Lecture
Transcrição
Lecture
Knowing Your Industry The Picture Industry in Facts & Figures 1. Evolution of the Industry 2. The Alliance Disease 3. Industry Survey 2008 Johannes Glückler Professor of Economic Geography Catholic University Eichstätt-Ingolstadt Any questions or comments? [email protected] 1 CEPIC Conference | 4 June 2008 | Malta © Glückler Evolution of the industry Phase Key events Foundation 1848 invention of photography (Louis Daguerre, Fox Talbot) First generation of agencies in the 1920‘s in Europe & U.S. Lead firms: Keystone, Dephot, Free Photographers Guild Diversification Oil crisis in the 1970s: Expansion into commercial photography and advertising Innovation: picture catalogue, sophistication of licensing Lead firms: The Image Bank, Tony Stone Digitization 1995: “I can’t understand why any picture library can consider going online“ (Sal Shuel, BAPLA) Innovation: searchable online picture archives 1998: Getty Images sets up e-commerce platform and increases online sales from 14% to over 90% in 2003 (to 100% in 2008) Lead firms: Getty Images, Corbis Commodification part I New License model: royalty-free photography in 1991 Innovation: Unlimited usage right, standardized pricing, market share 7% in Europe, 15% in the USA (2000) Lead firm: PhotoDisc (acquired by Getty in 1998) Commodification part II New License model: Microstock in 2000 Innovation: mass commodification of imagery, user-generated content Lead firm: iStockPhotos (acquired by Getty in 2006 ) 2 CEPIC Conference | 4 June 2008 | Malta © Glückler Revenue development of the market leaders Revenues (million USD) 900 Getty Images (seit 1995) Getty Images (founded Corbis (seit(founded 1989) Corbis 800 1995) CAGR 14,6% Global stock photo market 1989) Jupiter Images (seit 2003) Jupiter Images (founded 2003) – 1990: 2 billion US$ – 2005: 2 billion US$ 700 (Financial Times Deutschland 21.01.2005) 600 Hypothesis: without RF the market would have grown up to 6 billion US$ (luminous) 500 400 CAGR 21,0% 300 Market share of the big three: > 50% 200 CAGR 200% 100 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Annual Reports, Business Press 3 http://www.luminous-landscape.com/essays/micro-payment.shtml CEPIC Conference | 4 June 2008 | Malta © Glückler Royalty free – Virtualization of customer relations Rights Managed Royalty Free 585 235 (2005) (2005) Share in revenues 2005 43% 37% Share in revenues 2002 56% 27% margin 2003 66% 78% margin 2002 66% 80% Mean price per image (US$) – Single royalty payment for unconditional use Organizational innovation – – Getty Images, annual reports 2003, 2005, 2006 Royalty Free Transfer from the music industry at the early 1990s PhotoDisc pioneers royalty free market offering in Seattle Expansion: – – 7% Europe, 15% USA (2000) 20% Europe, 30% USA (Czichon 2007) – Example of Jupiter Images: share of RM in overall revenues < 15% „Getty reported a 5.2 percent year-over-year decline in revenue from rights-managed imagery during the first quarter of 2007“ 4 http://www.stockasylum.com/text-pages/articles/a5sp052007-jup-loss.htm CEPIC Conference | 4 June 2008 | Malta © Glückler Reorganization 1: Specialization on core competencies The production agency – – – The sales agency – – – 5 USP: the ‚picture collection‘ Market intelligence, strategic production planning and production of new imagery Sales partnerships even within domestic markets (up to 70% of revenues with sales partners) USP: control on market access Customer relations, visibility and mass imagery Partnerships for stock procurement through production agencies CEPIC Conference | 4 June 2008 | Malta © Glückler Reorganization 2: Intermediation through navigators Technology: Internet-Portals – – – – Expert Service: Picture search – – – 6 USP: Visibility and traffic Agencies use portals to increase visibility and develop brands. Different organizational forms: search engines, portals (e.g. Alamy), subscription systems (e.g. APIS) Pluralization of distribution channels USP: expertise customer tailored creative service to media clients Commission payment by picture provider, free service for customer. Well received in the German media world CEPIC Conference | 4 June 2008 | Malta © Glückler Technology drives competition: the Alamy experience Total Sales Growth Year 129,440 2002 897,844 2003 4,363,774 2004 12,225,538 2005 18,863,505 2006 24,237,364 2007 29,254,226 CAGR: 120% 7 – – – Sales (USD) 2001 Alamy wesite, accessed 30 May 2008 The business model Innovation 1: the unedited collection Innovation 2: technology Fairness: Owners earn the majority share of royalties In the two years between 2005 and 2007 the number of photographers submitting pictures more than doubled Alamy has now more than 12 million digital photos and receives far over a million new images per quarter – – From 220 agencies From over 5,000 photographers 60% of the image stock are rights-managed photos CEPIC Conference | 4 June 2008 | Malta © Glückler Royalty Free 2.0 – Mircopayment/Microstock "For Getty, entry into the microstock business presents the risk of cannibalization of its higher price business by its lower priced business as this new product attracts customers away from its mature product." Getty Images enters 2006 – – – – Chris Ferrone (About the Image) Bruce Livingston founds iStockphoto in 2000 (CAN), 23.000 photographers supply photos to the agency 1 Mio. registered users Getty buys iStockphoto for 50 Mio. US$. (Photodisc 160 Mio US$, Image Bank 190 Mio. US$) “We’re excited to enter the microstock space, and we view it as an attractive, complementary business given our assets and expertise. We plan on building a substantial, fast-growing and profitable business in this category.” (Gary Shenk, Corbis President) Corbis enters 2006 – Jupiter Images enters 2006 – – – 8 http://www.stockasylum.com/ Strategic entry to develop the market segment. Minority ownership of Hungary based HAAP Media Stock.xchng (250.000 user created free images, 0.5 Mio. registered users) Stockxpert.com (1 US$ per image) CEPIC Conference | 4 June 2008 | Malta © Glückler Web prominence as a competitive edge The daily traffic rank reflects the traffic to the site based on data for a single day. the rank of a site reflects both the number of users who visit that site as well as the number of pages on the site viewed by those users iStockPhoto Getty Images Corbis Jupiter Images 9 www.Alexa.com . accesed 18.5.2007 CEPIC Conference | 4 June 2008 | Malta © Glückler Web prominence as a competitive edge The daily traffic rank reflects the traffic to the site based on data for a single day. the rank of a site reflects both the number of users who visit that site as well as the number of pages on the site viewed by those users iStockPhoto Stockxchng Getty Images Stockexpert Jupiter Images 10 www.Alexa.com . accesed 18.5.2007 CEPIC Conference | 4 June 2008 | Malta © Glückler Getty Images Inc. SOLD ! Getty Images Inc. Share price In March 2008, the private equity firm Hellman & Friedman buys Getty for £1.2 billion. The stock picture agency will be delisted from the New York Stock Exchange. Mark Getty will keep his 15% share in the firm Klein expects growth to continue organically, especially in the 'user-generated' space (i.e. noncommissioned imagery). Istockphoto is believed to be the most profitable part of the company. Business analysts: The stock imagery market shifts from single to multimedia. The next business model succeeds if it has a technical infrastructure that would be able to licence any content (photography, audio or videos). Market capitalization 1.3 billion Euro 2008/Q1 net earnings of $23.8 million down 37% from $38 million during the same quarter last year „The employees and offices will stay the same. It's just a change of ownership. Hellman & Friedman are not in the imaging business, so they won't integrate us with any other companies and they won't shut us down.“ Jonathon Klein, CEO 11 British Journal of Photography, 3 Mar 2008 (www.bjp-online.com) vs. “This deal affects the wider stock market” […] It's another systemic change. The market will either continue to expand with an increasing number of players, or it could retract itself with more consolidation among the larger players‘” Dan Heller, Analyst CEPIC Conference | 4 June 2008 | Malta © Glückler The next step… 12 www.stockasylum.com/text-pages/articles/a5sp052007-sup-pix.htm SuperStock operates the picture search engine Pixsy. Strategy: to replace royalty payments with third party advertising. Consequence: Free imagery, cannibalization of the Micro payment segment State: experimental phase CEPIC Conference | 4 June 2008 | Malta © Glückler Latest trends and expectations ; hat I mean w d n ta s r e und . Can schedule to g worth watching V T r u o y t a nothin ed “Just look nnels but of a civiliz a s h d c e d e e n r l d cultura nine hun s feed the o e id v e b YouTu ith) (Zave Sm society?“ “the role of technology, and how it w behavior, wil ill likely imp l drive chang act buyer e in a signific Donehue, PA ant way. ” (P CA) atrick “buy it cheap or make it specia l” (Haim Ariav) oto ’s of a few huge stock ph 90 19 e th in ce en erg em “The ess persons m forward-looking busin corporations resulted fro orted and ere consolidation, supp wh try us ind e rat pa dis a seeing r more ologies, would allow fo hn tec w ne by ed nc ha h en owth and success throug gr ing nd tou as ’s tty Ge . efficiency eimage.com) (Chris Ferrone, aboutth n.” sio vi at th ms fir af 2005 13 www.stockasylum.com, 3 Apr 2008 “the need for stoc k imagery has in creased dramat with the introduc ically tion of websites, bl ogs, newsletters, outlets that did no and other t exist ten years ago” (Oleg Tsche Fotolia) ltzoff, “One trend th at I am start ing to notice starting to tr is that distrib eat their best utors are p hotographers They are rea with respect lizing that w again. ithout great force in the content, the world will c b e s o t m sales e home with Smith) empty pocke ts” (Zave less cohesive graphers face will become oto ph ck sto try us ind he “T y more ge, making business strateg as more innovations emer has reer in stock photography ca ful ess cc su A d. ate lic comp siness ination of creative and bu always demanded a comb outtheimage.com) talent. ” (Chris Ferrone, ab “Success wil l depend on whether ima look to the fu ge sellers are ture with op willing to en minds ra to the statu ther than be s quo. For th ing slaves o se who are w issues sales illing to add can get bette ress all these r."” (Jim Pic kerell, Sellin g Stock) CEPIC Conference | 4 June 2008 | Malta © Glückler The alliance disease Analyzing domestic sales partnerships in Germany 14 CEPIC Conference | 4 June 2008 | Malta © Glückler Alliance network of picture agencies in Germany, 2005 Alliance network of German based agencies N = 314 picture agencies Domestic alliance network in Germany N = 70 picture agencies 36 117 80 96 87 100 97 145 41 52 134 138 39 104 126 128 69 10 43 130 76 8 479 144 64 27 58 95 42 103 63 67 122 29 21 13 107 22 383 78 364 51 70 2 38 484 480 487 53 44 142 133 18 49 109 54 81 4 135 72 494 84 140 132 88 77 83 5 30 102 blue = international red = Germany 15 CEPIC Conference | 4 June 2008 | Malta © Glückler Growth of network size and number of alliances (1989-2005) Number of alliances Number of agencies 500 500 450 RM Unternehmen insgesamt RM Agenturen in Deutschland 450 400 RF Agenturen 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 1989 1991 1993 1995 1997 1999 2001 2003 2005 16 RM Allianzen insgesamt RM Allianzen in Deutschland RF Allianzen 1989 1991 1993 1995 1997 1999 2001 2003 2005 CEPIC Conference | 4 June 2008 | Malta © Glückler Network strategies – hypergraph analysis 36 117 80 96 41 52 134 138 8 144 27 58 42 103 63 29 21 13 107 22 5 30 102 17 64 95 67 70 International Universalists 10 130 76 122 New generation specialists 383 78 43 51 487 2 364 69 479 Established giants 53 44 38 484 Small & established 104 126 480 133 18 39 142 54 494 49 109 72 37 agencies founded: 1978 Universalists: 50% Photographers: 181 BVPA-members: 76% 81 4 135 128 • • • • • 84 140 132 17 agencies founded: 1979 Universalists: 44% Photographers : 46 BVPA-members: 35% 87 100 97 145 88 77 83 • • • • • • • • • • 6 agencies founded: 1998 Universalists: 25% Photographers: 33 BVPA-members: 35% • • • • • 10 agencies founded : 1981 Universalists: 75% Photographers: 247 BVPA members: 20% CEPIC Conference | 4 June 2008 | Malta © Glückler Sales partnership: yes or no? give take 18 Advantages Disadvantages • Focus on the product (Collections) and on its development • Multiplication of sales channels at lower marketing cost • Specialization • Losses from redistribution of income from royalties • Loss of market access, distance to the customer • Increasing dependence on distribution network • New competition in production • Increase of image stock (scale) • Complementarities of image stock (diversity) • Actuality of image stock • Control of market access at lower production cost (keywording, scanning) • Overlap and redundancy in image stocks between competitors, • price competition • Loss of uniqueness • Threat to agency profile and market reputation CEPIC Conference | 4 June 2008 | Malta © Glückler