Digital Railroad Shuts Down---Can PhotoShelter Step Up?

Posted on 10/29/2008 by Julia Dudnik Stern | Printable Version | Comments (2)

It came as a total surprise to many Digital Railroad customers. Midday Tuesday, 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 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 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.

Copyright © 2008 Julia Dudnik Stern. 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


  • Bill Bachmann Posted Oct 29, 2008
    I am one of the top stock photographers in the world. I value other photographers very much for their hard work & efforts, but I am constantly amazed how we photographers are screwed in good times and bad.

    Let me see if I have this right… When times are good, one of our agencies sells outright to a Getty (or some other vulture) and the owner of our old agency pockets millions of dollars. It should be mentioned that without the loyal photographer’s pictures in the file, they would have NOTHING but empty computers to even attempt to sell. But, forget that, the old owner sells it outright and never thinks to share that profit with his only resource, his photographers. He/she pockets all the money and thinks he made a good decision for sure! We, the photographers, have to follow the new owner, usually at a lower percentage! (whether we like it or them at all)

    Then, when times are bad — like now — a Digital Railroad runs away in the middle of the night and pleads bankruptcy and AGAIN photographers have to hustle and try to even get any of their images returned and HOPE to get some money back from sales already done! Good luck…

    When are we going to see SOME agency— big or small — working FOR photographers and ABOUT photographers??

    I wonder why we are always last, yet without us they all would have absolutely nothing ever!

    What do others think of this story?

    Bill Bachmann
    Orlando, Florida

  • Tim Mcguire Posted Oct 29, 2008

    For the record, I am not one of the top stock photographers in the world. I agree wholeheartedly with you. Photographers are so used to being screwed over that they don't even get mad anymore. I think photographers should be mad. They need to take their fate into their own hands and stop letting others exploit them and their images. Photographers need to have ownership and control of the distribution of their work. They can't leave it to others who do not have photographers’ long-term interests at heart.

    I have to wonder whether it's really a good idea for photographers to migrate en masse to Photoshelter Archives when there is absolutely no real promise or guarantee that one could count on (or base a business on)that PS will be around next week, next month, or next year. I understand those who might want to save something from DRR that is not backed up somewhere else but is PS really a smart long term decision given the lack of transparency, their track record, and the world economy in general?

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