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.