The New York Times announced today that Getty Images is up for sale for $1.5 billion. As the leader for the past 10 years in the business of distributing images to the advertising and the media industry, this news is about to rock the industry.
The timing is rather surprising since the stock plunged 49% last year. “buy low, sell high” : they did not sell high – does Getty anticipate further hard times in 2008?
One has to acknowledge Getty’s CEO, Jonathan Klein, for his business savvy. He founded the company in 1995 and build it, through acquisitions and internal growth, into an $ 850 million business.
It is now under attack from new players promoting business models : microstock, user generated content, video distribution and internet TV, mobile growth. These models contribute to decrease prices of the images and increase costs – hosting and bandwidth for videos – affecting the Ebitda.
The observation applies to Getty’s main competitor, Corbis, owned by Bill Gates. Corbis has tightened its ship over the past few months laying off employees around the world. More layoffs are planned early 2008.
Lot’s of questions will rise from this announcement over the next few weeks. It certainly is a sign of the new landscape in this industry, confirming opportunities for the new players like Fotolia, iStock (acquired by Getty), or Eyeka which i founded in anticipation of some of these changes.