"Inequality of knowledge is the key to a sale."
– Deil O. Gustafson, real estate executive
Getty Images' management has thrown in the towel. Admitting that they cannot operate the company in the best interests of its shareholders, they have put the company up for sale.
The company's financial woes have been stacking up. The stock price is at a five-year low and down about 75 percent from its all-time high in 2006. Getty arrived late in the low-end image segment and the competition is formidable. Even in the spot-news area, the company is finding it difficult to compete against cell phone images from amateur shooters.
Getty has retained investment banker Goldman Sachs to shop the company around for a potential asking price of $1.5 billion.
The scary part is that the most likely buyers of the troubled imaging giant are not photo companies, but financial companies. Kohlberg Kravis Roberts is currently mentioned most often. If Kohlberg is the eventual buyer, their modis operendi is to finance their acquisitions with junk bonds, leaving the target company heavily laden in debt. This creates enormous pressure for immediate profits.
Look for major cost cutting if Goldman doesn't find a buyer for Getty quickly. If they do find a buyer quickly, look for cost cutting anyway.
This column was originally written in January 2008. For more recent news about Getty Images' acquisition by Hellman & Friedman see Common Cents in the March edition of The Digital Journalist.
• Absolutely no good this month.
• Boston.com's "Your Kiss" feature is yet another plea for reader-supplied content that includes an over killing we-get-all-rights-you-get-the-releases demand.
• Beware shooting any Foo Fighters concerts. They require photogs to sign agreement that limits the images to one specific use in a single publication. Worse, the photographer assigns ownership of the images to the Foo Fighters. "Foo" indeed, it should be "phooey."
• The photographers who have no qualms in signing the Foo Fighters agreement as long as they get access and the "glory."
• Feel free to submit your images to Nat Geo's "Signspotting." Well not quite free. If they use your image, they will pay $50 in exchange for all rights, assurance that you have not altered the image and permission for them to alter it if they want to. Oh yes, if they sue anybody for copyright infringement of your image, they get to keep any proceeds from the suit.
• The Times of London's contributor agreement not only grabs every imaginable usage right, but also takes control of the freelancer's future stock sales of images produced on assignment for The Times. If The Times licenses one of your images, they will pay you 50 percent of "net identifiable revenue" (which could potentially be zero.) If you get a request for the same image, you agree to refer your client to The Times' syndication department. In the latter case, you will receive 60 percent of "net identifiable revenue" (which could potentially be zero.)
• Apparently Lonely Planet Images has gone from being a low-end market to being utterly ridiculous. They are now soliciting photographers to shoot assignments on spec for a potential payment of $15 per image.
Please let me know of any particularly good, bad or ugly dealings that you have had with clients recently. I will use the client's name, but I won't use your name if you don't want me to. Anonymous submissions will not be considered. Please include contact information for yourself and for the client.
Marketing Mentor Ilise Benun points out yet another reason not to charge by the hour: As you get better at what you do, you do it more quickly and more efficiently. This makes your work more valuable to your clients. If you take less time, you will make less money, which makes no sense at all. That's why it can make much more sense to craft proposals on a per-project basis. If you do, continue to track your hours to aid in estimating fees for future projects.
Ilise Benun's Marketing Mentor Site
NPPA Independent Photographers Toolkit
Advertising Photographers of America Business Manual
Common Cents Column On The Cost of Doing Business
Editorial Photographers Yahoo! Group (Message Archives)
Small Business Administration
NPPA Online Discussion Group Instructions