The people at Getty Images have their pick of literally millions of pictures. Perhaps their tastes run to a photo of a tongue-wagging, slam-dunking Michael Jordan from their company's Allsport collection. Perhaps they prefer a classic image from the famous Hulton Getty archive.
But one can only guess at what those tastes might be, because within its new headquarters, which it moved into six months ago, the walls are completely bare. Sure, it's ironic: The world's largest stock-photography company has no photos on display. But it's also understandable. The people here have been busy.
Since the company moved last September to an office park just outside Seattle, Getty Images has acquired its two largest competitors, has nearly doubled its staff (from 1,400 people to 2,600 people), and has added 10 million images to its collection (bringing the final count to somewhere around 70 million images). That's just the latest growth spurt for a company in fast transition — from a business rooted in one of the oldest technologies (film) to a business rooted in digital technologies.
Indeed, Getty is at the forefront of Web-ifying and digitizing the $1.5 billion-plus stock-photography industry. It is racing to replace its paper catalogs and its celluloid film with Web sites and bits and bytes. For its customers (primarily design firms, advertising agencies, magazines, newspapers, broadcasters, and filmmakers), the process of digitization can't happen fast enough: In the last quarter of 1999, Getty generated $79.9 million in total revenue, with more than 30% of that figure coming from e-commerce. This year, its Web revenue alone may top $100 million.
Getty isn't just becoming more digital — it's becoming more dominant. It has made 13 major acquisitions in the past five years and is in more than 50 countries now. And, although its acquisitions and investments have recently put Getty in the red, that situation is likely to change.
It's amazing what happens when growing Web revenues meet falling costs. The process of repeatedly copying a piece of film costs $238 per image. Digitizing a photo involves a fixed cost of about $45 — and nothing to copy. But Web-based change is about much more than lowering costs. Getty has an opportunity to play in a market where the entire process can be nothing but Net. Shopping experiences, products themselves, customer service, even delivery systems — all of those can be fully digital.
Taking advantage of that enormous opportunity requires enormous change, says Mark Getty, 39, the company's cofounder and chairman. (Yes, he is related to that Getty — the late J. Paul, oil tycoon and business mogul. J. Paul was his grandfather.) As it reinvents its strategy, Getty is also reinventing its culture, its relationships with customers — the very way that it does business. "You need to change analog-business rules to meet Web-deliverable rules — not the other way around," Getty says. "The Web isn't an electronic storefront to do business in the old way. The Web is the business."
Jonathan Klein, 40, cofounder and CEO of Getty Images, believes that his employees are grasping the pace, style, and values that it takes to win on the Web. During a recent "town-hall" meeting, Getty celebrated its integration of the Image Bank, formerly one of its largest competitors. As employees paid tribute to various team members, some rather striking numbers surfaced: In the space of about 90 days, Getty had relocated the Image Bank headquarters to Seattle, had launched an Image Bank Web site with 50,000 newly scanned images, and had integrated 3,000 Image Bank images into one of Getty's Web sites.
That kind of speed, says Klein, shows a Web culture at work: "We've realized that we can be digital in the way that we serve our customers and deliver our product, without losing focus on the artistry of photography. There was a fear that once we digitized things, our reverence for photography would be diluted. But there's creativity in both spheres. The people who help create great images are no more creative than the tech folks who create great functionality around our sites."
Weaving a Web Culture
Would you like a snapshot of a business rooted in the old economy? For decades, this is how stock photography was sold: A customer would riffle through pages and pages of expensively produced color catalogs, looking for the perfect image for a project. If that method didn't work, then the designer would pay a fee to an image company, where a research assistant would sort through thousands of file drawers to help find that perfect photo.
Finally, after lots more phone calls (and perhaps after repeating the process with a different stock agency), a FedEx package would arrive, containing the art that the designer had chosen — a square of film that would have to be digitized and eventually returned to the stock agency. The process took days, if not weeks. And there was rarely much help available for designers who were working late into the night or rushing to meet a tight deadline.
Now, how about a snapshot of that transaction in the new economy? A designer surfs Getty's integrated Web site, where most of the company's brands, ranging from funky photo art to serious illustrations, are available in one location. A key-word search plows through more than 200,000 images, and returns a series of relevant images to the designer. A rough image is available immediately for free to drop into layouts. Buying a final image is simply a matter of entering a credit-card number and downloading the image. A cumbersome process that used to take days or weeks is now a streamlined process that can take minutes.
Getting to this point required money and technology, extensive training, and radical business restructuring. More than anything, though, it required cultural changes. Getty Images was, and is, an amalgam of acquired entities, most of which were once competitors. Getty began with two big acquisitions: London-based Tony Stone Images, one of the world's leading stock-photography brands, known for its superior artistic quality; and Seattle-based PhotoDisc, a startup that pioneered a new business model — images delivered on CDs and available for a flat, onetime fee for nonexclusive rights.
The companies could not have been more different. Mark Getty recalls that in his early days of helping to run Tony Stone Images, people there railed against digitization in general, and fought against the royalty-free model in particular. "People from Tony Stone refused to let PhotoDisc become part of the industry trade association," recalls Getty. "Then we bought PhotoDisc. There was complete shock."
From that rancorous beginning, Getty and his senior colleagues had the task of developing a new culture that would be digital, creative, and consistent. Sally von Bargen, 51, president of the company's professional division, says a summit meeting proved to be a turning point. The management teams from both companies talked about the merger, and about the likelihood that the integration would fail. Each group was asked to rate its own culture as well as that of the other group, and to identify strengths and weaknesses in both cultures. "In that moment, the teams came together, because we recognized that we had a common agenda — and that was to redefine both cultures and to move them closer together," von Bargen says. "We had an opportunity to create something new — to bring forward the best of both companies."
Another factor helped to develop the new culture. The company reorganized its business (and launched its Web sites) around customer types rather than around brands. Four distinct Web sites segment the market: gettyone.com targets advertising professionals and designers; gettysource focuses on the press and editorial users; gettyworks aims at small-business customers; and art.com is for individual consumers.
But the biggest factor driving the cultural change, most everyone agrees, has been the growth of the business itself. For example, revenue for the Tony Stone line grew by 30% during its fourth quarter last year, while revenue for the stock-photography industry grew by about 8%. Business success has a way of calming fears.
John Hallberg, 43, president of art.com, offers a case in point: "About a year ago, one of the longtime account executives for Tony Stone was in on a Saturday. He had been out of the office the day before, and he noticed that a client had done some business on our Web site on the day he was out — and that he had gotten a commission on the transaction. All of a sudden, he understood the difference that the Web would make for our business and for him. The account executive said, 'I think I'm going to like this Web thing just fine.' "
Shannon Ballon, 25, winces slightly at the sound of her own voice booming through the computer's sound system. A few of her colleagues in the room — customer-service reps in gettyone's call center — smile sympathetically. They are all research specialists who help customers find images from Getty's vast collection, as well as troubleshoot customer problems. They've gathered for an "opportunity forum," in which they critique each other's responses to customer calls. Each of them will get a turn in the hot seat.
"Hello, this is Shannon. How may I help you?" Her tone is professional and friendly, the equivalent of a hotel concierge wearing a suit and gloves. A calling customer would never guess that the person dispensing this service is a woman with spiky red hair and a tongue stud. As the call continues, it's clear that this customer is Web-challenged. Ballon's boss has left her a note instructing her to go to gettyone.com, to review some images for a design project, and to order them — if they haven't been ordered already by someone else in the department.
Ballon patiently steers the customer through the site, telling her where to enter image-reference numbers and find pricing information. "Okay," the customer says. "Then I have another number — 600K72dpi? I'm not sure what to do with that."
"Those numbers probably refer to the file format that you want to use," Ballon explains — which wins knowing looks from the other reps. "The '600K,' or 'kilobytes,' is the size of the image, and the '72dpi,' or 'dots per inch,' is the resolution of the image."
"Ohhh. Okay. Now, how can I tell whether we have already bought it or not?" After a few more clicks, Ballon guides the customer through an online purchasing history. The image has not been ordered, Ballon tells her.
"Um ... okay. Can I get these images mailed to me overnight?"
At this point, the reps erupt in giggles, almost drowning out Ballon's explanation that the images can be downloaded right now.
The group's critique is supportive and subtle. Margret Campbell, 33, a striking woman with black-and-mahogany hair that is topped by platinum-blond bangs, commends Ballon's pacing and approach. "You didn't talk down to her," Campbell says. "You didn't cut her off with an answer, even though the answer was immediately obvious."
This is how Getty Images is winning on the Web — one call at a time, one download at a time. This call center in Seattle, one of 11 that the company operates, handles an average of 6,000 inbound calls a week from Canada, France, Sweden, the United States — all around the world. The department has almost doubled in size during the past year, while its goals have become more and more ambitious: It aims to answer 93% of all incoming calls within one minute.
"One of the biggest messages we had to deliver to people was that moving to a digital-business model was about high-tech and high-touch," Hallberg says. "We had to integrate the people side of our business — the account relationship and the knowledge that we have in our sales staff and our research staff — and we had to translate that knowledge to the Web team. At the same time, we had to get our sales reps and our service reps to understand that their jobs weren't going to disappear."
The New Logic of Web Value
One day in September 1996, Mark Getty got a call in his London office. A sales rep at Tony Stone had just sold an image for the largest asking price in the history of the company up to that point — 39,670 pounds ($63,000 USD). Wouldn't Getty like to go downstairs to the sales floor to congratulate the account executive who conducted the sale? he was asked. Certainly, he replied. As Getty shook hands with the rep and gave her a celebratory bottle of champagne, he asked about the sale. How did she come up with her asking price? Well, she replied, she had asked for more at first, to which the customer had responded that he could get a photo from Stone's competitor for half of the price that she'd offered. "But our photo is twice as good," she countered. So the two sides negotiated the historic final price.
But Getty, thinking about the company's elaborate, 92-page pricing guide, pressed her again. Where did her original asking price come from? She shrugged. "I just thought it was a really good photo."
That transaction, as successful as it was, is also a legacy of a pricing system that is both enormously complex and strangely random — and that has plagued the stock-photography industry since its inception. Every company starts with "list" prices based on obscure algorithms that take into account company size, volume of business, how a photo is used, and duration of exclusive rights. But reps routinely discount or increase prices based on what it takes to close a deal.
Getty and his colleagues realized that if one of the basic promises of the Web is simplicity — of selection, of acquisition, and of service — then they would have to drastically simplify their pricing process as well. So Getty handed down an ultimatum. Forget 92-page pricing guides. The new pricing guide would be one page. That one-page solution became a slick digital form on the gettyone Web site, where customers answer 12 questions and get back a price instantly. What's more, once a customer purchases a photo online, gettyone's Web site immediately updates that photo's licensing rights in the company's database so that the image is no longer available to other customers.
By letting the logic of the Web guide its business, Getty Images has found new ways to add value to its products. In its digital lab in Seattle, windows are covered with black cloth to block out sunlight, and a string of Christmas lights serves as desk illumination in darkened rooms. In three adjoining rooms, thousands of images are scanned, color-corrected, digitally retouched, and readied for Web distribution. Two shifts of technicians digitally scan an average of 750 photos every 12 hours. A team of artists retouches those scans — erasing bits of dust, eliminating flaws, and adjusting color balance.
In charge of the whole color-digitizing process is Peter Constable, who calls himself the "saucier" at "Chez Colour." His team isn't just turning film into pixels; it is adding value. As each photo is scanned, technicians record color values and monitor color settings. That information becomes a meta-tag on the photo file so that when customers purchase the photo, they can use that information to control their computer settings in order to get more accurate color. The digital artists on Constable's team also create special options in some files, with objects that are digitally laid onto transparent backgrounds, so that a designer can pop those files into a layout and can have the designer's background layout show through. So, for instance, a glass of water takes on the color of a table in the image that it's inserted into. "We've added a whole new level of service that was never available before," Constable says. "And it's only because we're digital that we can offer it."
All told, the development of Getty Images represents a remarkable portrait of Web-based strategic change and business growth. And challenges become clearer all the time. "The process of really changing your skin is painful and difficult and endless," Mark Getty says. "Anyone who tells you otherwise is lying."
Cheryl Dahle (firstname.lastname@example.org) is a Fast Company senior writer. Contact Jonathan Klein by email (email@example.com), or visit Getty Images Inc. on the Web (www.gettyimages.com).
Sidebar: Banking on Ideas
The Internet economy is an idea economy. But what good are ideas that don't get implemented? That's why Getty Images launched its Idea Bank committee — 10 people who meet once a month. Their job? To funnel ideas from the company's 2,600 employees to the person best equipped to make a decision about whether to move forward, and how.
The group has no formal leader. It processes between 40 and 80 ideas a month. Some of the ideas are small and relate to company culture; other ideas have had a huge effect on Getty Images and its customers. Based on multiple requests, for example, the committee lobbied for an option to allow customers to create customized packages of CDs by choosing their own mix of images. The customization option now accounts for more than 40% of both sales-promotion and up-sell revenue.
"This group is one of the building blocks that make the company different," says Tara Butler, 30, vice president of business affairs for gettyone and one of the founders of the Idea Bank committee.
One benefit of the committee is that since ideas become public immediately, an individual idea can't be squashed by only one manager. More important, the committee creates an environment where people are motivated to make suggestions, because those people know that their ideas will be heard. "It's a grassroots thing," Butler says. "If the process were more structured, I'm not sure that we would get the same results."