Follow The Money

Posted on 4/3/1997 by Jim Pickerell | Printable Version | Comments (0)


Follow the Money

April 3, 1997

The British are coming! The British are coming! I'm not Paul Revere, but
the 1990's invasion of the stock photo industry is likely to be much more
successful than the British invasion in 1775.

The generals to watch are Mark Getty and Jonathan Klein of Getty Communications
and Sheldon Marshall of Visual Communications Group. They bring capital
and a big appetite for growth. Much of their growth results from acquiring
companies and consolidating the marketing of stock in fewer hands.

They can point to some real growth in sales by the various divisions of
their empires. But, in my opinion this growth is due more to taking market
share from smaller suppliers than from a significant growth in the size
of the total market.

Since its acquisition of Tony Stone Images two years ago Getty Communications
has had a "commitment of becoming the world's largest visual content
provider." By my calculations they are unquestionably number one in
gross sales at present. Visual Communications is smaller, but with equal
ambitions for growth.

The combined sales of both companies probably represents close to 15% of
the world's sales of still stock images.

This consolidation is not necessarily good or bad for photographers, but
it is certainly a trend that bears watching and understanding. Photographers
may find that they need to approach the market in a different way as more
and more of the content is controlled by fewer and fewer people.

Getty Communications

On March 25th Getty Communications purchased Liaison, a New York based photo
agency and one of the world's leading suppliers of news material for $8.5
million in cash and stock. Up to now Getty has focused more toward the corporate
and advertising side of the stock photo business and has not been involved
with an agency that is heavily focused on getting assignments for its photographers.

Mark Getty said, "Liaison represents our first step into photojournalism
and is in line with our strategy of providing a comprehensive range of the
highest quality visual content products to our customers. The acquisition
of Liaison will enable us to satisfy more of our customers' image needs."

Michel Bernard, founder of Liaison will continue as Liaison's CEO. Bernard
says the sale to Getty provides access to capital that Liaison will need
in order to grow. Liaison has a long standing production and distribution
alliance with Gamma Presse Images SA in Paris. This alliance will continue,
but Getty owns no part of Gamma at this time. However, don't be surprised
if that is the next announcement as we understand some of the Gamma owners
would like to be acquired.

In addition, Marty Loken of Tony Stone Images retired from the stock photography
business on March 24, 1997. He has acquired The Wooden Boat Shop, Inc. in
Seattle and will be pursuing his lifelong passion for classic wooden boats.

Marty's three year contract with Tony Stone Images as a result of his sale
of Allstock to TSI was up on the 24th and he decided not to renew it.

With Marty's departure there is no one left at TSI that most photographers
feel will be representing their interests at top management levels.

As one top TSI photographer put it, "It's been a roller coaster ride
the last few years. Strap yourself in and hold on tight." He also hastened
to add that his income has been going up and up, but he is never quite sure
what will happen next?

There were also rumors in the past month that Getty was buying FPG International
for a figure in the range of $50 to $65 million. Mark Getty, chairman of
Getty Communications confirmed to David Walker of PDN that there were discussions,
but that the talks had ended because FPG's price was too high.

Visual Communications Group

Visual Communications Group is headquartered in London and owns the Telegraph
Picture Library, Colorific, Pix in Paris and Bavaria in Germany. They also
have a strong sub-agency network throughout Europe and other parts of the
world. The big hole in their network is that they have no wholly owned office
in the U.S. High on their priority list is to have a sales operation in
the U.S. that they control.

FPG handles their catalog in the U.S. and they handle FPG's catalog in three
countries overseas. FPG would seem to be a natural fit. Many in the industry
have predicted for months that the two would get together. Last fall a rumor
circulated that VCG had offered $35 million for FPG.

Recently sources at Visual Communications have indicated that they have
a new strategy for gaining a presence in the US, and that it does not include
FPG. FPG seems to be out of the acquisition picture because their price
is too high.

Visual Communications has the capital backing of its parent, United Newspapers
plc. which also owns the Express Newspaper group in the United Kingdom.
They undoubtedly have access to all the capital they need to purchase any
U.S. stock agency. It is simply a question of whether the price is right
for the assets offered.

At first glance the following agencies have a strong enough position that
they might be interesting acquisition targets for VCG. They are: Comstock,
TIB, Stock Market, Superstock, Sharpshooters, WestLight, H. Armstrong Roberts,
Index Stock and Masterfile (Toronto).

For various reasons I believe none of these are likely marriages. Some because
they don't seem to be interested in selling at any price and others because
their negatives will outweigh their positives from VCG's point of view.

Nonetheless, the actions of VCG and the above agencies will be interesting
to watch in the coming months. I am inclined to think that VCG may simply
establish its own office rather than trying to buy into an existing operation.
I think they would like to establish their presence in the U.S. before their
next catalog is ready to release which is not very many months down the

U.S. Capital

It is interesting to note that so far there are no U.S. investors willing
to use their capital to make a similar effort to acquire a broad base of
visual content. In the U.S. we have Corbis and Kodak. Kodak acquired The
Image Bank in 1991 to keep it from going into bankruptcy. They propped it
up, and then basically ignored it. In the last six years there seems to
have been very little attempt to really expand the TIB operations.

We wrote about Corbis last month. While they have spent bundles of money
they have ignored the part of the market that currently produces the overwhelming
majority of sales. The file of images they have acquired is focused toward
a dream of a future new market, but will never be able (in its current form)
to supply the major needs of an advertising and commercial market.

The only other U.S. investors who appear to be interested in the visual
content market for still images are much more excited by the clip photography
business than the traditional methods of selling stock.

Copyright © 1997 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, 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:  


Be the first to comment below.

Post Comment

Please log in or create an account to post comments.