End of the mega-photolibrary? Corbis breaking up?

Demolition

Back in November 2016 we commented on Bloomberg's report of major strategic changes being planned at Corbis. According to a brief teaser by Jim Pickerell on Selling-Stock.com those changes are imminent, and seem wider ranging than most would have expected. Time will tell.

It has been widely reported that Getty has been burning through its cash pile in the last year and now Bill Gates' Corbis is facing fundamental change. Is this the beginning of the end of the mega-photo library? Or at least the demise of those based on the traditional macro stock model—like Getty and Corbis.

Getty and Corbis have been swallowing up the second tier of libraries for many years, presumably with the aim of building market share and a critical mass to build or maintain profits, or at least to bolster cash flow. If reports are to be believed it has not worked. Their dabbles in micro-stock do not seem to have stopped the decline.

They now have the bigger micro-stock based libraries snapping at their heels. Shutterstock, too, has been buying up established second tier libraries (Rex for example). They have grown their market share rapidly in recent years and seem to be continuing to do so although we do not know whether it is or working or at what cost.

So what will it mean for the stock industry if Corbis is broken up as Selling Stock suggest? Getty presumably would not be allowed by the competition authorities to buy much if anything of Corbis. Getty are already a dominant player in the market and would have much reduced competition if Corbis as we currently know it is dismantled. It is also possible that Getty simply would not have the money, or the will, to make a major acquisition in any case.

Shutterstock may be getting to the scale and complexity that may have contributed to the apparent downfall of the Corbis-Getty duopoly. There are few remaining libraries, like Rex, which have a long history and a valuable archive that would make them attractive to Shutterstock or their like. One suspects that there is not much value in the client book of most libraries that would be of interest to an existing major library; there is probably considerable overlap already.

So what will this mean for photographers, especially the full time and serious stock photographer? In the short term it may actually create more sales channels if Corbis is broken up unless those multiple new businesses are bought up or coalesce in some other way. With Corbis out of the market the remaining big libraries will possibly increase their market share and be on the radar of the competition authorities in the US and the EU. So they may be limited in being able to grow by acquiring what is left of the second tier.

But can that second tier survive if the big players like Corbis cannot? Smaller operations may have administrative costs that are more manageable but unless prices, or volume, increase there must be limited opportunity for growing profits. Anecdotally, many would be happy just to maintain a positive cash flow.

Interesting times. We have seen similar things happen before in other industries. In the UK banks and others bought out local estate agents to build national chains. It worked while there was a property boom and then it collapsed. Many of the big chains pulled out of the market, sold off branches or those who had made money by selling their local agencies started up afresh. A similar process took place in book publishing and it may have started again as new technologies allows smaller publishers to compete.

Are we about to see the return of the niche or specialist photo-agency using a new model perhaps with a new business model enabled by technology? Time will tell, as photographers we live in interesting, if not especially rewarding, times.

Comments

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David Hill (not verified) on Wed, 20/01/2016 - 15:52

Interesting analysis. Normally, one would think that a smaller number of players in the market would mean each player has greater opportunity to increase prices - and that could only be a good thing for photographers. But somehow I can't imagine that happening! At the top end of the market it feels like there are few players - I recently looked at a selection of newly published texts and found that the majority of photos were supplied by Alamy, Getty and Shutterstock (or museums, galleries, companies etc). So I suspect that it's Shutterstock that's keeping the prices down; I doubt that most of those books would have the half million initial print run that would require an extended licence! And at the bottom of the market there are still a number of micros. 

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