One would think that after so many years, as big and talented as a company like Getty has become, they could out pace, outsmart and out perform anyone on the market today. But not quite so. look at the celebrity space, for example. First they bought Online USA, than ImageDirect, then Wireimage. Why is that ? what is it that these companies were able to do that Getty cannot do?
In Royalty Free: Photodisc then Digital Vision and Stockbyte. This buying pattern made sense when Getty was growing and still trying to consolidate the market. But most of the agencies that Getty is acquiring these days were created after Getty was created. They were much younger than Getty.
There is one obvious reason for this: Getty does not innovate. They react to an ever changing market by acquiring those that succeed in innovation. And there is a simple explanation for that. It is the nature of the corporate beast not to be able to innovate. Since everything is decided in meetings, every decision becomes the decision of many that agree, and in order to have a group to agree on something, you need to have a consensus. A consensus is merely a middle of the line decision for which everyone can agree with, not a bold, innovative move.
There is no management creativity in a corporation, just a slow paced bargaining process within which one makes sacrifices in order to get an idea accepted. The more more the compromise one makes, the more the idea dies. or at least its competitive edge. Thus Getty is condemned at buying innovation. The question becomes, when will it end or is Getty doomed at purchasing other successful companies until the end of times ?
The second part of this destiny, is the failure to integrate. Once Getty has absorbed one of these innovative companies, they do not seem to be able to keep their competitive edge. Otherwise, why would they need to continue purchasing new competitors ? The mistake is quite simple. Once they have acquired a company and integrated its staff, they put it under the management of one or multiple existing Getty managers. The same ones that initially failed to innovate. So, you have a highly creative team suddenly being managed by cubicle-bred managers highly skilled in office politics but totally ignorant in what makes an image sell. After a while, all will for innovation is killed. The limb rots. Time to buy a new one !!
Last, but certainly not least, I find it quite fascinating that no one linked the recent acquisition by Getty of the music company Pump Audio to the fact that they had spent most of the last quarter of 2006 examining JupiterImages books. It is clear that they had the confirmation from JupiterImages that this was a path to follow.
How long can Getty continue this business model ? is there growth in acquisition ? The past, and present, has shown us the answer and there is no stopping Mark Getty and Jonathan Klein to continue. However, in the long term, is relying on others the right path? Well, Microsoft certainly thinks so.