Getty Images, Inc. Business Information, Profile, and History

Company Perspectives:

Our imagery is used in the broad spectrum of applications. There is a good chance that the next time you see a television commercial, read an annual report, glance at a poster, visit a website, or choose a greetings card, the image that catches your eye will have been supplied by us. Getty Images thrives in this dynamic and fast-moving industry because we are obsessed with providing the highest quality imagery capable of multiple sales; our customer service; our strong brand names; and our worldwide distribution network. We will capitalize on these key strengths to grow our existing business and to acquire complementary businesses in the future.

History of Getty Images, Inc.

Getty Images, Inc. is the largest provider of visual content in the world, controlling more than 60 million still images and more than 30,000 hours of footage. Getty's content ranges from contemporary to archival material, grouped within branded collections that include: Tony Stone Images, a contemporary stock photography provider; Hulton Getty, one of the two largest privately owned collections of archival photography; Allsport, a leading sports photography brand; PhotoDisc, a pioneer in royalty-free stock photography and electronic delivery; Liaison Agency, specializing in news-oriented images; and Energy Film Library, a leading supplier of stock footage. Getty marketed its visual content through catalogs and through a handful of Web sites, maintaining its contact with customers through a worldwide network of sales offices and agents in 67 countries.

Origins

Fittingly, the occasion of Getty's birth as a visual content provider occurred through an acquisition, one of many to follow in the years ahead. On March 14, 1995, the company commenced operations when founders Mark Getty, a descendant of Jean Paul Getty, the multibillionaire business executive, and Jonathan Klein completed their first acquisition, purchasing Tony Stone Images. Tony Stone was regarded as one of the world's leading providers of contemporary stock photography, owning a body of images, highlighted by a tightly edited core collection called the Dupe Master Collection, of more than one million photographs. With $42 million in sales for the year preceding its acquisition by Getty and Klein, Tony Stone became the foundation of the newly formed company, inaugurating its bid to become the preeminent provider of visual content. To reach such heights, Getty and Klein planned to be consolidators in the fragmented visual content industry, a strategy that required the founders to assess acquisition opportunities constantly. Their search was not restricted to contemporary stock photography, but encompassed a range of formats and subject matters, stretching from contemporary and archival stills and footage, to news, current affairs, features, and celebrity material. It was a plan predicated on acquisitions, something the company did with enthusiasm during the latter half of the 1990s as it added to its portfolio of images by the millions.

A year passed after the acquisition of Tony Stone Images before Getty acquired its next major collection. In April 1996, the company purchased Hulton Deutsch, one of the world's largest privately owned collections of archival photography. Renamed Hulton Getty, the collection included vintage prints taken by the photography industry's pioneers and images from throughout the world portraying significant events and people during the 19th and 20th centuries. Divided into 300 separate collections comprising approximately 15 million images, Hulton Getty drew the majority of its customers from the United Kingdom&mdash′imarily professional customers such as magazine, news, and book publishers. Tony Stone attracted similar users, but the collection also was used by advertising and design agencies, travel companies, and poster and calendar manufacturers. For those customers interested in either collection, Getty offered the material through a network of international sales offices in the traditional manner. Catalogues were sent to interested parties, who then selected the specific images they wanted to use, for which privilege they paid a sizable fee to Getty. As customers perused the collection catalogues, however, Getty, along with other companies in its industry, was preparing for a new era in the visual content industry. The digitization of photographs, which then could be displayed on Web pages, promised to expedite the selection and buying process for traditional customers and, potentially, spark demand among the general public. Accordingly, Getty established in-house departments charged with digitizing the images in each of its major collections.

For Getty, success in the visual content industry hinged on the geographic reach of the company and the breadth and depth of its images and footage. Displaying images on Web pages would greatly aid the company's attempt to reach as many customers as possible, but, with or without the advantages of electronic technology, Getty's marketing efforts depended on a group of strategically placed sales offices. Headquartered in London, Getty maintained sales offices in Boston, Chicago, Los Angeles, New York, Seattle, Toronto, Paris, Munich, Hamburg, and Vienna, while serving markets in other regions through agent licensees in 20 countries. Through this sales network, the company supplied the visual content demands of an international customer base, striving to offer as comprehensive a selection of imagery as its acquisitive efforts yielded. Like a retail superstore, Getty strove to be a one-stop destination for anyone interested in any form of visual content, which meant its management was continually either acquiring content or in search of acquiring content to flesh out the company's selections.

Stock Offering in 1996 Enables Future Acquisitions

One month after the purchase of Hulton Deutsch, Getty struck again, acquiring Fabulous Footage, a leading North American provider of contemporary stock footage. With content in three major categories--contemporary stills, archival stills, and contemporary footage--Getty represented enough of a presence in the visual content industry by mid-1996 to attract the attention of investors. The company presented itself to the investing public in July 1996, completing an initial public offering on the NASDAQ Exchange that raised the cash needed to fuel its acquisition campaign. The company's next move on the acquisition front bolstered its control over distribution in Europe. In November 1996, Getty purchased World View, the exclusive licensee of Tony Stone images in Holland, Belgium, Sweden, and Denmark. Based in Amsterdam, World View had served as a licensee for Tony Stone since 1987. Its acquisition by Getty represented part of the company's strategy to have wholly owned offices in major markets rather than operating through agents.

By the end of 1996--the first full year of operation--Getty's sales totaled $85 million and its net income stood at $2.7 million. The company's annual financial totals would increase significantly as new collections were added and as new segments of the visual content market were penetrated, which the company accomplished in November 1997 when it made its first foray into photojournalism. The entry into photojournalism came through the purchase of the Liaison Agency, a New York-based photography agency regarded as one of the world's leading suppliers of news material. Founded in 1966, Liaison possessed a library containing several million images of major news and entertainment events, stocked by the company's global network of photojournalists. Through its own connections and through a production and distribution agreement with France-based Gamma Presse Images SA, Liaison had contracts with roughly 750 photojournalists spread throughout the world. Magazine, book, and multimedia publishers ranked as the company's primary customers, who were serviced by Liaison agents in more than 50 countries. Liaison, which was organized as a subsidiary named Gamma Liaison, Inc., added yet another dimension to Getty's collection of images, giving the company news content it previously lacked and bolstering its selection in existing categories. Liaison, through a division called Liaison International, operated a contemporary stock photography business, which represented more than 250 renowned photographers. Another complementary aspect of Liaison's business was its corporate assignment division, which provided corporate clients with images for annual reports, company magazines, and corporate brochures.

With the additions to its content, Getty stood as a serious contender for supremacy in the visual content industry. One by one, the company had methodically enriched its image and footage collection, building on the contemporary stock photography of the Tony Stone collection by adding archival photography, contemporary stock footage, and news-oriented photography in successive order. By 1997, Getty was ready to unveil a new way to market its growing collection, a signal moment in the company's history that coincided with the formation of a development partnership with computer giant IBM. In April 1997, Getty and IBM began working together to create a digital image distribution system based on IBM's Digital Library watermarking system, which enabled a digital image to be visually identified as belonging to a copyright holder without detracting from the image's visual appeal. Concurrently, Getty launched 'Hulton Getty On-Line,' a Web site containing selected images from the Hulton Getty collection. Initially, several thousand of the 15 million images within the collection were put on display, the first stage of a plan that called for 500,000 archival images to be online by the end of 1998.

Getty's foray into electronic commerce promised to mark a new era in the company's short history. No longer restricted to requesting catalogues, customers could examine and select images via the Internet, expediting the selection process substantially. Once their selection was made, customers contacted their nearest Getty sales office to license the rights to their selection and subsequently received a copy of the image suitable for reproduction in a variety of digital and analogue formats. The ease of online systems touched off excitement throughout the visual content industry, prompting providers to marshal their efforts toward the development of digital catalogues tailored for Web site display. Getty, which had been attempting to be the leading supplier of visual content in the world since its inception, added the objective of becoming the leading provider of visual content on the Internet. Toward this end, the company made rapid progress in 1997, shouldering past rivals by maintaining its posture as an aggressive acquirer.

1995:Getty Communications is formed through acquisition of Tony Stone Images.

1996:Company debuts on the NASDAQ Exchange.

1997:The launch of 'Hulton Getty On-Line' ushers company into electronic commerce.

1998:Getty Communications and PhotoDisc, Inc. merge, creating Getty Images, Inc.

1999:The Image Bank is acquired for $183 million.

In July 1997, Getty completed two important acquisitions. First, the company purchased the photographic work of Slim Aarons, regarded as one of the world's leading photojournalists. Aarons's photographs, which had appeared in a variety of national magazines in the United States, included portraits of politicians, entertainers, and his perspective of American society, capturing 'a bygone world with a mischievous eye,' according to Mark Getty in the press release announcing the acquisition. One week later, the company purchased Energy Film Library, greatly increasing the content of its footage collection. Energy, whose customers included advertising companies, feature film producers, and industrial clients, controlled a library containing 3,500 hours of footage, the majority of which had been mastered to digital imagery for online search and distribution. The acquisition represented a major step toward Getty's goal of amassing the largest collection of moving imagery in the world, adding one of the two leading companies in the stock footage industry to its existing Fabulous Footage collection.

1998 Merger with PhotoDisc

Getty's next move on the acquisition front led to profound changes, creating a new company and eventually prompting the relocation of headquarters away from London. In September 1997, Getty agreed to a union with PhotoDisc Inc., the leading royalty-free digital stock photography provider and the largest provider of imagery on the Internet. Traditionally, the royalty fee paid by customers entitled them to use an image for a limited time in a particular medium, but royalty-free providers sold images on a flat-fee basis, allowing the customer to use the image in any media without any time constraints. PhotoDisc, a pioneer in the royalty-free concept, represented an enormous addition to the content owned by Getty, creating a new company called Getty Images in February 1998 that drew its senior executives from both companies. Mark Torrance, the founder of PhotoDisc, became co-chairman of the new company, serving alongside co-chairman Mark Getty, while Klein assumed the responsibilities of chief executive officer, the same position he had held for Getty Communications.

As the details of the merger agreement between Getty and PhotoDisc were being finalized, another acquisition was announced. In February 1998, the company acquired Allsport plc., a sports photography agency whose photographers captured images from sports events throughout the world. Getty planned to distribute Allsport's current photographs and the agency's archive of four million edited images through its global network of sales offices and to distribute the images digitally on the Internet. After the absorption of Allsport and the completion of the merger between Getty Communications and PhotoDisc, the company ranked as the largest visual content provider in the world, registering $185 million in revenue at the end of 1998. Growth had come quickly, fueled through acquisitions that saw Getty complete a three-year climb to the top of its industry. Leadership, in terms of revenue, was a position Getty intended to maintain, an objective that called for the continued enhancement of the company's content collection and a concerted exploration of marketing opportunities in the digital age. As the 1990s drew to a close, Getty proved its rapid rise within the industry had not bred complacency. The company ended the decade decisively, setting the stage for its growth at the dawn of the 21st century.

In March 1999, Getty announced it was relocating its headquarters from London to the United States, where the majority of the company's revenue was collected. Seattle was selected as the new hub for the global organization, situating the company in the same city occupied by its closest rival, Corbis Corporation, spawned from the fortunes of Microsoft founder, Bill Gates. The move from London to Seattle reflected Getty's commitment to the potential of electronic commerce. 'Because of the importance of technology, which is completely transforming our industry,' Klein told the Puget Sound Business Journal in May 1999, 'we wanted to be close to that expertise.' The move to Seattle was expected to be completed before the end of 1999, but as the transition was taking place, the company announced the largest acquisition in its history. In September 1999, Getty revealed it was purchasing The Image Bank from Eastman Kodak Co. for $183 million. With 70 sales offices in 40 countries, The Image Bank owned significant contemporary and archival photography and film footage, representing the work of more than 1,500 photographers and more than 200 cinematographers. With the inclusion of The Image Bank's content into the disparate collections owned by Getty, the company's foundation for the 21st century was set, but was sure to increase as further acquisitions were completed in the years ahead. Controlling more than 60 million still images and more than 30,000 hours of footage, Getty promised to be an industry leader in the future.

Principal Subsidiaries: PhotoDisc, Inc.; Allsport Photographic plc; Carlton Communications BV.

Principal Competitors: Corbis Corporation; Eastman Kodak Company; United News & Media.