Getty-Images appears to be having trouble getting sold for $1.5B, according to an article in The New York Times today. Perhaps the 40+ investment banks on Wall Street and an equal amount of large private companies that visited our website took our Puffer Fish analogy to heart.
So what could be done with Getty-Images? The problem with finding an acquisition partner is Getty-Images’ hybrid business model. For a technology acquirer, the services business with staff photographers is a burden they will not want to swallow. On the flip side, very few other services companies than perhaps the Associated Press can find solace in the photographer factory that is an integral part of Getty-Images.
1/ Buy company at a decent value
2/ Separate content producer business from content distribution
3/ Privatize each
4/ Sell content production business
5/ Revamp content distribution
ad 1/ To establish a fair price I am eager to see the operating plan metrics separating content production from content distribution to find out to what extend both lines of businesses have suffered from being under one roof (there may be some opportunity hidden in there)
ad 2/ Content production is a business model that, in today’s world, needs to be separated from distribution. With the internet in place as the conduit for the distribution, very few companies can still afford to compete with the content produced by a “free-market.” There is some remaining value left in the production of “premium” content for a “premium” audience, in the same way, the Associated Press can provide this service to a confederation or co-op of newspapers.
ad 3/ Build companies that focus on what they do best, one produces content – one distributes it. Not within a single company or P&L or board. Each with its own growth trajectory.
ad 4/ Just like in the “premium” production of news articles (where bloggers compete), the news media will require a “premium” production of editorial photographs that have some trust associated with it. Perhaps a deal can be struck with AP – or a new version of AP can be created with identical goals. Getty-Images already has established a large installed base of agencies who can lease resources on a subscription basis.
ad 5/ Long term, content distribution is where the money is. The Long Tail of photography is massive, much larger in total image exchange than any Super-Store will ever be. Thanks to the Internet. But to build an effective free-market, a core of premium supply is needed to create its initial pull, Getty-Images certainly has that. To make this new company a winner, though, it needs to truly support free-market principles, something very few companies can pull off.
We’d be happy to assist in the assessment of the Getty-Images acquisition value along the lines of the aforementioned strategy and even more in the post-acquisition execution. Our passion for photography, the ever-increasing reach of the internet, and the value produced by all photographers around the world create a fantastic new opportunity.
