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Author Topic: Getty profits decline on poor istock performance  (Read 18735 times)

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« Reply #50 on: February 27, 2015, 11:01 »
+18

Getty needs the support of artists now more than ever, while at the same time artists are moving away from 20% as an acceptable royalty rate. That's a problem I don't think Getty will be able to overcome. They should have changed that years ago, and now it's too late, they couldn't afford to pay a more fair rate if they wanted to.

The myth of 50% (or more) royalties being "unsustainable" is long dead, and companies like Getty who won't change that are going to be replaced by companies who don't bull---- artists and pay fairly.


« Reply #51 on: February 27, 2015, 12:12 »
-3

« Reply #52 on: February 27, 2015, 12:17 »
+1
I don't think that story relied on inside information


The Bloomberg piece linked to in the original post of this thread, and on which the other articles have been based specifically states that the reporting is based on information from

Quote
two people with knowledge of the companys finances who asked not to be identified because they werent authorized to speak about the private report

« Reply #53 on: February 27, 2015, 12:25 »
+12
there is nothing in that article jeff, I am sorry. they are just saying that they believe getty has a mystery plan that one day they will make money again. But there is absolutely nothing in their track record to prove they have the slightest clue how. they again spin the same story that the free image links will magically generate money one day. And the same nonsense how debts don't matter.

Nobody believes getty is a technology business, combining a few buzzwords don't make you one.

They are in complete denial over their situation and as long as they are, they won't improve.

and in the article you mention the downgrade isn't discussed, the downgrade is the reasons for all these articles.

All they do is pump out more smoke.

800 million revenue that keeps falling, 2,6 billion in debt and a management in denial without any vision.

The market has rated their bonds as junk, it can't be more obvious what is coming next.

« Last Edit: February 27, 2015, 12:28 by cobalt »

PaulieWalnuts

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« Reply #54 on: February 27, 2015, 12:33 »
+1
It's just a flesh wound!

PaulieWalnuts

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« Reply #55 on: February 27, 2015, 12:37 »
+2

« Reply #56 on: February 27, 2015, 13:09 »
+9

The best thing that could ever happen to iStock would be for Getty to spin them off to make some quick money. Getting out from under Getty is the only way iStock will ever bounce back.

ShadySue

  • There is a crack in everything
« Reply #57 on: February 27, 2015, 13:11 »
+1

The best thing that could ever happen to iStock would be for Getty to spin them off to make some quick money. Getting out from under Getty is the only way iStock will ever bounce back.

I don't think it will ever recover under Getty, but I'm nervous of the Devil I don't know.
« Last Edit: February 27, 2015, 13:30 by ShadySue »

« Reply #58 on: February 27, 2015, 13:28 »
+3
It is true that a debt will only become a major problem when the major creditors demand immediate payments of the principals. The question remains whether or not Getty has enough operation money when its current liabilities (including operational costs, loan interests and contributor's license fees) become due. Furthermore, after being downgraded to junk bond status, whether or not Getty can attract more loans to cover its current liabilities.

It is likely Getty will get some risk-taking loan lenders. However, it must implement new strategies to satisfy new lenders. I just hope that the new strategies will not further alienate its buyers and suppliers, or it will have not many "assets" left.

It is not true that there's nothing to worry about. The writing has been on the wall. Getty has been restructuring by merging its accounting to the States and reducing the contributor's pay-out to once a month, at least we know that much.

« Last Edit: February 27, 2015, 16:14 by Freedom »

« Reply #59 on: February 27, 2015, 13:30 »
+3

The best thing that could ever happen to iStock would be for Getty to spin them off to make some quick money. Getting out from under Getty is the only way iStock will ever bounce back.
Does istock still exist?  It seems completely absorbed by Getty to me, I don't think they could spin it off and who would they sell it to?  Selling to one of their rivals wouldn't be a good business move.

U11


« Reply #60 on: February 27, 2015, 14:03 »
+2
I guess we can expect more cheap but massive "Google-deals" soon which will bring Getty some immediate cash in a short run
 

« Reply #61 on: February 27, 2015, 14:09 »
+2
Knowing how Getty are in such a rut,  I can't wait to see what will be the next bright idea they will roll out to contributors that will end up earning everyone a lot less, but will be again spun as another great way to make everyone more money. It will be hard to beat the last great idea when they got rid of all the small sized photo buyers in one swoop by charging 3 credits for all exclusive pictures.

I liked when they used to assign F-Keys to their brain-farts. F5 was a great one. Also known as the day "they pressed the self destruct button" the first time.

Maybe the next one they will name as Control-Alt-Delete since those are the 3 buttons one normally presses to try and recover from a complete system crash.

« Reply #62 on: February 27, 2015, 14:20 »
-4
The market has rated their bonds as junk, it can't be more obvious what is coming next.


Junk : sounds like a terribly pejorative term - but junk bonds can be a great investment -> { what people always say about them is that the bad news is already priced in }

Meanwhile I am still very curious about the origins of this story and about the motivations behind the leak. There is always a reason for a leak. Thats the most interesting part of this story IMO. Who leaked it and why ?

Jim Pickerell hinted at this story here on this forum a few days ago (the day before the first Bloomberg piece in which he is also quoted. All of the other articles on the web follow from that.

I wonder whether the writer had spoken to the two anonymous sources or whether the information came via Jim Pickerell. Or maybe he got his lead via the Bloomberg reporter.

Paul Melcher is a reliable voice and the piece which Jeff linked to has a lot of merit IMO. I have the impression however that some people here are letting their feelings color their analysis.
« Last Edit: February 27, 2015, 14:23 by bunhill »

« Reply #63 on: February 27, 2015, 15:16 »
+3
i think the numbers are pretty easy to read. if you have to pay more than 400 Dollars of interest every month, but only have 52 dollars from your monthly income...you have a very, very serious problem.

Moodys isn't concerned with paying back the whole debt, just pointing out their monthly cash flow is so low they need additional loans just to pay for the interest

Here is the nicely done example from the article (its right at the beginning - http://photobusinessforum.blogspot.no/2015/02/getty-images-downward-spiral-approaches.html):

"Simpler? ok try this:
Assume you have a $30,000 credit card debt. The interest rate is 17%, so  you are required to pay $418.89 a month just in interest. In this example, using the numbers/income that apply to Gettys situation, you would only have $52.36 of your income you can use to pay down your debt, thus you have NO WAY of paying off a mounting debt when your monthly increase in debt is 8 times what you have to pay down the debt.
I cant make it more simple than that.

If any banker looked at your situation above, there is no way they would loan you more money, it would be highly irresponsible even predatory lenders wouldnt touch the above situation. As such, Getty is doomed.
"

Where will those loans come from? who will give them money just to pay monthly interest?

how will they invest in marketing or their Business?

how can they compete against two competitors without debt and millions to aggressively grow their Business?

There are no magical miracles hiding in their numbers
« Last Edit: February 27, 2015, 15:43 by cobalt »

« Reply #64 on: February 27, 2015, 15:49 »
+3
Bravo to all the conspiracy theorists, but the chances of Bloomberg publishing such a pointed and comprehensive article like that about a company's financial state of affairs based on purely unsubstantiated conjecture and speculation is pretty remote.

Plus, based purely on the fact that everyone is selling about 10% the number of files that they were a few years ago, I think there is no reason to doubt that the dire state of the company is any way exaggerated by those articles.
« Last Edit: February 27, 2015, 16:16 by iStop »

« Reply #65 on: February 27, 2015, 16:15 »
-1
I think Brian Williams works for Bloomberg now  ;)

« Reply #66 on: February 27, 2015, 16:23 »
+5
The market has rated their bonds as junk, it can't be more obvious what is coming next.


Junk : sounds like a terribly pejorative term - but junk bonds can be a great investment -> { what people always say about them is that the bad news is already priced in }

Meanwhile I am still very curious about the origins of this story and about the motivations behind the leak. There is always a reason for a leak. Thats the most interesting part of this story IMO. Who leaked it and why ?

Jim Pickerell hinted at this story here on this forum a few days ago (the day before the first Bloomberg piece in which he is also quoted. All of the other articles on the web follow from that.

I wonder whether the writer had spoken to the two anonymous sources or whether the information came via Jim Pickerell. Or maybe he got his lead via the Bloomberg reporter.

Paul Melcher is a reliable voice and the piece which Jeff linked to has a lot of merit IMO. I have the impression however that some people here are letting their feelings color their analysis.


Who can be the anonymous sources? My guess is Getty's plight must have affected people who are in the managerial or financial positions and anyone whose interests will be adversely affected by the financial difficulties. Or even those who stand to gain because of it.

We all know how much our own portfolio has suffered in 2014, if we don't insist on burying our heads in sand.
« Last Edit: February 27, 2015, 17:06 by Freedom »

Tror

« Reply #67 on: February 27, 2015, 16:37 »
+1
The myth of 50% (or more) royalties being "unsustainable" is long dead, and companies like Getty who won't change that are going to be replaced by companies who don't bull---- artists and pay fairly.

I fully agree. Lets say instead that 20% royalty are not sustainable since your suppliers will abandon you and leave you (getty) standing there alone in the rain with lots of debt.

If you still think to abandon istock / istock exclusivity = NOW is the moment to make them feel and rescue for yourself what is left.

« Reply #68 on: February 27, 2015, 16:41 »
+2

The best thing that could ever happen to iStock would be for Getty to spin them off to make some quick money. Getting out from under Getty is the only way iStock will ever bounce back.
Does istock still exist?  It seems completely absorbed by Getty to me, I don't think they could spin it off and who would they sell it to?  Selling to one of their rivals wouldn't be a good business move.

Sell it back to Bruce Livingstone, the iStock originator. I'd guess he could use only a part of his earlier sale price to buy it back. He would still have good living money and also have his baby back.

« Reply #69 on: February 27, 2015, 17:07 »
+3

The best thing that could ever happen to iStock would be for Getty to spin them off to make some quick money. Getting out from under Getty is the only way iStock will ever bounce back.
Does istock still exist?  It seems completely absorbed by Getty to me, I don't think they could spin it off and who would they sell it to?  Selling to one of their rivals wouldn't be a good business move.


Sell it back to Bruce Livingstone, the iStock originator. I'd guess he could use only a part of his earlier sale price to buy it back. He would still have good living money and also have his baby back.

But the baby has grown into a monstrous, abusive teen while he was away.

Shelma1

« Reply #70 on: February 27, 2015, 17:22 »
+4
This is more inline with reality!   http://blog.melchersystem.com/2015/02/27/chronicle-of-a-death-foretold/


You're one of the few people who've been reporting an increase in earnings. Just because you're full from dinner doesn't mean there isn't hunger in the world, to paraphrase Jon Stewart, I think it was.

« Reply #71 on: February 27, 2015, 17:25 »
+2
The truth is somewhere between both articles.  However as junk bonds go Getty is in a bind because their assets are not really all that hard.  Sure they have millions of exclusively owned images but that market is small compared to the entire library and if the suppliers get cut even lower than 20% average then they will continue to leave for greener pastures further eroding the Getty library.

They should spin off iStock and let it go on it's own, I bet that would get a lot of cash in the process. However long term it doesn't make sense.  Getty and iStock are stronger together and the entire imaging stock market benefits from Getty surviving.   No player should get so big as to have all the cards when it comes to the futures of suppliers and Getty got mighty close but those ways need to change in order for it to regain market share.  That means lower prices for clients and better royalty % for suppliers.

In 2007 the full year revenue was $860m   for 2011  $945 million  $879 million for the 12 months that ended Sept. 30  for 2014.

Whatever they are doing is keeping them in the revenue range with decreasing but not off a cliff income.  It's not as if they are earning 50% less even when many suppliers are due to reductions in our cuts. 

It won't go out of business but these articles might help a new buyer get in on the cheap and absorb the debt for pennies.   The most money is done when there is blood in the streets and everything looks dire. That is when the sharks come in and scoop up the pieces and digest them to make a killing later on.

Layoffs and some continued reduced revenue will probably come but not at the cost of Getty the company disappearing.   Shutterstock's stock is way down from it's highs last year of $99.38 it is now $56.55 but it went up too fast for it's own good. It went down even when revenue is accelerating. Speculators have taken it for a ride. 

It will be an interesting year for sure on the direction of the entire stock business.     

« Reply #72 on: February 27, 2015, 17:40 »
+1
Thanks James, couldn't have said it better myself!

« Reply #73 on: February 27, 2015, 19:18 »
+3
Getty has been owned by sharks two times now. Do you really want another hedge fund to get in,chew them through and resell them with a huge profit to themselves and more debt in 3 years?

I hope they can find a real owner, someone with a vision who wants to keep them longterm, brings in their own management and genuinely tries to grow the business in a logical way.

Moodys just looked at free cash - in Q3 2014 they had 41 million in free cash, in Q4 they had 27 million. http://www.bloomberg.com/news/articles/2015-02-25/carlyle-s-getty-images-said-to-run-tight-on-cash-as-profit-drops

So what will their cash flow be like this quarter? It will be lower than in Q4, wont it? So when moodys does their next assessment, what will they say?

The problem is not that they have stopped selling files, the question is can the pay their running costs, including debts and marketing. Free cash, not revenue.

And who would want to buy Getty? Can anyone think of a good new owner?




« Reply #74 on: February 27, 2015, 19:37 »
+2

And who would want to buy Getty? Can anyone think of a good new owner?

Bruce?  ;)


 

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