Although they circle at different speeds, have different sizes and even differ in their composition, some planets happen to periodically align themselves so perfectly that it is possible, from earth, to see them on the same horizon. This is what happened a few weeks ago with Venus, Jupiter and Mars. In a rare coincidence, the same event happened on earth with the three largest stock photo agencies in the world: they all had announcements the same week. But as far as one could compare our industry to the celestial movement of our stars, this is where the comparison stops.
In the space of one week, Shutterstock, Getty Images, and Corbis grabbed the attention of industry watchers, as if events had collided into one specific moment on purpose. However, none of these news are related, or so it seems at first.
No bad news
Shutterstock announced its quarterly results. After a second quarter call that sent its stock plunging for months, the anticipation was high. Not only it had lost its longtime CFO but it also missed its target. November 5 would be a time of redemption or capitulation. While no one expected the New York-based company to post poor numbers, many doubted its ability to see the stock price rebound. Rumors of it acquiring Corbis in an act of desperate rebound even reached a peak a few days before. Neither happened. Not only the numbers were healthy, the new CFO happily talkative, but all rumors were pushed aside in a “not good for our growth” statement from Jon Oringer. Instead, the conversation turned around the massive addition of new content, the supremacy of its technology and customer relationship, the juggling of foreign exchange rate, all sprinkled with the enterprise sales growth, video market opportunity and Penske deal. No mention of their DAM business nor of the shutting down of its Skillfeed division. Just a happy fest full of good news. To top it all, Shutterstock announced its commitment to spend $100 million of its cash in a stock buyback effort that instantly made its share take the upward direction. It takes little for Wall Street to be happy and the assurance that someone will buy stocks is certainly on top of their list.
While the consensus is that Shutterstock will suffer from Adobe Stock launch, there was no signs of it during this call and in the days following it.
Juggling with its debt
Getty Images announced, in a non-official way, that it has secured an additional $100 million in cash, by renegotiating the terms of its debt. Plagued by equity firms that seem more interested in paying themselves high returns rather than to help the company grow, along with a challenging mid stock market, the company has been hitting hurtful financial restrictions. Without cash, it can’t compete as hard against the growing threat of Shutterstock and Adobe Stock, in a market where technology and marketing ( both expensive) are the key elements. With the influx of cash, this might not be an issue anymore. The arrival of a new CEO, very well received by the staff, will certainly contribute to Getty’s potential rebound in the space. As the saying goes, beware of a wounded animal and Getty has proven to be in the past a formidable competitor. It has a dominant and very well protected position in editorial – thanks to multiple exclusive representation- as well as, unlike its publicly traded competition, the ability to try, fail and repeat without too much of a hit. And from its first formal announcement, this experimenting with new potentially very successful business models is exactly what the new ceo plans to do.
The announcement of Getty Images demise are certainly premature, if not only wishful by some, and 2016 will certainly be the year where Getty can emerge as the leader of a new line of revenue others will be forced to follow.
A different path
Corbis, in the meantime, seems to renew with its endless cycle of 4th quarter lay off. 15% of its workforce has been asked to leave, a few weeks before the start of the holiday period. While its competitors show a combative attitude towards a challenging market, the Seattle-based company seems to drop its arms in defeat, announcing via its CEO an effort to stabilise its photo-licensing business after a “significant downturn “. The effort, it seems, is with its Branded Entertainment Network, whose profits also “haven’t materialized fast enough to make up for the downturn” in photo licensing. While its editorial division seems to be doing well, in particular Splash News, the rest has been struggling to remain relevant in the face of a very aggressive competition and an increase in new players. Rumors that Corbis is for sale, or part of it, have emerged in the last few weeks, with nothing confirmed as of now. What could happen is that it puts some of its collection for licensing via other channels. For example, it could use Shutterstock to license its vast historical archives. This would allow them to significantly reduce their workforce while still receiving large returns from Shutterstock. Since none of it is exclusive, Corbis could continue selling it in parallel. Finally, for Shutterstock, this would easily add content they currently have little of and create even more of an offering distance with Adobe stock.
Corbis has been on path to re-invent itself into a company that offers object placement in images instead of fighting the traditional photo licensing war, a gamble not far from Getty Images’ image embed model that could pay off if they play their cards well.
Like the planets of our solar system, there is little chance that we will ever experience a time when the three biggest companies have significant news the same week. While they might seem unrelated to each other, they are not. Since all evolve in the same space, what each one does has a direct effect on the other, or is the result of each other strategies. And while 2015 seems to end relatively unchanged from how it started, decisions are being implemented today that will make 2016 a key year in the industry existence.
Photo by rmatthendrick