We are witnessing a wholesale transformation of the market for photographic archives or “stock photography”—the sale and distribution of pictures for newspapers, advertising agencies, graphic and television agencies. The market is worth $1 billion and has an annual growth rate of 10-15%.
The protagonists in this revolution are the internet and two entrepreneurs, Bill Gates and Mark Getty, engaged in a battle for supremacy in the market. The first is the founder of Microsoft, the IT colossus, the second, heir to the Californian oil dynasty.
In 1989 Bill Gates founded Corbis, the company that now owns the huge picture library, the Bettmann Archive, the Hammer Leonardo Codex (purchased in 1995 for $30 million) and nearly four million images, including the rights to the digital diffusion of works of art from some of the most famous museums in the world.
Having given up a career as a banker in London, Mark Getty grasped the opportunities that he sensed were offered by a fragmented and still unsophisticated sector, founding Getty Images with a friend in 1994. Over the past few years his business has grown rapidly and a series of shrewd acquisitions has made it the largest operation of its kind.
Getty Images possesses an archive of more than thirty million pictures, fifteen million of which are in the Hulton Getty Archive (pre-dating his acquisition of Hulton Deutsch in 1996).
Other competitors in the field are Kodak, number two with English companies Image Bank, and Visual Communications Group. Bill Gates’s Corbis owns a vast archive but has not yet developed its distribution network sufficiently: in sales terms it is probably not even in the first ten.
From agencies to archives
In the 1970s photographers who worked on commission for news or advertising agencies began to build up small archives, specialising in particular styles or subjects. In the 1980s the first big general agencies brought about a consolidation process in the sector and nowadays enormous archives are concentrated in the hands of the few surviving names.
Thanks to new information technology, which gives access to millions of consumers, photographic archives represent a source of income the scope of which is still difficult to estimate. In the words of Jonathan Klein, co-founder of Getty Images, “If in 1997 our active client base was 120,000, we are now talking of a potential growth over the next few years of tens of millions of customers accessible via the internet.”
Technological developments have brought about a sharp increase in the number of products and customers, and a drop in distribution costs. “The development of the internet reminds us that in about seven to eight years time 90% of images will be distributed digitally, over the net”, says Mark Getty. “Our sales growth is running at about 20% per month.”
All this adds up to greatly increased speed. The average time taken for a traditional transaction is ten days to two weeks. The client telephones the archive, who send him (by post) the pictures or the catalogue; he chooses from thousands of examples; negatives or transparencies are then sent, contracts are made etc. In a few years time all these transactions will be instantaneous.
Companies that use photographic material to embellish their internet sites are already “consuming” thousands of pictures; they see them on the net, choose them, pay for them and download them directly from the net. The speed of change and the capacity of the new channels to adapt to new methods of distribution differs widely in different sectors.
Newspapers and advertising agencies have been using information technology for years and are fully aware of its efficiency and speed. Publishing houses, on the other hand, often employ picture researchers who go to libraries to choose illustrations for school books, for example, or encyclopedias, and are much less eager to make the great leap forward.
Why has the internet become a viable alternative to the old fashioned method of researching pictures?
The internet has been familiar to us all for the last five or six years, but 1997 and the early months of this year seem set to witness a positive explosion of sales.
Recent figures from Forrester Research (Cambridge, Mass.) indicate that in the year 2001 the internet will generate more than $200 billion of sales, compared with about $22 billion in 1997. In November and December 1997 monthly sales rose tenfold in the US compared with 1996.
Other figures also provide clear evidence of the way the internet is spreading; the number of PCs connected to the net increased by 49% in 1997 in the USA (reaching about 25.7 million). The number of e-mail messages doubles every six months (AOL, America on Line, one of the e-mail servers, conveys 21 million e-mail messages every day); the site most visited on the internet, Yahoo (an Internet search engine), receives 38 million visits—or “hits”— per day.
It is calculated that 40.9% of families in the USA today possess a computer (up from 35.2% at the end of 1996), and the number of computers in the world, estimated today at 200 million, is set to increase by 500% to one billion over the next six years. Clearly the idea of creating a huge volume of sales over the internet is more than mere fantasy. The question is how to do it?
The type of merchandise most suited to internet marketing is standardised “boxed” merchandise that can be bought unseen.
The market for books is a typical example—www. Amazon is a virtual bookshop which sells exclusively over the internet. It has met with such success that Barnes and Noble, the biggest chain of bookshops in the world, has been forced to imitate its tiny rival and open a web site.
Flowers, CDs and even cars are other examples. In Stockholm 800,000 families can now telephone over the internet at half the cost of normal phone calls.
Picture distribution (whether photo or film) has been overwhelmed. The physical distribution of negatives transparencies or catalogues of pictures is now done via cable, from computer to computer. Archive pictures are digitalised by scanner (a sort of photocopier)—translated into a numerical code that can be read and saved in the memory (or on CD) then transmitted via the telephone or even by satellite.
The process is very expensive, costing an average of £7 ($11) per picture, and prices rise according to the size of each file.
An archive containing one million items would require an initial investment of around £7 million ($11.9 million). Once the archive has been created, efficient search mechanisms have to be developed. The images are linked to “Keywords”, which refer to precise categories, so that, for example, if someone is looking for pictures of political figures of the inter-war period, that person should be able to find the largest number of interesting pictures in the shortest possible time.
Of the thirty million pictures owned by Getty Images only 1 million have been digitalised so far. Of Corbis’s 20 million images, 1.3 million have been digitalised. These include a large proportion of the paintings in the National Gallery, the Hermitage, the Ansel Adams archive and Leonardo’s famous Hammer Codex.
The huge outlay required for this initial digitalisation of the archives required personalities with the resources of Mark Getty or Bill Gates to take it on. However, once the images are on the net, copyright from sales generates income and the costs per transaction are minimal.
The Getty group, with a gross margin of 62% (1997 figures) shows just how profitable this sector can be today. Unlike Getty, Corbis is not quoted on the Stock Exchange and it is therefore impossible to obtain detailed information about the company.
Corbis and Getty Images have hitherto pursued different strategies.
Corbis has chosen to address a large range of consumers—it has a “consumer oriented base”—while Getty Images has addressed a more specialised, more demanding market, serving the top end of graphic design in a “service oriented environment”.
For years Corbis has failed to build up its distribution network and it is now striving to make up this deficiency. Getty Images already has 250 agents in seventeen countries, receiving more than 5,000 telephone calls per day. In 1997, the turnover of Getty Images was $100 million, a growth of 19%. Judging by the number of technicians developing new digital platforms and improved search facilities (from ten in 1997 to forty in 1998), Getty’s investment in the internet has quadrupled.
Over the last three years Getty has acquired Tony Stone for £3.5 million, an archive of one million photographs plus a distribution network), PhotoDisc for $200 million—the number one royalty-free internet distribution network (unlimited use for a single payment), Energy Film, a film library and, recently, Allsport and Gamma Liaison, agencies specialising in sport and photojournalism.
As far as prices are concerned, Corbis has a large number of private clients and sells at a fixed price of $20.99.
Getty’s clients are professionals—journalists, the world of film and television, advertising and graphic design, and each price is negotiated (according to print run and exclusivity), running from hundreds of dollars for Allsports to an average of $400 for Tony Stone. PhotoDisc (digital images only) has two or three different prices based on size.
Recently Getty Images has entered into an agreement with Hewlett-Packard (the calculator and printer giant, a colossus about the same size as FIAT); now every Hewlett-Packard printer will be directly connected to the PhotoDisc internet site so that images can be bought and downloaded directly from the digital archives of Getty Images.
Museums and the internet
Getty Images has been approached by a number of museums wishing to digitalise their collections and thereby to make money from the sale of reproductions over the internet. Many of these institutions are in serious financial trouble and they hope that an archive of digitalised images could help to finance their activities. But Mark Getty is not convinced that their initial investment would ever be paid off: “The market is very selective, not everything put on to the net is in demand. It would be foolish for a museum to digitalise everything in its collection. But this is what they are asking for—I suppose it’s the museum mentality. They are used to preserving everything for future generations, but we are more interested in consumer demand, consumers make their own choices.”
Getty Images opened the Hulton Getty Picture Gallery, specialising in historic photographs from the Hulton Archive, in London in 1997. The gallery has already held four themed exhibitions of modern replicas taken from the original negatives printed on two types of paper: limited numbers of top-quality gelatine silver prints and series of up to 300 resin coated prints which are sold at prices ranging from £50 to £250.
Similar galleries are planned in New York and San Francisco, followed by Paris and Milan. The gallery publishes a catalogue (2,500 pictures, £6.50) and it is possible to obtain prints on special subjects.
In Mark Getty’s words: “With the integrity of the product uppermost in our minds, we are trying to transform what has hitherto been a collector’s market into something much more comprehensive. The prices of ‘vintage prints’ are set by a handful of galleries and have become extremely high.
We do not sell old photographs but we occupy a middle ground, somewhere between the originals and the more commercial reproductions. The cost of producing quality prints that are faithful to the originals is not very high, however, so we are able to sell excellent copies at reasonable prices to a less specialised public.”
Getty Images: http://www.getty-images.com
o The website for the Museum of Modern Art in New York (MoMA) has been voted “best overall site” at the Museums and the Web conference, held in Toronto in April and organised by Archives & Museum Informatics—a Pittsburgh-based cultural publishing consultancy. With an estimated 1.2 million users in 1997, visits to MoMA’s website are fast approaching actual museum attendance (1.65 million in 1997). New features of the site include a section for the museum’s architect selection process and upcoming expansion. Another new section is devoted to Web-specific artists’ projects commissioned by MoMA curators. http://www.moma.org
o The newly opened Digital Museum of Reconstructions uses high resolution computer modelling technology to recreate ancient architectural complexes. At present the ancient Propylaia by the architect Mnesicles—the monumental gateway to the Athenian Acropolis—is the only completed site, but the accuracy of the architectural detail reproduced in millimetric precision is well worth a visit. The completion of the Propylaia is the first stage in the reconstruction of the entire Acropolis, a collaborative project between the Digital Museum based in New York, archaeologists at Princeton and the Greek Ministry of Culture. Other reconstructions under development include: “Zangdok Palri, the copper mountain temple of Tibetan Buddhism”; “Pre-historic earthworks of North America”; and “The Pyramid Complex of Senwosret III”. http://www.digitalmuseum.net
o This month the Philadelphia Museum of Art launches a new exhibition devoted to Constantin Brancusi on http://www.philamuseum.org/pogany/. The exhibition, designed by Anthony McCall and Hank Graber of New York-based company, Narrative Rooms, allows users to walk through five rooms, and around Mlle Pogany I and Mlle Pogany II, sculptures created by Brancusi in 1912 and 1931, respectively, which are in the museum’s permanent collection.
o The Dia Center for the Arts in New York has been awarded the third annual Global Information Infrastructure Award for Arts and Entertainment (GII) for its ongoing series of artists’ projects for the web. The GII awards are presented to organisations or individuals working with the Internet who are deemed to have produced “extraordinary” results. Dia has commissioned artists, such as Claude Closky, Cheryl Donegan, Susan Hiller, and Tony Oursler, to produce work specifically for its website since 1995. http://www.diacenter.org
o Last chance to see a 3-D computer reconstruction of an Egyptian mummy at the National Museum of Antiquities in Leyden (until 7 June). The mummy of a girl who died in Thebes in 109 AD was scanned by Philips Medical Systems using a Computer Tomography Scanner.
o Meanwhile, mummies also continue to fascinate at the Art Institute of Chicago. Following last year’s inauguration of “Cleopatra: a multimedia guide to art of the ancient world”, the museum has been tracking the most popular visitor sites on this interactive touchscreen tour of ancient Greek, Roman and Egyptian works from the collection. Of these, the most popular is the museum’s mummy and the two most popular videos are “Who is inside this mummy case?” and “How were mummies made?”
Originally appeared in The Art Newspaper as 'Empire building'