The Internet Killed the Photography Star

It seems like every week there’s another example of how the Internet has toppled business models that have been in place longer than the Internet itself. Control is not really possible when there are so many ways to pirate or undercut sales. The newspaper, music, movie, and now images market are changing drastically (and I love to read Seth Godin’s take on the changes).

Now, Getty Images, which is the world’s largest supplier of pictures, is for sale. Goldman Sachs is handling the deal which the New York Times says could get $1.5 billion. In November, Getty reported a third-quarter profit of $25.7 million, down 31 percent a year ago.

Getty was the first to license images online and now it’s fallen victim to it. Sites like Flickr, iStockphoto (which they bought for $50 million in 2006), and others charge much less – sometimes free or a dollar an image. That forced Getty to lower their prices. Then came cell phone cameras, that have further eroded their profit (which is interesting because though they are low quality they are quick to get, free, and people like how real they are). Their shares dropped more than 47 percent this past year.

I noticed that Getty also sells music (another industry that has been killed, or should I say transformed, by the Internet).

Getty was founded by Jonathan Klein and Mark Getty (see picture, left) in Seattle in 1995. The Getty family, who made their money in oil, owns about 20 percent of the company. They grew by taking traditional image stock archives and putting them online. They also sell high end photography from professional photographers and distribute images from National Geographic and others. They claim an average of 3.2 billion images and 4 million monthly unique visitors to its web site.

  • http://www.ecommerce-blog.org Jestep

    Getty burned all of the bridges they had, and it’s not surprising to see them cashing out while they still can. They ruined istock by excessively upping the prices, and destroying the usability of the site. Try to do something on their own site. It’s about the least usable site anywhere.

    Their own collections range from $150 for a web usable image to about $350 for the smallest print-worth image. There’s hundreds of other companies that offer comparable services for much less.

    There’s really no reason for most designers to use them anymore. They built a solid brand, but underestimated just how solid it was. Instead of listening to their customers and adapting they told everyone what to think, and tried to force their overpriced product on everyone banking on their name to pull them through.

    No regrets here.

  • http://www.theratingblog.com Alan Johnson

    Blogs are beginning to gain popularity compared to other forms of media by the day, YouTube is beginning to become an alternative to TV for some so that the fact that this one also has to suffer as a result of online competition shouldn’t come as that much of a surprise.

    Alan Johnson

  • http://www.thebassman.ca Tim L. Walker

    I think you meant Getty bought iStockphoto in 2006, not 1996. ;)

  • Janet Meiners

    Tim,
    You’re right…thanks for the catch.
    Janet

  • http://www.thebassman.ca Tim L. Walker

    Anytime. ;)

  • http://crenk.com Steven Finch

    This is a very interesting topic. I wrote a quick article about getty over at my site.

    http://crenk.com/2008/01/21/getty-images-is-looking-for-a-buyer-by-the-end-of-the-month/