Sounds to me as if getting the Getty family and Klein to pitch in - along with a lower price than initially sought - was the only way to get the deal done. But I don't understand what it means to have the Getty family roll their interests (thought to be 15%) into the transaction? And Klein investing equity means he borrowed against his stake?

Was H&F so horrible as a boss that Getty and Klein wanted them gone badly enough that they put up their own money to make it happen?

And all this stuff about Carlyle investing in growth doesn't square with what I've been told about how private equity firms operate - which is that they need to make money on the deal and in the short term, not the long term. But as Getty's already been through one round with private equity owners, it's hard to believe they'd have any illusions about what this really looks like day to day.

Don't know if this private equity firm is any better.  They all have to squeeze money out of the company that  they just paid to much money for.  The other scary thing is they are trying to buy focus media- the chinese getty if you will.  That might not be good for istock members.  Seeing that the amount is less than they hoped for must mean sales are tanking.   Hence all that promoting of non exclusives for the last few years that screams buy at cheaper sites.  It was all to improve the bottom line.  Keeping a higher % of the sale.  Not to build into the future.  Its all clear now.  Pump and Dump.  Not exactly aimed at growth. 

"Nothing will change for our contributors" --
http://www.bjp-online.com/british-journal-of-photography/news/2199115/-nothing-will-change-for-our-contributors-says-getty-images-ceo

"Nothing will change for our contributors" --
http://www.bjp-online.com/british-journal-of-photography/news/2199115/-nothing-will-change-for-our-contributors-says-getty-images-ceo

Ooh dear __ this bit doesn't exactly sound promising;

BJP: You're now talking about taking the company into the next phase of development and growth. What is that phase?

Jonathan Klein: "The main thing around that is: more international. We're going to be investing more in Asia/Pacific, Middle East and Latin America. The second part is to grow our ThinkStock subscription business more aggressively. And thirdly, our editorial imagery business is really strong and we will be more aggressive in expanding that in particular internationally."

Expanding Thinkstock is actually the second most important area for growth (followed by taking editorial more international)? If that the best that they can come up with then the future doesn't look rosy. Not good for exclusives either if Thinkstock trumps Istock in the priority stakes.

"Jonathan Klein: No. Nothing will change for them, just like the Hellman deal didn't change anything for them."

Do you think he knows that he's full of crap? Or does he really just believe his own B.S...

I have to lean towards the former, since that seems to be the company line at istock, and it probably trickled down from somewhere. Makes me think back to that silly "unsustainable" line.

Quote

"Jonathan Klein: No. Nothing will change for them, just like the Hellman deal didn't change anything for them."

Do you think he knows that he's full of crap? Or does he really just believe his own B.S...

I have to lean towards the former, since that seems to be the company line at istock, and it probably trickled down from somewhere. Makes me think back to that silly "unsustainable" line.

Actually, everything he says is spot on... just not from his perspective. If you flip it around and use it to describe being a contributor iStock, it makes perfect sense. It is unsustainable and nothing will change.  

At risk of repeating myself (I keep posting this thought from time to time):  the agencies, and their owners, would really like everything to be subscriptions, because they want to escape the commission model entirely and have the bulk of their income in the form of up-front subscription fees.   Payments to contributors become totally arbitrary amounts, with apparently no floor below which they can't sink.  

And more importantly - since the link between sale price and commission is removed - they can raise prices to buyers without paying more to photographers.

The fact that Getty's new owners are immediately talking about their love for ThinkStock probably says it all in terms of a future direction.

Entirely IMHO of course.

"Jonathan Klein: No. Nothing will change for them, just like the Hellman deal didn't change anything for them."

I don't believe that the H&F deal changed nothing for contributors, both to Getty and to iStock. They may say that all the forced RM to RF subscription migration and cuts in royalty payments had nothing to do with it, but IMO that's just fantasy.

Excuse me, nothing changing? When did Thinkstock get created? (Feb. 2010 in case the answer is needed) When did they shut down StockXpert? (hint: new owners of StockXpert, Getty Images, have announced the site is now closed to new registrations and uploads and will stop sales later this month. = Feb. 2010)

No changes, like the commission cuts, the canister levels changing, commissions based on annual sales of some mystery formula, the whole unsustainable "money doesn't make you happy" (loosely stated, not a direct quote) thing?

That kind of nothing will change? 

If they are expanding marketing and improving Editorial, which was protected by Getty's news service interests, that's not too bad. As for aggressively expanding subscription sales, if I make more, fine, if it's just selling out the whole industry for cheaper sales, lower prices, there's no gain in it, just more price cutting. May I simplify that? They make more, we make less.

Quote from: jsnover on August 15, 2012, 13:13

"Jonathan Klein: No. Nothing will change for them, just like the Hellman deal didn't change anything for them."

I have no words...

he could have said that money doesn�t make us happy

At risk of repeating myself (I keep posting this thought from time to time):  the agencies, and their owners, would really like everything to be subscriptions, because they want to escape the commission model entirely and have the bulk of their income in the form of up-front subscription fees.   Payments to contributors become totally arbitrary amounts, with apparently no floor below which they can't sink.  

And more importantly - since the link between sale price and commission is removed - they can raise prices to buyers without paying more to photographers.

The fact that Getty's new owners are immediately talking about their love for ThinkStock probably says it all in terms of a future direction.

Entirely IMHO of course.

I fully agree with you. As a Getty and Istock exclusive I am much more afraid from the subscription model than any other agencies out there. I am participating to Thinkstock to test the waters and from my experiece there and the Premium Access in Getty the income I generate from those compared to the commision model is pitiful. If they are going to dedicate their resources to that model it's going to be a tough ride.

Yep, it's pretty clear what the direction will be here.  If Thinkstock is that big of a priority there almost certainly will be changes. And big ones.

It would suggest they are going to need more and better content for Thinkstock for the big international marketing push to show off. Where will this come from? Flickr? New source? Most likely it will be from IS and GI contributors being forced into making most of all portfolio images available to Thinkstock.

They probably see a goldmine in SS's subscription model and growth. With TS Getty can collect steady revenue, pay contributors a flat rate, and make a massively fat profit.

Interestingly, there didn't seem to be any mention of IS. Probably because it will finally be absorbed into Getty as a collection. Or maybe even absorbed into Thinkstock as a single purchase option. Or maybe a little of both depending on the perceived value of the image.

Interesting times are ahead.

I can't believe they're using Jonathon Klein as a spokesperson, after the last time he put his foot in his mouth. I'm glad I'm not contributing there anymore, that's for sure.