The Universe is shifting

Every time there is a new acquisition in this industry, it is almost like two galaxies colliding : a cluster of individual stars burst out and create a new sytem. Corbis has acquired many agencies over the course of the last 10 years, and every time, elements have left to create new agencies. Redux, Contour, Polaris, Gogo Images, Blend and many others have been created by people who once belonged to the Corbis nebula. Getty, while more careful at not letting new stars emerge from its gravity pull, has not been spared by this “natural” phenomena.
Successful entrepreneurs or staff members of recently acquired agencies, uncomfortable within the new alliance, leave to open new photo agencies, with different levels of success. Job redundancy, inevitable within these mergers, push the newly acquired employees out, in favor of the longer, more faithful and stable employees.

The recent acquisition of Mediavast by Getty Images will create such an effect. There are huge areas of redundancy in both companies and integration will force a lot of employees and photographers out. Some will choose to leave before, as they will undoubtedly not feel at ease in such a huge corporate environment. Those who used to be big a fish in a small pounds will find themselves ignored, isolated. There is a lot of ego in this industry.

Some photographers, mostly from Wireimage, and maybe Contour, will leave with their clients, and open new agencies. It is inevitable. The commercial stock division will be closed,  as it redistribute mostly collections that Getty already represents. The sports department might have to be broken apart as to appease the growing rumors of a monopoly. All the medium and lesser quality red carpet photographers that used to be the bread and butter of Wireimage will be expelled, as they will become irrelevant and redundant in a market already over saturated by images. Getty already covers these events quite well with their existing staff. All these ex employees are potential new stars in the photo system.

The successful new agencies they will create will become another potential acquisition for either Getty or Corbis.

This business is quite different then any other ( I hope you have noticed that by now). Each photographer is not a worker, but a small business unit by itself. A factory worker would be lost without a factory. A photographer, on the other hand, does not need an agency to be productive and successful.
He/She controls almost all the process and can take it anywhere. A while back, Getty had renamed itself a “distributor”, dropping the more challenging “agency” term. The idea behind the move was, besides escaping liabilities, if you control the channels of distribution, you control the market. You don’t necessarily need to control the production end. If I am the only outlet from which image buyers can get images, them everyone will have to go through me. I can charge a commission on each purchase and live happily ever after.
Often compared to Wal Mart or other big distributors, Getty should be, in theory, not acquiring anyone. After all, in a classic market, distributors do not acquire suppliers. Wal-Mart does not own any of its suppliers, neither does Target or K-Mart.

Something is not working. If other smaller image providers can get to the market directly, than Getty does not completely own the photographic distribution channel. Every acquisition by Getty is a sign of its weakness. It just reassess that Getty doesn’t not and cannot control the distribution channel without also controlling the content creators and forcing them to use their service. A bit as if Wal-Mart could not grow without acquiring all or the majority of its suppliers, forcing people to go shop at their outlets, not because their pricing is so appealing, but because no one else carries what they have anymore. Getty cannot follow Wal Mart in its price cutting initiative, because, unlike Wal Mart, Getty is also its own major supplier.

Furthermore Getty has been struggling with the celebrity space. It had first acquired Online USA, then ImageDirect, and now Wireimage. The ex owners of Online USA created Buzz Foto, the ex owners of ImageDirect build ABACA USA and NBC Photo Bank. What will come out of Wireimage? More Getty competition ?
They have had more success in the royalty free space as the “spin offs” stars are now just becoming creators and leaving the distribution to third parties, (Blend, Candy Images or Gogo Images for example). These companies only produce images but do not license them directly, leaving that effort to Getty, Corbis or others.
So what is so different about photography ? well, for one thing, photographers only produce raw material ( no puns intended). Images do not become finished products until they are published somewhere. A quick course refresher in Economics : a finished product is a product that a consumer can purchase “as is” and immediately consume. Consumer can only “consume” an image when it is published, either in a magazine, an ad or on the internet.

Getty is trying to gain control of this raw market.But unlike heavy duty raw materials like oil, or coal, photography is much cheaper to create and, more important, much easier to market. As much as I would have a hard time retrieving oil from my back yard, I would have an even harder time to get it to chemical plants or refineries. I, can, however, take a picture right now and make it available within minutes to multiple image buyers. What is, if I may, the added value that Getty brings to an image ? It can facilitate its creation and it can facilitate its retrieval. Nothing really that no other company cannot do.
And this only takes into accountant those images taken by professional photographers, not the emerging UGC ( User Generated Content) . That UGC base, currently copying the professional market, is soon going to add hyper local content. That is, if a major car accident happens on highway 25, the local farmer will have a picture and give it to the local news stations, newspapers and websites for local consumption. Getty cannot compete with that. And although this might seem trivial, multiply it by all the hyper local news in the world. It is a huge market, probably much bigger than the 10 worldwide news stories that dominate the world news media for a week. As is local advertising.
Can one ever control the world production of photography, either by owning it or being its only distributor ? can Getty ever claim the position of center of the photo universe and have all the stars and galaxies spinning around it ? The laws of gravity are about to change, as soon Flickr and Google turn the “licensing” switch on. Google already makes it possible to search for royalty free “licensable” images in its advanced search ( it is hidden in the French advanced search).

It is evident that photographers, worldwide, will look for the best distributors. The ones that deliver the most sales per images. Photo buyers, in return, will go where the majority of photographers will make their images available. It’s a battle of traction and attraction. Gravity and pull.

This entry was posted on March 4, 2007 at 5:57 pm and is filed under google, flickr, corbis, getty. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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