It came as a total surprise to many Digital Railroad customers. Midday Tuesday, digitalrailroad.net appeared as usual to image buyers, but archive customers logging into their accounts were greeted with a message saying the company has shut down. The message was dated Oct. 28 and did not specify the time of day.
Signed by Digital Railroad’s liquidator Diablo Management Group, the notice said the archival and stock business had failed to either secure additional financing or find a buyer. By the end of the day, the same notice replaced the previous digitalrairoad.net home page, informing visitors that the company’s Web-based archives would only remain accessible for another 24 hours.
The news spread via blogs and email. Though the Stock Artists Alliance, National Press Photographers Association, Selling Stock, Photo District News and others notified their members and subscribers at varying times during the day, many photographers not receive the information in time to act on it within the one-day notice. Executives running Digital Railroad, presumably Diablo Management, have not notified archive customers of the shutdown beyond posting a notice on the home page and in the password-protected archive login area of digitalrailroad.net. Many solo shooters and agencies who used Digital Railroad archives to power their stock-image Web sites will have downtime before implementing another solution.
In the second half of the day, Digital Railroad servers bottlenecked as photographers rushed to archive their images or transfer them to PhotoShelter, which is offering Digital Railroad’s customers a discount and migration assistance. (John Harrington’s Photo Business News provides technical guidance on the FTP process.)
Many of the photographers who were unhappy with the recent closing of the PhotoShelter Collection are now glad the New York company is still in business. Still, confidence is running low, colored as much by economic and industry trends as by PhotoShelter’s financially motivated exit from stock licensing and related layoffs.
Digital Railroad’s manner of exit also—and perhaps not altogether fairly—reflects on PhotoShelter.
The two companies have often been compared in industry discussions due to obvious similarities of services, business paths and ideologically influenced marketing approaches that promised to democratize an industry dominated by Getty Images. Notwithstanding the popularity of image-hosting services, both Digital Railroad and PhotoShelter failed to deliver either stock sales or market transformation.
The abruptness of Digital Railroad’s heartattack-like demise also underscores that the realities of a privately held company are often tightly guarded from its customers. The new features introduced in PhotoShelter’s recent update of its archive technology are meeting with good reviews, and company CEO Allen Murabayshi has repeatedly assured the community that the business remains sound. Yet many are skeptical, as Digital Railroad management offered the same assurances only a month ago.
The first indication of serious trouble came last week, when Digital Railroad informed its membership that it needed to raise additional capital to sustain operations. At the time, several company executives departed, declining to comment on the circumstances of employee arrangements other than to say that cost-cutting measures are underway. Former company executives and shareholders are not responding to press inquiries. Company phones are disconnected, and the Web site offers a California address for Diablo Management for inquiries by mail.