a21 Image Licensing Revnue Up

Posted on 5/18/2007 by Jim Pickerell | Printable Version | Comments (0)



May 18, 2007

a21, Inc. has reported $6,124,000 in revenues for Q1 2007 with 52% of that being for the image licensing portion of their business. ArtSelect, which provides wall art for homes and businesses, provided $2,956,000 of total revenue for the company. Gross revenue was down from $6,283,000 in the previous quarter

The image licensing revenue for Q1 2007 of $3,032,000 was up 4.4% from the previous quarter and 8% above Q1 2006 showing steady improvement. A quarter by quarter breakdown for the stock photo side of a21's last 12 quarters is listed in the chart below. Prior to October 2005 all the photo revenue was generated by the Superstock brand. At that point the company acquired Ingram, an RF and subscription brand.

Q2 2004


Q3 2004


Q4 2004


Q1 2005


Q2 2005


Q3 2005


Q4 2005


Q1 2006


Q2 2006


Q3 2006


Q4 2006


Q1 2007


SuperStock does not report the percentage of total licensing revenue that results from subscriptions, but they did report that they had $373,000 in deferred revenue as of March 31, 2007 and that was up from $242,000 as of December 31, 2006. This is good news because it means that they are selling more subscriptions. Jupitermedia recognizes about half as much subscription revenue in any quarter as they have deferred revenue.

Net loss for the quarter was $962,000 and improvement over the $1.1 million in Q1 2006.
The Art Select division of the company is currently profitable with all the losses attributed to the SuperStock image licensing division. CEO John Ferguson would not predict when the company would report its first profitable quarter.

A21 has also recently announced that it has teamed up with Pixsy and MyNuMo to increase customer traffic at the SuperStock web site and develop new sources of revenue.
MyNuMo licenses images for use on wireless phones and Pixsy is developing three new sites for viewing images only.

The theory behind the Pixsy sites is to earn revenue from third-party advertising. It is unclear whether viewers will be encouraged to use the pictures for personal web sites and PowerPoint presentations or whether SuperStock is simply accepting that any image that can be found on the Internet is likely to be used in these ways and the only way to earn revenue from such uses is to sell advertising on the site.

Superstock has the ability to make such an offering because they wholly own such a large portion of their images. It is unclear how advertising revenues could be apportioned among photographers who have supplied images on a royalty basis if there comes a point where they want to use images other than those they wholly own.

As of March 31, 2007 a21 had approximately 120 full time employees, down ten from the number they had at the end of 2007.

The company said it is in discussions with several potential acquisition targets that, if successful, could result in an enhanced market position and incremental cash flow from operations.

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 301-461-7627, 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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