Shutterstock and the End of Getty Images
By all accounts Getty Images who is owned not by folks with a passion for photography (but basically bunch of accountants) will see its market share erode daily from now on given the explosive growth of Shutterstock. Jon Oringer who is a kid who just happens to love photography (and happens to be very smart) started one of the first photography subscription services that essentially shook a decades old highly profitable photo stock industry to its knees. (Shutterstock is now valued at 2.5 billion and growing rapidly). The old equation was that pro photographers could make a very good living selling images through Getty or Corbis web sites working in tandem with their editors to make sure the right images were being made for the market place. It takes a village to make a great stock image as its both a conceptual problem coupled with eye catching content. (Yours truly made Getty Images around 4 million over the years I was working with them). Microstock destroyed this profitable Industry by driving prices down to absurdly low levels that were economically impossible to compete with for any pro photographer with an actual studio/business overhead. At this point the big players have only one choice:
Buy Shutterstock or face getting eventually run over.
What I have never understood about the business decisions in the current stock industry playbook is what industry constantly undercuts and devalues its products from $500 to a $1 sale per unit. The diamond industry for example could flood the market and give us very cheap diamonds. They don’t for a very good reason…
“The emergence of microstock—the low-priced, generic images that customers don’t want to shoot themselves—knocked the photo industry on its heels. Shutterstock and a competitor, iStockphoto, were selling images that once cost $500 for $1. Incumbent Getty Images ended up acquiring iStockphoto for $50 million in 2006 and then took itself private in 2008 at a 65 percent discount to its pre-creditcrisis high. “All the trends line up with what Jon’s doing today, but he saw it when others didn’t—he saw it 10 years ago,” says Jeff Lieberman of Insight Venture Partners, which invested in Shutterstock in 2007”.