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 )
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© 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
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http://www.luminous-landscape.com/essays/micro-payment.shtml
© 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“
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http://www.stockasylum.com/text-pages/articles/a5sp052007-jup-loss.htm
© Glückler
Reorganization 1: Specialization on core competencies

The production agency
–
–
–

The sales agency
–
–
–
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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
© 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
© 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%
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–
–
–
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
© 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
–
–
–
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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)
© 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
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www.Alexa.com . accesed 18.5.2007
© 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
© 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
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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
© 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
© 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)
© Glückler
The alliance disease
Analyzing domestic sales partnerships in Germany
14
© 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
© 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
© 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%
© 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
© Glückler