Distributors Fear Getty Consolidation After Jupiter Deal

Posted on 11/24/2008 by Jim Pickerell | Printable Version | Comments (0)

With the Getty Images’ acquisition of Jupiterimages on the horizon, many international distributors working with both companies are feeling very vulnerable.

In several countries and territories, Getty’s images are represented by more than one distributor. In many of these areas, there is also a Jupiterimages distributor. In most places, Getty either has its own office or has appointed one local company as the master delegate.

Distributors who are not among such master delegates believe that after the deal goes through, Getty Images will consolidate sales of its own and Jupiterimages’ brands with a single company for a given territory and withdraw the images from other local distributors. Those at risk of losing the right to represent the Getty and Jupiter collections are in a rather precarious position.

For some distributors, such brands represent only a small percentage of total revenue, and the loss would not be devastating. However, there is at least one distributor who receives 65% of his revenue from licensing Getty and Jupiter brands and feels he may lose this business.

Rather than drop the distributor altogether, Getty may demand a higher percentage of sales or insist on a guaranteed-sales contract. Such a contract requires the distributor to generate a fixed amount of annual revenue for Getty or make up the difference at the end of the year. Given the state of the economy, predicting sales for 2009 and beyond is a frightening prospect.

For some, the prospects seem gloomy; however, the experiences of one former Getty distributor offer some hope. He represented Getty’s collection in a country where he was competing with a Getty master delegate. Roughly a year ago, Getty approached this distributor with a guaranteed-sales contract, which targeted revenues of 20% higher than the previous year. (The distributor said he was already giving Getty the largest percentage of sales, compared to other suppliers.) The distributor had been doing everything he could to push Getty’s images ahead of other brands and did not see how he was going to raise sales by 20% in a down market.

His problem was that 30% of his revenue came from selling Getty's inventory. It seemed unlikely that he could afford to lose 30% of his revenue and still keep his business operating. Nevertheless, in the end he decided he had no choice but to refuse to sign the guaranteed-sales agreement. Getty pulled its images. When the distributor recognized what might be coming, he found other suppliers to replace the content—at better percentage splits. He does not think the new material is quite as good as what Getty had to offer, but it has satisfied his customers. Despite losing Getty, his overall revenue is up slightly in 2008 compared to 2007, which is a major achievement in the current market.

Copyright © 2008 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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