Shutterstock is challenging Getty Images’ dominance as the world’s biggest distributor of high-fashion and entertainment photos after striking a deal with the owner of Hollywood trade magazine Variety.
The New York stock photo service, which has a market value of $2.2bn, is forming a partnership with Penske Media Corporation to distribute images and video from events such as the Academy Awards and designers’ runway shows.
The companies did not disclose the financial value of the partnership, which will be announced on Monday at the Cannes Lions advertising festival. Jay Penske, PMC chief executive, said he expected the long-term aggregate value of the partnership for his company to exceed $50m.
PMC will retain ownership of its photos, while Shutterstock will take charge of selling them to its 1.3m customers. PMC previously had a deal with Getty, but Mr Penske said his company “saw a better opportunity in aligning the PMC brands with Shutterstock, which we believe to be the ascending platform for imagery and video”.
He added: “We were also troubled by Getty’s current financial condition, because of its excess debt/leverage.” Getty, which was acquired by US buyout group Carlyle in 2012, has debt of $2.5bn, according to credit rating agency Moody’s.
Getty said: “The debt was issued to finance the acquisition by The Carlyle Group of Getty Images in October 2012; finances are in good standing and we remain focused on providing the very best imagery and service to our customers worldwide. Getty Images has strong support from its shareholders, the Getty family and The Carlyle Group, who are extremely confident in our business and our future.”
Shutterstock, which launched in 2003, has been broadening its lens from its original focus on providing stock images for commercial purposes such as marketing and corporate communications. It paid $33m in January for Rex Features, the UK press agency, gaining access to a library of 13m digital images and coverage of celebrities and news events.
The push into editorial images — a market Shutterstock estimates is worth $750m a year — was driven by demand from customers, said Jon Oringer (pictured), Shutterstock founder and chief executive. “Those publications that were buying the commercial pictures from us were asking why didn’t we have the editorial stuff also.”
Getting into exclusive functions has been a challenge, he said. “What happens at a lot of events is that the access is controlled and there are only a certain number of spots on the red carpet and at the event itself. What PMC offers us is the access and what we offer them are our customers and the four images we sell every second.”
PMC itself produces 50 events and conferences a year. Its publications, including Variety and the fashion-focused Women’s Wear Daily, offer extensive coverage of awards shows, fashion shows and celebrity parties.
The two magazines have deep photographic archives that Shutterstock will make available to its customers.
“That has amazing value to all the publications and all the media agencies we sell to,” Mr Oringer said. “Obviously the licensing is complicated with some of this stuff. PMC are experts at this and they own some of the iconic imagery out there that we’re going to be able to license. It opens us up to this whole new market.”
Mr Penske said that the depth of the archives and the access to exclusive coverage were “a key factor” in PMC’s acquisition last year of Fairchild Fashion Media, the owner of WWD, from Condé Nast and of PMC’s overall publishing strategy.
The market for image licensing has become more competitive since Shutterstock was founded. In addition to Getty, the company also competes against Adobe, the software company, which launched a stock service last week. Adobe Stock offers 40m images, compared with Shutterstock’s 56m and Getty’s 100m.
Get alerts on Getty Images Inc when a new story is published