A21 Buys UK Subscription Service . . .
Stock Asylum Staff Report
October 12, 2005
The acquisition of a United Kingdom stock supplier will move a21 and
its subsidiary SuperStock into the subscription stock photography market
along with competitors like JupiterImages, Getty Images, Index Stock
and others.
The purchase of Ingram Publishing, which operates the IngramStock brand, provides a21 and SuperStock an immediate entry into the European subscription stock photo market and the technology to build a similar offering for a21's PureStock collection, according to a spokesman for the company.
IngramStock has over 100,000 images available to both royalty-free and subscription buyers. The company also offers fonts, vector graphics and other products from its base in Tattenhall, Cheshire about three hours from London.
Ingram shareholders received $965,039 in cash and $1,448,000 in preferred a21 stock at a minimum price of 50-cents a share. Ingram debt of $1,548,071 and other liabilities were paid off by a21 as part of the deal.
A21 spokesman Joe Gavaghan said the Jacksonville, FL, company will continue to operate the IngramStock brand in Europe for at least the time being.
Besides the United Kingdom, Ingram has sales staff in France, Germany, Belgium, Spain Italy Greece and Holland. It is represented by more than 60 subdistributors around the world.
Financial details of the Ingram acquisition were not disclosed. A-21 recently raised more that $4 million for operations and acquisitions.
It's a really good opportunity for us to get into the subscription space," said SuperStock President Haim Ariav. He noted that the Ingram web site operates in six western languages and can handle purchases in dollars, euros and pounds.
"We looked at subscription and felt that the U.S. market is very highly penetrated right now," said Ariav. "I don't think Europe has been marketed to as much as the U.S. has."
Ingram sells subscriptions for $159 a month, $599 for six months and $659 a year for unlimited image downloads. It also offers a $359 six month subscription that allows just 10 downloads each month.
Ariav said the Purestock subscription service, which will be called "Purestock X," will be structured differently. Purestock X will probably have price levels based on the resolution of the images. He said the highest resolution version of each image, 80 megabytes, will be available only as individually-purchased royalty-free images.
SuperStock does not believe subscriptions will undercut royalty-free sales, said Ariav. He said research shows that most subscribers download a relatively small number of images.
"We looked at what kind of cannibalization we will have," he noted "There is an audience out there for the subscription model, but primarily the customers are small office and home office kinds of customers."
Ariav believes many of these new image buyers will eventually purchase more expensive products.
In announcing the purchase, a21 Vice Chairman and President Thomas V. Butta said Ingram products will be "highly complementary to our SuperStock subsidiary."
He said the acquisition provides an opportunity to "expand SuperStock's offering to include an innovative subscription product with multi-language and multi-currency capabilities."
Ingram founders and principals Louis Ingram, John Bonhill and Cathal Sheehy will work for a21 in the United Kingdom.
Ariav said SuperStock is considering other acquisition targets, but noted that much company effort will go into integrating Ingram during the next few months.
SuperStock can be found at: http://www.superstock.com
IngramStock is at: http://www.ingramstock.com
