How Getty Is Killing the Stock Photo Industry

PhotoShelter tell it how it is…

When we created the PhotoShelter Collection, we aimed to change the face of the stock photography industry by fundamentally altering the dynamics of how photographers were treated, and in turn, providing visual diversity to buyers that simply didn’t exist. Tens of thousands of photographers from over 130 countries signed up and started uploading their images to PhotoShelter, and the buyers have followed. Each month we have stolen sales with major clients away from Getty and have become an increasingly large thorn in their side.
So it’s flattering to hear that Getty Images is validating our approach and recognizing our success by reaching into the flickr community.  No other competitor in their history has forced Getty to change their model. This is a great sign of encouragement for us. Getty’s CEO Jonathan Klein describes this new endeavor as “the best imagery from a fresh collection of high-quality images chosen by us from Flickr’s diverse and prolific community.” If it sounds familiar, it should be, something very similar is printed on our homepage.
But rather than compare lexicon, let’s clarify some of the key points and differences of this announcement.
Klein stated in a Seattle Times piece that the deal “for us is not significant, but it’s strategically extremely important.” Flickr GM Kakul Srivastava corroborated this by saying, “From our perspective, on the Flickr side, we’re not expecting this will be a huge stream of monetization for our members…The relationship, in the licensing piece, is purely between the photographer – the Flickr member – and Getty Images itself.”
So, if it’s not really about making money, what is it about? Why would the market leader (which is now held by a private equity firm whose sole goal is to make money) strike a deal in such a public fashion if they didn’t intend for it to make money? Why would flickr consent to not taking a transaction fee? What is of such “strategic importance” to Klein?
The answer is in Getty’s historical moves. It’s about locking out competition from the industry to ensure a continued, virtual monopoly. Getty pays flickr for an “exclusive” deal to be their preferred stock content distributor because they are threatened by an open platform like PhotoShelter. Consider that if PhotoShelter succeeds, not only does Getty lose market share, but they invariably will have to give back more of the profits to photographers because they will need to compete for content.
As much as Getty would like to position this move as an open embrace of the community, it’s not. Instead, it’s a way to lock out competition, and allow them to continue with status quo. They’re hopeful that this infusion of content can somehow staunch the flat/declining growth of their traditional licensing revenue, and why not? Their growth has historically been predicated on acquisition of boutique agency content until they bought virtually everyone up, and alienated thousands of photographers and buyers in the process.

In this new deal, Getty Images will hand-select photographers from flickr, and tie up their images in their standard exclusive agreement and compensation schedule. This means 20% on royalty-free images, and an average 35% on rights-managed images. It also means the individual cannot determine which images are submitted, nor set a price point or the license type. Exclusivity means that the individual cannot determine the best distribution channels for his/her images.

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