The Mystery sale

April 8, 2007 by pmelcher.

Something doesn’t smell healthy in this deal. Actually, smells fishy to me. As I had wrote about it before, I am more and more convinced that the investors sold the company. Above and beyond the owners decision to do so. Someone got really badly on this one. and it wasn’t me. It was clearly a case where the investors, the VC’s, decided to cash in on what they thought was a juicy proposition for them.
The numbers just do not compute. Mediavast has borrowed close to 27 million US dollars form VC investments since they have started. Getty started with 30m. Getty images is now generating revenues close to 1 Billion dollars. Mediavast ? If the selling price is any indication, they must have been around $67 million a year. Medivast, like Getty, does sports, entertainment, news, commercial stock, high end portrait, has an assignment division and unlike Getty, it has a video production department. It has been a rough battle. Mediavast competed against Getty for exclusive rights, mostly in sports, and found the challenge too difficult. Yes, Wireimage finally got the contract with the NFL, but, according to well placed insiders, at a price so high that it was impossible for them to profit for it.
What happened ? Mediavast probably spent millions of dollar to make a million. But did they ever generate a profit?
I am puzzled. No one ever questioned this acquisition. Seems that Getty was able to push the executives of mediavast into a tight corner and went courting the investors. Considering that Mediavast also granted stocks to all new contributors during their first year of operation, the 200 million will be divided in a lot of different hands.

Getty not buying Jupiter Media and buying MediaVast is just another proof of the power of RM. As I said before, RM will be untouched by the growth of microstock. RF might end up devastated. Even the Flickr of the world will hardly make a dent if they ever figure out how to enter the market. Furthermore, what is Flickr and others compared with Photobucket who has more than 2 billion, (yes, billions), images on-line.
Seems to me the market has yet to understand what is really going on. RM is MUCH more profitable than RF. Yet, with the advent of Microstock and other RF companies, everyone is rushing towards simplicity, like they were caught in the headlights.
Apparently we all got it wrong.RM is where the growth is, and that is where Getty is investing. Not in RF or other short sighted, dead end, over used and abused licensing business.

Pay attention. The future is in high end quality images . RM.

Period.

Posted in HOLGA, flickr, getty, Microstock | Print | No Comments »