Corbis takes stock

Offering small change

According to a report by Bloomberg News Corbis Corp (owned by Microsoft founder Bill Gates) is proposing to restructure the company and adopt a new business strategy.  Apparently this is due to an accelerated decline in photo-licencing business, the downturn in which started in mid-2014.

The Corbis decline in their stock photography business mirrors similar reports earlier in 2015 about Getty Images' financial performance. It seems the competition for low-cost image licences from Adobe's Fotolia and Shutterstock is hurting both their revenues and profitability.

Corbis' Chief Executive Officer, Gary Shenk, will launching a new long-term strategic plan to support profitability. It will focus on arresting the decline in the photo-licencing business, the company's largest division, by focusing on premium content and core customers. It will apparently result in a  reduction of the Corbis workforce by around 15%. The new branded entertainment business has not delivered returns fast enough to make up for the downturn—the new strategy will also aim to accelerate the development of this venture.

Over recent years there has been consolidation in the photo-library market as Corbis, Getty, Shutterstock and Adobe have absorbed smaller competitors. It is now difficult to see  how much further that process can go without running into competition and monopoly challenges from the competition, monopolies and mergers regulators especially in the USA, UK and EU.

At this stage it is not clear what the new strategy will mean for existing Corbis contributors but one can expect it will probably result in some culling of those providing the more general material. In recent years there appears to have been a significant growth in supply of stock images, Alamy for instance has more than 60million on line. It was inevitable that at some point the apparent over-supply  would been force prices down. That pressure may have been masked, in part at least, by growing demand from Internet based publishers. If that growth has slowed or stalled then there will be a pressure on prices as the major suppliers vie for market share and seek to protect revenue. It is difficult to see a positive outcome for picture libraries providing generic stock photographs into such a market.

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