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Author Topic: Fotolia Funded? Sold?  (Read 6023 times)

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« on: May 26, 2009, 00:18 »
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Does anyone know if this is truth or rumour?  It's a few days old now, I thought there would be chatter if it was correct.

http://www.techcrunch.com/2009/05/22/fotolia-takes-a-massive-50-to-100-million-round-from-ta-associates/


« Reply #1 on: May 26, 2009, 00:34 »
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We can only keep guessing until (if ever) an official announcement is made. One would think that they would be likely to spread the news, because it would mean they have some cash to burn, at least for a while.

A bit off topic, but I really didn't like this paragraph from the article above:
"Fotolia is being pretty aggressive in undercutting iStockPhotos already low microstock prices, and the new PhotoXpress site is even more disruptive. Forget about selling images and illustrations for $1 to $10 a pop. It offers 10 free images a day."
« Last Edit: May 26, 2009, 01:26 by goldenangel »

« Reply #2 on: May 26, 2009, 00:39 »
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My experience with TA is they have a bottom of $60 million.

Sounds more like Fotolia is in acquisition mode, I would not imagine subordinate debt. ... wonder who they are buying.

« Reply #3 on: May 26, 2009, 02:25 »
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In my experience a venture capital firm like TA would be far too smart for paying $50m to $100m for a company like Fotolia. Even for a full buy-out this is massively overpriced in todays economy.

My guess is that the Fotolia owners try hard to sell their company and simply spread some rumours for impressing uninformed investors.


« Reply #4 on: May 26, 2009, 03:45 »
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In my experience a venture capital firm like TA would be far too smart for paying $50m to $100m for a company like Fotolia. Even for a full buy-out this is massively overpriced in todays economy.

My guess is that the Fotolia owners try hard to sell their company and simply spread some rumours for impressing uninformed investors.


Why would TA be "far too smart" to buy FT at those prices? If you crunch the known figures backwards it suggests that FT currently has an annual turnover of about $45M of which they're only paying out about 35-38% in commissions. On the basis of sales it is probably about double the size that IS was when they got bought out.

Anyway the report is emphatic that TA has not actually bought FT, although they must have acquired a huge chunk of it. I think Litifeta may be spot on suggesting that they may be in acquisition mode __ I can't think of any other reason why a business in apparently robust health would need such a large cash injection.

Makes you wonder who they are after? Surely SS and DT are the only two other major players, still in private ownership, that could command such figures. Looks to me that only SS would cost anything like the sort of money being talked about. Fascinating.

« Reply #5 on: May 26, 2009, 05:47 »
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this is quite entriguing news...  it sure wonder what is up as well.

I am a little surprised at the information tech crunch gives about fotolia on the bottom though?!

Fotolia is a low-priced stock photography clearing house, offering nearly 4 million images
they said in the article itself that they have 5 million images

Fotolias images are mostly from amateur photographers and the photos are slightly lower quality that Corbis or Gettys images.
This is pretty debatable.  I think the majority of the members are amateurs but I would guess that the bulk of fotolias images come from people who are doing this for a living.

Fotolia photographers enjoy 40% of the sales revenue from their images.
ummm... only two photographers are getting that %, the majority are getting 30-36%, with a few getting 38%

..as micro-stock houses like iStockPhoto and SnapVillage.
Snapvillage??  Snapvillage who?

edit -> oh i see that is some sort of a wiki, so it is perhaps not too surprising it is outdated... but still...

lisafx

« Reply #6 on: May 26, 2009, 09:21 »
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Very interesting information.  Thanks for posting Pixart.

I don't know how exactly this sheds light on their current inexplicable action to start a massive free image site, but I am sure it does somehow. 

It is starting to look like Getty, and now Fotolia (or TA Associates) are in a massive game of trying to undercut the competition and ultimately keep all the marbles for themselves. 

Competition for contributors was great when it was happening and driving royalties up, but this race to slash prices and put the other guys out of business really doesn't look to have an up side for contributors.   

« Reply #7 on: May 26, 2009, 09:34 »
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Competition for contributors was great when it was happening and driving royalties up, but this race to slash prices and put the other guys out of business really doesn't look to have an up side for contributors.   

Totally agree with this. I'm worried they are taking the WalMart approach: Slash prices, put your competitors out of business, screw your suppliers. The funny things is, WalMart's suppliers are chomping at the bit to sell there even knowing that they put a downward pressure on prices. Many a supplier has been put out of business because of the squeeze WalMart puts on them.

« Reply #8 on: May 26, 2009, 09:45 »
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Totally agree with this. I'm worried they are taking the WalMart approach: Slash prices, put your competitors out of business, screw your suppliers. The funny things is, WalMart's suppliers are chomping at the bit to sell there even knowing that they put a downward pressure on prices. Many a supplier has been put out of business because of the squeeze WalMart puts on them.

I've yet to see any real evidence for this __ just lots of speculation and conspiracy theories. Yes, some agencies have cheaper offerings than others but this most often just reflects the size and quality of their respective libraries.

There's also precious little evidence that a significant proportion of the real buyers are particularly price-sensitive anyway. For example most Emerald and above contributors at FT don't report losing sales when they put their prices up. DT and BigStock both had very simple and cheap pricing structures when they started but it didn't mean that they rapidly gained market share over the others __ quite the reverse in fact as they probably didn't make enough profit to invest in adequate marketing.

« Reply #9 on: May 26, 2009, 10:08 »
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I would agree that all it's only speculation but it's speculation based on my past experience working with businesses. I really hope I'm wrong but I really think we are going to start feeling the squeeze on our commissions. It may take a while, only because, as you pointed out, the current crop of buyers aren't overly price sensitive. But this may change as a wider array of buyers come into the fold. Agencies are going to start focusing on this market( i.e. PhotoXpress), and the new crop of buyers will be less sophisticated and more price sensitive.

« Reply #10 on: May 26, 2009, 14:22 »
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So many things are going on.  This funding.  The PhotoXpress launch.  The new CEO (sorry, forget the Istock dude's name at the moment).  Since PhotoXpress just came out this week and since they have disclosed virtually nothing about the site....  perhaps they are taking the approach of a a crack dealer.  Give everybody a taste of the crack and lure them in.  I can't possibly fathom what the benefit of that site is as it is today with no revenue.  There has to be a big picture that we are not privy to.  "Customers" will have to eventually realize how limited free sites are and want to buy something better.    I have only skimmed their terms (as a photographer not a customer).  When you sign up for free downloads, are you really signing up for something else? 

I used to work in the theatre, and shortly before they filed for Chapter 11, a big Hollywood producer came in like a white night and infused a ton of money.  Then they found out about the Securities fraud etc. and the business was forced into bankruptcy.  (Yup, bad investment.)  Another reason for the cash infusion may be that FT just isn't doing well.  It's easy to say that we get such a low % they must be raking in the bucks - but who really knows.

« Reply #11 on: May 26, 2009, 18:17 »
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Guess it's time to strap in and enjoy the ride.  ;D

« Reply #12 on: May 27, 2009, 16:36 »
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anyway, good to see some private equity still exists. Maybe TA should look at buying out Francisco Partners, they have some great assets, albeit, they paid way too much for them.

puravida

  • diablo como vd
« Reply #13 on: May 27, 2009, 16:59 »
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not sure what it is , but it must be business as usual, as I just got a sale this afternoon, right after I had my first extended licence sale last week. let's hope this is a good sign of better things to come.


« Reply #15 on: May 27, 2009, 23:51 »
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TA's VP, Christian Grnwald is on the board of FT according to his bio here http://www.ta.com/team/team_london.asp?ID=91  so they must be in bed together.  But who's bed?

« Reply #16 on: May 28, 2009, 05:28 »
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TA's VP, Christian Grnwald is on the board of FT according to his bio here http://www.ta.com/team/team_london.asp?ID=91  so they must be in bed together.  But who's bed?


If TA have invested hugely in FT then it would be standard practice for their interests to be represented via a place on the board. Not sure we can read into it any more than that.


 

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