Financial Results
Olycom, a major Italian photographic agency headquartered in Milan and founded in 1958 by Walfrido Chiarini as Olimpia Fotocronache has filed for bankruptcy. Everything regarding debts is in the hands of a judge. LaPresse, the Italian multimedia news agency led by Marco Durante, has acquired the analog and digital libraries of Olycom including the Publifoto brand, the historical archives Olimpia and Olycom and related brands covering the whole of the twentieth century, with a collection of over 15 million images.
Last week I published information about
Technavio’s new market research report. While I had not read the full report, I pointed out that I disagreed with some of the conclusions provided in the press release.
London based,
Technavio has published its 2018 report on the global still images market. The report estimates that the market will grow at a CAGR (Compound Annual Growth Rate) of approximately 8% during the period 2018-2022.
The report is available at a
discounted price of $2,500 and is said to “provide an analysis of the most important trends expected to impact the market outlook. In addition, it offers an up-to-date analysis of the market concerning the current market scenario, latest drivers, and the overall global environment.”
Shutterstock ought to think about raising prices. Clearly the number of images download is flat and not likely to grow significantly in the future. Just look at the quarterly download numbers for 2016 and 2017. The overall market for stock photographer is not growing. For years Shutterstock got away with taking market share away from Getty. They though that because their downloads were growing that the market was growing. In reality they were just taking customers away from Getty.
Shutterstock has reported Q1 2018 revenue of
$153 million up $22.8 million compared to $130.2 million in Q1 2017. On a constant currency basis revenue grew about 12.8% compared to the first quarter of 2017. The revenue was also up $1.8 million from Q4 2017. Revenue per download averaged $3.40 per image, an 16.8% increase over Q1 2017.
Back in the 1990s and early 2000s stock photo agencies began placing more and more copies of the images they represented with distributors around the world. Initially, this resulted in significant increases in revenue for the image creators and the primary agencies. The Internet and agency consolidation has changed all that, particularly for the image creator. Now, in many cases the distributor system has simply become a way to siphon off a bigger portion of the gross fee paid by the customer to middlemen before the image creator gets his share.
Blend Image, at one time the leading stock photo production company in North America, has announced to its image creators that it is “winding down” operations, “trying to negotiate deals that might provide members with the option to move their content without having to resubmit it,” and making plans to otherwise return content by October 2018.
I was talking to a photographer recently who has both RM and RF collections with Getty Images. The question he faces is whether to put new images into the RM or RF collections. Getty is pushing many of its photographers to move many of their images from RM to RF. Certainly, there is a much better chance that an image will get used if it is available for licensing as RF rather than RM. But, if the photographer’s goal is to maximize revenue, will images offered as RF earn as much revenue overall as those offered as RM?
The numbers
Shutterstock put out yesterday got me thinking. Is it really possible for the average price per download to steadily rise in a year when they have introduced new 10 and 50 image packs at lower costs to the customers? Do the download figures really mean the customers are using more of every category of imagery?
Shutterstock has reported Q4 2017 revenue of $151.8 million up $21.7 million, or 16.6% on a constant currency basis, compared to $130.2 million in Q4 2016. The revenue was also up $10.7& million from Q3 2017. Revenue per download averaged $3.33 per image, an 11% increase over Q4 2016. About 27% of revenue, or roughly $150.4 million, was paid out in royalties to contributors.
Moody’s Investor Service reports that total Getty Images revenue for the twelve months ended 30 September 2017 was
$836.8 million.
Alamy had a very good year in 2016 with total turnover
up 31% to 19,185,668 £ compared to 14,627,376 £ in 2015. However, much of that percentage growth was due to strong sales in the U.S. and a declining exchange rate in the pound compared to other currencies. Based on the U.S. dollar rate at the end of each year the total turnover 2016 was $23,675,114 compared to $21,569,529 for 2015.
The investment banking firm
Jefferies has downgraded
Shutterstock shares from Hold to Underperform with a price target of $30.00. Shutterstock stock price closed today at $33.69 down 20% from $42.14 a month ago. The stock is down 52% from the high of $65.16 that it hit in September 2016.
Time Inc. unveiled plans for a “strategic transformation” that will yield more than $400 million in savings over the next few years. In the last quarterly earnings report total revenues fell 10% year to year while operating income fell from $50 million to a loss of $38 million.
According to
Pew Research Center the combined print and digital U.S. daily newspaper circulation fell an estimated 8% to 35 million and 38 million for Sunday, the lowest levels since 1945.
Shutterstock has reported Q1 2017 revenue of $130.2 million. This revenue was up 12% from Q1 2016, but exactly the same as revenue in Q4 2016. Revenue per download increased 7% from $2.77 in Q1 2016 to about $2.96. Revenue per download in Q4 2016 was $3.02. At the end of the quarter there were 132 million images in the collection and 6.9 million video clips. This was up from 116.2 million images at the end of 2016.
From and investors point of view, Getty may have turned the corner. However, this may not benefit image creators, particularly those from North America and the Western Europe. It is my understanding that gross revenue in 2016 was about $840 million, up about 4% from around $808 million in 2015. Until 2016, Getty’s revenue declined steadily for about three years as they struggled to get their prices in line with their major competitor, Shutterstock.
Masterfile has filed a formal Proposal to Creditors under the Bankruptcy and Insolvency Act of Canada ("BIA"). This is not a bankruptcy. The Proposal process will provide Masterfile the opportunity to restructure its business with the objective of returning to profitability. This process is similar to a Chapter 11 filing in the USA.
Here is a list of 13 questions agencies should consider asking themselves. They might even want to consider asking their top producing photographers and illustrators questions 3, 4 and 7.
Technavio, a leading global market research company headquartered in London, has released its annual report on the
Global Still Image Market, looking ahead five years to 2021. They say: “Technavio analysts forecast the global still images market to grow to
USD 4.46 billion by 2021, at a CAGR of close to 8% over the forecast period."
Andy Sitt, the Malaysian founder of
123RF, is seeking to raise the profile of his Chicago-headquartered stock image and design business among funds and investors in hopes of launching an initial public offering (IPO) within the next 12 to 18 months. "We're at that stage where we have to think of the next stage of the company and I believe that the next stage would be some form of exit. So (profiling the company) is more towards building it for a potential IPO," Sitt told DEALSTREETASIA.
PIXTA Inc. in Japan has acquired 80% of the outstanding stock of Topic Images Inc. of Korea from its parent companies, NEWSIS Co., Ltd. and NEWS1 Co., Ltd. for 130 million JPY ($1,164,780). The transaction took place on Feb 24, 2017. Topic has been selling high-priced stock images mainly in Korea, producing many of them by itself. Topic is now a subsidiary of PIXTA and will receive PIXTA’s strong support for its business operation. However, Topic is continuously conducting its own business as an existing company.
Shutterstock supplies very little information about their Enterprise customers and how Enterprise sales work. Yet it is an extremely important segment of their business and critical to understanding the company’s potential for future growth. At the end of Q3 2016 Shutterstock had 35,000 Enterprise customers up from 24,000 at the beginning of the year, or about a 46% increase in 9 months. How much of that 46% is real growth?
Visual China Group the company that
acquired Corbis in January 2016 has seen a more than 50% decline in value as an investment since the purchase and a 20% decline in the last month. VCG is a publicly traded company on the Shenzhen Stock Exchange.
I was asked recently if I am optimistic that Shutterstock will maintain its momentum in 2017? The short answer is YES, I believe Shuttrstock’s 2017 growth will continue on the same track as it has in the last two years. In 2014 revenue growth was
39%. In 2015 it was
30% and in 2016 it is expected to be around
18%. I expect the company will continue to maintain its
DOWNWARD trend.