A cracked Egg

Jeff Kravitz (no, that is NOT him on the picture above), President and Founder of Filmmagic, bought by Getty Images in the $200 million Mediavast deal, has officially resigned. Citing impossible working conditions within the Mega image distributor, antiquated distribution system, one of the most succesful, and influential, red carpet photographer is slamming the door in the face of the Getty management.

In the wake of the Mediavast acquisition, past competing photographers find themselves using the same resources to distribute to the same clients, diluting their offering in a sea of similar images. However, not all photographers have the same agreement, making some quickly loosing revenue. There has already been photographers defection since the acquisition and many more are on the way. At this rate, Getty faces the risk of, once again, creating its own competition by allowing former photographers to create new, lean and mean, photo agencies. Klein has a legacy of failing to successfully integrate celebrity photo agencies as seen with Online USA in the 90’s and ImageDirect in the early 21th century. Is history repeating itself ?

With a share scheduled to drop and stabilize at $23.00, the arrogant leadership is facing a much bigger challenge here than the microstock rise . As much as microstock remains a subset of RF, as much as celebrity images is the faster growing, most powerful engine of growth in the editorial market. Jeff Kravitz has been instrumental in the growth of Mediavast and his departure is a great blow, especially if he decides to create his own new competing agency.

There will be more defection in the next few weeks and months, as predicted here.

Seamlessly subtle

September 18, 2007 by pmelcher.

In France, and maybe in other European countries, there is a new marketing initiative, that mostly seem to affect food and other imported goods, called “equitable commerce”. Having been “Green” and “Eco friendly” for a long time, probably before Al Gore was born, the French companies, most certainly as a reaction to the Big Bad Greedy US corporations, have launch an initiative to properly compensate their suppliers.

As an alternative to the mass produced, worker exploited products, where labor is crushed to accept unfair low wages, especially if they live in third world countries, “equitable commerce” products divide the proceeds of sales equally and thus help in the development and growth of small local industries. Socially correct and morally responsible consumers pay a bit more ( think health food in the US) while knowing their money will help a lonely local farmer somewhere in the forest in Sri Lanka to make better tea. A happy worker makes for a better product. A concerned consumer makes for a happier customer. The company, suddenly becoming a social conduit between the have and have-nots, is regarded as powerful agent of positive change.

You want to change the world, buy an “equitable commerce” labeled product. You will no longer help a greedy corporation get filthy rich but your money will go directly to the supplier, who will finally make enough money to avoid destroying the environment or use cheap but highly toxic ingredients. What the company looses in commissions, it gains in higher prices and hopefully, volume of sales.

The corporations of the photo industry (Corbis, Getty) seems to have taken the opposite approach in trying to squeeze out the most out of their suplliers. After all, there seems to be an unlimited amount of photographers out there, only confirmed by the recent explosion of week-end hobbyists brought forth by file sharing sites and other microstocks. Reducing their supply force to an under compensated, unhappy, debt ridden army is very Wal Marty of them, but also maybe very past century. History has shown that the business model of the Robber Baron is bound to failure ( see 1929). Socially responsible companies creating a generous working environment (think Google) generate the most creativity, thus the most profit.

Just think : A photo agency that would return a higher commission under the condition that some of the money has to be reinvested in the photographers business, thus forcing greater creativity ? Higher licensing prices to help create better content ?

Getty Images is cutting the wood off its foundation to build the higher levels. It is feeding on itself to aliment its growth. By squeezing revenues from the same photographers that were responsible for it phenomenal growth, it is choking its roots.

Istockphoto expansion might be more internal to Getty existing client base than we know, ripping away juicy profits from its mother company from within, like a nasty virus. The last great acquisition, Mediavast, has suddenly overcrowded its celebrity offering from within, internally deevaluating it. It has created an unfair balance of commission rate that sit at 70/30 on the high end (see Contour) to the 30/70 at the bottom ( see scoopt.com). Already, valuable staff photographers are quitting, to escape the unbearable and unfair working conditions. Soon, we should see the same with contributors, if Getty keeps its pricing schemes.

There is profit in fairness. There is something to be said about “equitable commerce“.

Don’t cry for me VISA

Quite an interesting year at Visa with the usual crowd of agencies, photo editors, hopeful photographers and peddlers. Good to see new agencies born, like Noor, or Facetoface France, an expansion of the already very successful agency Facetoface in Germany. As usual and in the perfect spirit of Perpignan, a lot of noise and alcohol was shared over the hopeful success of newborn Noor agency while in the back alleys of the city and the Palais, whispers about their foretold failure could be heard over and over. We wish them luck.

Behind the triumphant press releases and conferences, booth shinning like brand new cars, smiles of success, the action, the real action was at micro level happening at different parties, dinners, lunches and informal get-togethers. VISA really happens behind the scenes, a bit like a theater. For example, Getty, had some very high placed executive talking about its eminent doom. Not the way regular photo agencies are doomed, when spending exceeds revenue. A Wall Street doom where the stock collapses into oblivion. According to insiders, Getty cannot grow anymore, at least as it did in the past past years. It will never reach the 1 Billion revenue dollar mark and, while still growing, it will forever be stuck underneath the double digit growth.

The stock market doesn’t react well to aggressive growth companies that have reached their ceilings and flee in masses. It will be fascinating to see how Johnathan Klein will try to handle this predicted downfall. Obviously, the $49 flat fee for web usage is an example of their reaction.

Lots of photographer’s platform solution in Perpignan. From the well known, like the all in black Drr to newer, european based, ones like Pixoclok, PitcureTank or Fedephoto. All our doing quite well in the footstep of the original creator, Alamy, who shined by its absence. The eternal battle between having or not having a photo agency seems to continue, although the line between these service providers and traditional photo agency is still a little bit blurry.

EPA, who was created in reaction to the Getty/AFP deal is expanding its relationship with Corbis, as to cement the idea that it will do anything opposite of AFP. AP is also expanding very quickly and, although I am not at liberty to say, has extremely effective plans to bite back.

VISA has always been the vanity fair of photojournalism with its stars and celebrities and this year it hasn’t changed as you could see Tyler Hicks and Spencer Platt, two great photographers, making fools of themselves in front a TV reality show cameraman following their every steps. In complete contrast, late one evening, or early morning , as I was leaving La Poste cafe, I accidentally stumbled upon a group of some of the best photojournalist alive, hanging out, far from the noise and fanfare of the festival. Laurent Van der Stock, Noel Quidu, Gary Knight, Laurent Sola, and many others where enjoying each others presence, joking and laughing around a beer, surrounded by a few photo groupies, like a bunch of rock star after a world tour. They let their images be the celebrities.

There will be a lot of upcoming surprise in the editorial world in the next year. They will not be announced neither in fancy press releases or endless parties but rather executed silently . Most agencies, and photographers, do not care about self promotion as much as they care about bringing to the market the right content.

Finally, as I left the Palais des Congres, on the last day, as everyone was packing up, it was quite amusing to see that a traveling puppet show had been installed in front of the main entrance. As if the show continued after all the pros had left, only this time it was for the children and the story had a happy ending.