Jonathan Klein is CEO and co-founder, with Mark Getty, of Getty Images and the most influential person in the global stock photo industry. For fifteen years he led an aggressive acquisition campaign which positions Getty as the leading source of still and moving imagery as well as footage and music. He is a passionate believer in the power of the image to create change in editorial as well as creative photography. In this exclusive
CEPIC DAILY interview, he gives frank answers to some tough questions posed by Tweak founder Jerry Kennelly. It gives an intriguing insight into Getty as a privately held company and their vision for the future of the industry.
Q: How has Getty Images’ business evolved since it went private with Hellman & Friedman? Has the ethos or company changed?
| “Microstock has done many things – it has grown the market; it has enabled previous infringers or non-buyers to become buyers; it has found an exciting source of imagery.” |
JDK: The ethos, culture, priorities, values and focus of the company has not changed at all. We were publicly traded for twelve years and we have replaced a large group of shareholders who knew little about our business and were able to sell at any time with one majority shareholder who has lots of skin in the game and works with us to jointly build value.
They are extremely happy with the way the business is being managed and operated. They’ve supported several key strategic investments that have helped to build our business for the long term (for example, Jupiter Images and Rex Features); they have allowed us to make significant increased investments in technology and have been supportive and helpful board members. It is worth noting that there have been no management changes in almost two years since the transaction and we have navigated a pretty tricky environment rather well. In fact, we have come through the very challenging economic downturn in better shape than before.
Q: Does Hellman & Friedman have a plan for exit – is it likely that Getty Images will IPO again or is it more beneficial for shareholders to run it as a private company?
JDK: When a private equity firm takes an investment in a business, it becomes inevitable that there will be an exit at some stage. That is the way the private equity world works – they invest at a certain price, hope that the business gets better so that they are able to sell at a higher price. We are no exception. At this stage there is no exit plan and we are currently leveraging the positives of private ownership.
Q: iStockphoto has been an incredible success, but wouldn’t it be true to say that both it and the other microstock agencies have reduced the price of imagery to the point where it’s difficult to justify making a commercial decision to invest in anything but the most simple new images?
JDK: It’s no secret that iStockphoto continues to be the fastest growing part of our business. Its brand and market position, particularly with designers, allows us to broaden the product offering to this ever-growing customer segment.
Like royalty free before it, microstock has done many things – it has grown the market; it has enabled previous infringers or non-buyers to become buyers; it has found a new and exciting source of imagery; it has put dollars into the hands of thousands of photographers; it has made it easier for people to use imagery. These are all very good things. Furthermore, there has been way less cannibalization of the existing business and models than had been anticipated. The overwhelming majority of the iStockphoto customer base consists of business with fewer than ten employees – many of those had never licensed an image before. Getty Images customers represent a small percentage of the iStockphoto customer base. It’s very clear that we are providing different products and services to a rather different and new customer base.
Turning to photographers, there is no doubt that it is becoming a tougher and more competitive business; yet, at the same time, photographers have many more places to put their imagery for licensing. Photographers who contribute to Getty Images and to iStockphoto make marketbased decisions about how much to invest and also what kind of imagery will provide them with their best return on that investment. This has always been the case.
Q: Digital SLRs are now delivering an amazing new standard of cinematic quality video. Do you think that this looks like a great new content opportunity ?
JDK: Of course. When content creators can produce both high quality imagery and video with less cost, the opportunities are significant. In fact, we have seen an increase in the number of contributors who create with both mediums already.
Just remember, though, that the better the equipment, the more competition there will be for photographers. A Pulitzer Prize winner once told me that twenty years ago it was extremely difficult to shoot a good photo and one only took a few great photos in a lifetime; yet now, thanks to the amazing cameras, lenses and software, almost anyone can produce a reasonably good image. It is still very hard and takes a special talent to produce a great or iconic image.
Q: How important a part of Getty Images long-term strategy are image partners or master delegates as you like to call them? JDK: Working with both Image Partners and Master Delegates are equally important as part of our long term strategy. It is our ongoing commitment to provide visual communicators with what they need when and where they need it.
Through our distribution partnerships with well-respected image partners such as Discovery Channel, Time & Life Pictures, Universal Studios, among others, Getty Images offers the best and broadest collection of still imagery and footage of anyone in the industry. Their quality content compliments our own house collections, providing customers with the freshest, most relevant content. Image partners have become more and more important during the course of our history and provide more and more of our imagery – still and moving.
| “We’re optimistic that there is a lot of room for growth. The market for imagery has expanded into online and digital outlets.” |
In some countries, we rely on our network of Master Delegates. These delegates, who share both our global best practices and processes, are representatives of Getty Images’ collections in their assigned territory only. It should be pointed out that throughout our 15- year history, direct sales have always been our primary route to market and delegates, the channel or agents have always been less than ten percent of our revenue. This is still the case today.
Q: Under your leadership, Getty Images has diversified into news, sport and music, but in general you’ve stuck to the knitting. Is this strategy likely to continue?
JDK: For good or bad, Getty Images has never been under the leadership of anyone else and I have a core belief that one should focus and stick to what one knows and diversify at your peril. This strategy has stood us in very good stead. It has also meant that we have been able to seize opportunities early and often in our industry as we think, live and breathe it all the time. We saw royalty free and its potential early and the same happened with microstock. We also saw that there was a big opportunity in editorial imagery. We have always wanted to be the complete picture partner for our customers and have simply expanded on that to a logical place, namely, other digital media for our customers, for example music.
Q: What’s your estimate of the size of the creative asset user marketplace and the value of the spend today?
JDK: This is a time of rapid evolution in the creative imagery field, and though we won’t share our detailed analysis of the market with you, it’s fair to say that we’re optimistic that there is a lot of room for growth. The market for imagery has expanded from traditional advertising and marketing into online and digital outlets. With these new platforms, come new customers and we will continue to work to meet their needs. Jerry, you were in the business and you know how hard it is to size the market. I will give you two snippets – first, the market has always proved itself bigger than anyone had thought and, second, five years ago, we licensed 1.5 million images in a year, while last year we licensed more than 22 million images in a single year. Who could have guessed that the market was so large?
Q: Is this now a mature industry where prospects for (in revenue at least) are slim?
JDK: The market is evolving and expanding to include more image users every day. If you offer them the right products at the right prices, and help them to understand how to license and use the content properly, the possibilities are endless. This is certainly not a mature industry; however, it is and always will be somewhat cyclical, just like the customers we service and we have not, as an industry, had help from the economy in some time. When the economy improves, even modestly, we will, as an industry, once again, prove that it is far from mature.
Q: Alamy have recently announced that they’re entering the news business. Are you concerned that this space might be likely to get more crowded?
JDK: No, it’s healthy to have competition. The news industry is another marketplace that is changing, which creates opportunity. It is not easy and it is very different from stock. It takes longer to reach a critical mass and the customers have very different requirements and expectations.
Q: You’ve recently announced a partnership to re-sell the Sky News news video content. The Press Association and others are offering video clips from live news events. Is Getty Images likely to start offering this service as part of their news and sports coverage?
JDK: For the time being, we will continue to distribute news footage, making it available to the larger marketplace 24 hours after it has first aired. We’ll leave the “live news” clips to the news broadcast outlets.
Q: When do you see video assets outpacing the sale of stills?
JDK: As customer bandwidth expands and new platforms emerge, the use of footage will undoubtedly increase. However, if there is one thing I’ve learned over the years it is that iconic images endure. I think that it will take a very long time before we generate more revenue from footage than stills. A very long time indeed.
Q: What do you see as the biggest threat to the industry?
JDK: The biggest threat is the idea that all content should be free and that content creators don’t deserve to be compensated. We will continue to fight for content owners to be properly compensated. The pendulum is swinging again in our direction as many businesses have discovered that an advertising only model is neither effective nor sustainable in the long term.
The changes in the media industry, which of course are affecting our customers and therefore impacting us, continue to be a challenge. We’re all waiting to see whether the media companies, who are all experiencing customers consume more media than ever before, can figure out effective ways for their content suppliers and themselves to be paid appropriately.
Q: And the biggest opportunity?
JDK: Where to begin? We see opportunity everywhere! New image users, new technology, new ways for people to consume and enjoy media. You can either be pessimistic or optimistic in times of great change, and we are very optimistic that new markets will continue to unfold for all of our products and services. Our optimism derives from experience. We have always flourished in times of change and our culture thrives on it. It is not easy but is invigorating and leads to better answers to questions.
Q: Where will future growth be concentrated, developed markets or Emerging in particular BRICs (Brazil, Russia, India and China).
JDK: We will continue to focus on selling all of our products to all customers in all parts of the world. Certain BRICs will remain less than optimum for intellectual property businesses for reasons that I need not explain to this audience,
Q: Are lower prices inevitable?
JDK: When we can add value to the product, in terms of making imagery more accessible and usable for customers, a wider range of prices is inevitable. We are still achieving similar prices for certain uses and for certain collections and products that we did many years ago. However, we want to grow the market and that inevitably means looking after folks with smaller budgets.
Q: What if anything would Getty Images have done differently 10 years ago armed with what they know now?
JDK: I tell my team that anyone who has ever had to make decisions has made many wrong ones. I also stress that we learn from mistakes, and move forward. We certainly paid you too much for your business and I would not pay anywhere near as much now.
At the end of the day, looking back and wishing you would have done things differently, doesn’t help where you are today. This is why I choose to focus on opportunity and growth that exists in front of me.
I am extremely proud of where Getty Images is today and how we’ve evolved in the past 15 years. We’ve worked hard to anticipate trends, provide our customers the products and services they are looking for and create a respectful workplace for all of our employees. We have a great team, a wonderful culture and love our products and customers. That is not bad, is it?