Charting Industry Revenue Trends

Posted on 5/20/2008 by Jim Pickerell | Printable Version | Comments (3)

Now that the first-quarter results are in from all the public companies, plus Alamy, are in, we can chart some interesting trends.

   

 

 

Percent

 

Q1 2007

Q4 2007

Q1 2008

Annual Growth

Getty Images

 

 

 

 
(Gross Revenue)

$212,600,000

$218,100,000

$233,200,000

10%

(Creative Stills)

$150,940,000

$131,210,000

$132,460,000

-12%

(iStockphoto)

$13,700,000

$23,640,000

$30,740,000

124%

JupiterImages

$27,914,000

$26,783,000

$26,142,000

-6%

a21

$3,168,000

$2,936,000

$2,615,000

-17%

Alamy

$6,866,000

$7,750,000

$8,097,000

18%

On a company basis, the best year-to-year percentage of growth overall came from Alamy with 18%, even though Getty Images had a respectable 10% growth overall on a much higher gross revenue. And, of course, one division of Getty, iStockphoto, had an amazing 124% growth.

But we need to examine Getty's revenue more closely. The company acquired WireImage in May 2007 and without the revenue that brand provided during the year and the growth of iStockphoto, the rest of the business would have declined.

This is particularly bad news for all the photographers and image partners providing images to the Creative Stills section of Gettyimages.com. Sales there fell 12% year-to-year; indications are the decline will continue. Based on the Goldman Sachs estimates, this segment of the business will decline 18% in 2008, compared to 2007, and by 2012, Creative Stills will be 38% below its 2007 level.

Is Better Editing the Answer?

These figures may also have something to say about editing strategy. In the industry today, it is generally believed that there is a huge oversupply of imagery and that to grow revenue, better and tighter editing is required. The big three, and many other distributors, are currently engaged in a process of tighter editing and removing older images from their collections. Also, a movement is beginning to take older and non-selling images and offer them at discounted prices, primarily through microstock.

So far, that plan isn't generating more revenue.. On the other hand, the site with more than 12 million images, one that added 1,396,254 images in the last quarter, is growing fastest. At Alamy, there is virtually no editing. Alamy's image growth may not be good news for existing image suppliers because it reduces the odds that any particular image will sell. But it may be good news for customers, since they are buying more images every quarter. Are Alamy customers finding images that have been rejected by other sites?


Copyright © 2008 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.  

Comments

  • Grant Faint Posted May 21, 2008
    simple comment how deep will the world recession be? and for what period of time will it exist? 1991/93 recession drove the stock photography into new sales levels. Now with micros pricing hitting at the same time as a recession.....how many buyers will be driven into the business method of acquiring what they need? expect the numbers to change dramatically.

    gvf

  • Tom Grill Posted May 21, 2008
    The most important observation here is Alamy's substantial growth in the face of an explosion of material -- now over 12 million images. This goes counter to what every other agency has accomplished and is doing. Why? Alamy has wisely solved the problem with a computer algorithm that puts the most desirable images (from the client's point of view) at the top of the search.

    It is astounding that the other large agencies -- Getty, Corbis, Jupiter, et al -- have not done this. Instead they continue to follow an outmoded model that allows their accounting department mentality to put those images with the highest percentage return to the company on the top of the search heap. This is a short term strategy sure to backfire as image databases grow. Client will go where they can find the best image and inspiration in the shortest amount of time.

    It has been proven time and again in all reports that buyers seek the right image solution first with price being a much lower priority. The controls needed today, as the image databases grow exponentially, is not simply to cut the number of photographs but to control how they are found. Alamy, to its huge success, has found this out and implemented it.

    The micro agencies have incorporated this policy from the get-go by putting control of search order in the hands of the client. It's basic business 101 to give customers what they want. Why it is taking so long for traditional agencies to realize this remains an anomaly.

  • Tim Mcguire Posted May 21, 2008
    Jim,

    In your story entitled

    Royalties Adapt to Changing Biz Models
    Posted May 13th, 2008 by Jim Pickerell

    ...doesn't the chart you present in that story show that iStock is canabalizing the Creative Stills market and couldn't one conclude that microstock is diluting the revenue of the industry at large... at the least, on the creative commercial end?

    Why would the big three put old images into a licensing model(microstock)that is cannibalizing their core business?

    http://www.selling-stock.com/?p=2661

    iStocks growth doesn't come close to making up for the decline in revenue from Creative Stills. Getty's overall growth comes from other revenue streams and non still imagery business.

    Perhaps Getty is moving on and they've finally finished destroying the market for professionally produced commercial stock photos. Really, what has Getty done for this industry since it entered it 10-15 years ago? The revenue for the industry has stayed stagnant even with an incredible growth in numbers of customers and images licensed. Getty gained market share by buying others and giving away more for less forcing the entire industry into this downward spiral. Hardly an innovative forward looking company. They just did what investment bankers do.. they sucked all the profits out of the industry and now they are moving on.

    Do you think think this industry can revive itself to take better advantage of the huge growth in customers / images licensed? Can we increase the size of "the pie" rather than just continually dividing it into smaller and smaller pieces to be divided between more and more people and businesses?

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