure on volume in traditional creative stills. The pressure is specially felt at lower prices and file sizes in royalty-free and in the brochure, print advertising and print collateral usages for rights-managed.

He continued, "The amount of print materials being produced is definitely slowing down and the amount of online image use is growing exponentially. Print has always been the bread and butter of the rights-managed business."

Two years ago, over 80% of Getty’s revenue came from the licensing of Stock Photo revenue (RM and RF imagery combined). In Q3 it was down to $72.6% of total revenue or $151.66 million in sales. This was a 6% decline in total revenue for the category from what it was in Q2 2007.

With revenue falling in its core business category, Getty would hope it could make up the losses in some of its other lines of business. In Q2 2007 Getty had a big jump in editorial revenue as a result of the acquisition of WireImage. However, in this quarter editorial revenue only grew about $600,000 to $36.5 million.

Footage revenue was up about 1% compared with the Q3 2006, but down compared to every quarter since then. Despite these trends, the company expects revenue of approximately $850 million for all or 2007. This would be a revenue growth for the year of about 5.4%. The company is estimating 2008 revenue at about $900 million.


Copyright © 2007 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.  

Comments

Be the first to comment below.

Post Comment

You must log in to post comments.

Stay Connected

Sign up to receive our FREE weekly email listing new stories posted.

Follow Us

Free Stuff

Recent Stories – Summer 2016
If you’ve been shooting all summer and haven’t had time to keep up with your reading here are links to a few stories you might want to check out as we move into the fall. To begin, be sure to complet...
Read More
Corbis Acquisition by VCG/Getty Images
This story provides links to several stories that relate to the Visual China Group (VCG) acquisition of Corbis and the role Getty Images has been assigned in the transfer of Corbis assets to the Gett...
Read More
Finding The Right Image
Many think search will be solved with better Metadata. While metadata is important, there are limits to how far it can take the customer toward finding the right piece of content. This story provides...
Read More
Where Is The Stock Photo Industry Headed?
For new readers, or those who may have missed some of what I have written over the last few months, the following are a list of stories worth looking at to get a sense of where the industry is headed.
Read More
Photography As A Career
It’s that time of year when high school seniors are waiting for college acceptance letters and thinking about future careers. If you know someone who is thinking about photography as a career you mig...
Read More
2014 Stories You May Have Missed
For many the end of the year is a time to review past experiences and consider whether it makes sense to chart a new course in the year ahead. Stock photography has changed dramatically for professio...
Read More
More Stories In 2014 You May Have Missed
Every so often I put together a list of the most important stories we’ve published in the recent past. If you are engaged in the business of stock photography the links below are to stories that we’v...
Read More
Getty: A Three Month Review
In all the excitement about 35 million FREE images it is worth looking back at some of things that have been happening at Getty Images in the last three months. After watching revenue decline for the...
Read More
State Of Stock Photo Industry: 2013
If you’re looking for an overview of the state of the stock photo industry as of October 2013 the stories listed below are a good place to start. Regular readers of Selling-Stock will have seen all t...
Read More
Education Market Shifts To Digital
If supplying pictures for educational use is a significant part of your business plan you need to be aware of how the market is trending toward digital delivery and how that is likely to affect the p...
Read More

More from Free Stuff