24 May 2012 More Money in Microstock

The last couple of weeks have been quite exciting for the microstock industry. The top three agencies have all had significant financial news.

Shutterstock Files for $115 Million IPO

The first announcement came last Monday when Shutterstock filed listing documents.

They’re seeking $115 million, though that figure could change before they list.

They’ll list on the New York Stock Exchange under stock code SSTK.

The announcement came as no surprise to those watching the industry: recent board-level hires all had public company experience; a full re-branding was executed the week prior; and, some less-than-discreet consultants leaked news of a piqued interest in the microstock industry from the financial sector.

The highlight detail of the S-1 was Shutterstock’s revenue of $120 Million for 2011, placing it “very close” to Fotolia but less than half of iStockphoto. Profit for the same year was $21.9 million.

Fotolia Raises $150 Million

The very next day, Fotolia announced that they had closed a deal for $150 million from listed private equity firm KKR.

KKR also arranged a further $150 million loan for Fotolia.

The Financial Times reported that the $150 million investment was for a 50% stake, valuing Fotolia at $300 million. It also noted the deal was a partial exit for 2009 Fotolia investor TA Associates, who retains “just under a third” of the company.

Hellman & Friedman Considers Re-listing Getty

And not to be left out, iStockphoto participated too, via parent company Getty Images.

Getty owners, Hellman & Friedman, were reported to have hired Goldman Sachs and JPMorgan Chase to investigate the possibilities for sale or IPO (re-listing) of the business.

This comes shortly after news that Hellman & Friedman had taken another dividend of $379 million, funded by a $275 million loan in Getty’s name, which together with the $496 million dividend in 2010, repaid much of the $941 million they spent taking Getty private.   Getty’s 2011 revenue was reported to be $945 million.

Implications for Microstockers

Will we benefit from the opening of the Shutterstock books when they become a public company?   Unfortunately not.   While there’s a lot to be learned about the business from the listing documents (some of which is true and accurate), new legislation grants them limited reporting responsibilities as an ‘Emerging Growth Company’.

Will we be able to have a say in how Shutterstock is run?   Fortunately not.   Founder & CEO, Jon Oringer, and other existing investors will still own over 50%, leaving them with full control.

In the bigger picture, large cash injections at two of the top three agencies will only deepen their dominance over the smaller agencies which help keep them honest. KKR even stated their intention to “consolidate the fragmented market”. This may not be positive for microstockers in the long term.

  • Luis Santos
    Posted at 15:58h, 24 May Reply

    Hi Lee! How are you so sure it won´t be a good thing for microstockers? Jon talked about consolidation and perhaps getting more market on his side, can´t we have some hope?

  • Mark Milstein
    Posted at 01:35h, 25 May Reply

    Look for a maturation of the industry to finally take place. All of this public and private money flowing into microstock will ultimately see it become the dominant licensing model of the visual media industry. Also look for a greater leveraging of technology to manage the ballooning content pipeline which will fuel sales and profits. You can’t have sales without content, and you won’t have content (at least not for long)without sales. Marry those two with good, solid technology and a kick-butt workflow and watch the competition fall to the wayside.

  • Mark Milstein
    Posted at 03:04h, 25 May Reply

    And last but not least, you will never be able to create a workable, fully responsive archive without good editor/ reviewers. Those editor/ reviewers are what makes the difference between an ad hoc, poorly constructed archive of images and footage that provide the user with a poor experience and cheat the photographer/ artist out of sales and those archives built and managed by intelligent, experienced editing teams which strive to ensure that only the content which is searched for appears in the results.

  • Eric B
    Posted at 11:41h, 25 May Reply

    Hoping the consolidation conspiracy isn’t true. Yuri and the other independents—along with Canstock and others that size—are needed to keep prices decent for us in my opinion.

  • Stock Photo Seller
    Posted at 15:18h, 25 May Reply

    While it’s clear that Microstock will continue to dominate in total number of licenses issued, traditional RM is still a very viable way to sell when it comes down to revenue generated.

  • Yuri Arcurs
    Posted at 17:01h, 27 May Reply

    WOW. So many changes in such a short timespan. So many of my good friends are now multi-millionaires!!! I am happy for you Jon! We talked just before this went down, and I now know why you had to be “silent”. 🙂 And congrats to Oleg in NY too. Living just a couple of blocks away from Jon! What a strange little world. Anyway. Congrats. I will have to push through a couple of years more before you will see me down the block! 🙂 (Getting close though.. You will see shortly)

Post A Comment