Jupitermedia Buys Creatas . . .
Stock Asylum Staff Report
Jupitermedia's efforts to become a major player in the stock photography
industry took a giant step forward with the recent purchase of Creatas,
LLC, for over $38 million in cash and 1,483,073 shares of Jupitermedia
stock. The entire deal is worth about $60 million. The deal closed in
early March.
The purchase brings the Picturequest, Creatas and Liquid Library web sites under the Jupitermedia umbrella, making the information company the third largest seller of stock photography in the world after Getty Images and Corbis. The acquisition will generate about $36 million in annual revenues for Jupitermedia. The company reported $22.57 million in image sales last year.
The Jupitermedia’s collection of online images now surpasses one million with about 500,000 images wholly-owned by the Darien, CT, company, according to Chairman and CEO Alan M. Meckler.
It is a wide-ranging market offer with everything from inexpensive subscription services like Liquid Library and Photos.com to high end rights-managed products, including parts of the Comstock and Picturequest collections.
Meckler said Jupitermedia will bring all of the brands together under a single search engine on the Jupiterimages web site. Currently, stock buyers must search each brand separately. He said the transition to a single search should be completed in a couple of months.
The Creatas acquisition represents a change in Jupitermedia’s approach to selling stock photography, Meckler said.
“We’ve broadened the whole company. Now we will distribute the brands of other companies as well as our own,” he noted. Picturequest distributes a number of third party rights-managed and royalty-free brands while Creatas distributes more than 20 royalty-free brands.
Meckler said this new element will let Jupitermedia form reciprocal agreements with other stock distributors around the world. Through its subsidiary Dynamic Graphics, Creatas has sales operations in the United States, the United Kingdom, Germany and Australia. Creatas also has distribution arrangements with image sellers in 46 other countries. Meckler said the size and quality of the combined Creatas/Jupiterimages division should make it easy to negotiate more international distribution deals with favorable terms.
According to Meckler, Creatas owns more that 10,000 images and has a “perpetual license” for 100,000 more. He defined a “perpetual license,” as one allowing the company to sell an image indefinitely without paying additional royalties to the copyright holder. Creatas also distributes some 500,000 images for third-party suppliers, ranging from Corbis to BananaStock.
In a recent conference call, Meckler told industry analysts that Jupiterimages plans to create an additional 85,000 company-owned still images this year and will soon be producing high definition video footage and Flash footage for stock.
Meckler said Jupitermedia is working on more possible acquisitions, but none as large as the Creatas purchase. He provided no details.
Creatas, LLC, is actually structured as two entities. Creatas, LLC, and its Dynamic Graphics division own Picturequest, Creatas and Liquid Library stock distributors. They also own publications like Step and Dynamic Graphics magazines and training programs for the graphic arts community. Meckler told analysts that Jupitermedia will promote the Jupiterimages division in the newly acquired magazines and on existing Jupitermedia web sites.
The Jupiterimages division now has about 80 people on staff while Creatas employs about 200, Meckler noted. He would not comment on any possible staff changes.
Though his company is muscling its way toward the upper tiers of the stock industry, Meckler does not see Jupiterimages as competition for Getty Images or Corbis, but rather for all the smaller distributors that collectively sell an estimated $1.3 to $1.5 billion in stock each year.
“We’re going after the pieces Getty and Corbis don’t have,” Meckler said.
He told analysts the company will add even more subscription services, which is a market segment that the two largest agencies have so far ignored. Subscription services let buyers download large numbers of images for a monthly fee. Meckler made it clear that his company will defend its dominance in the subscription end of the market.
"So we are going to circle the wagons and keep pulling away from anyone who tries to compete with us in that area," Meckler said.
But, in a statement that sounded like Jupiterimages does covet some Getty/Corbis market share, Meckler also told analysts that " . . . I would take it that no purchaser of images in the world is going to make a decision about buying any image in the coming months, and certainly by the end of the year, without also checking Jupiterimages.
"We will be too big, too powerful and have too many fabulous images of all types for any photo buyer to avoid looking at Jupiterimages," he added.
Dynamic Graphics founder David Moffley will stay with Jupiterimages to help the division continue to grow. Moffley who has been Chairman and CEO of the 40-year-old Dynamic Graphics Group, said his company and Jupitermedia “have similar objectives and business models. The combination makes both much stronger in the stock image business."
Jupitermedia is at: http://www.jupitermedia.com
Jupiterimages is at: http://www.jupiterimages.com
Dynamic Graphics is at: http://www.dynamicgraphics.com
Picturequest is at: http://www.picturequest.com
Creatas is at: http://www.creatas.com
Liquid Library is at: http://www.liquidlibrary.com
