The Numbers Speak for Themselves - GYI down 30%

Let's see, take $25.7M and divide it by $37.3M, and you get just over a 30% drop over 3Q of 2006. From their press release:

Net income for the third quarter of 2007 was $25.7 million...compared to $37.3 million...in the third quarter of 2006.

Meanwhile, back at the ranch:

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Selling, general and administrative expenses (SG&A) totaled $84.0 million...compared to $73.6 million...in the third quarter of 2006.

So, you're down 30%, but are still bloated by staff you just couldn't bear to terminate in your previous 'redundancies' layoffs?

"The increase over the prior year is directly attributable to recently acquired companies, the impact of changes in foreign exchange rates and investments that the company is making in areas that will drive future growth."

Perhaps those folks are being spared until it's necessary to make Q4 numbers look good, so you'll dump them just before then? Yes yes, I know you've dropped your SG&A by 3% relative to but really, come on!

To continue:

Revenue growth came from increasing licenses for editorial and micropayment imagery, digital asset management, photo assignments, and publicity distribution. This growth was partially offset by lower revenues in the company's traditional creative stills business.

Translation: We've screwed our profitability in creative stills along the way with our roll-up of all the stock photography shops we acquired, and we've seen revenue grown from the penny-ante micropayment images, and with WireImage now in our fold, and us charging $5,000 to cover an event and post images online - a.k.a. "publicity distribution", and pay photographers only $250 and requiring them to transfer copyright to those assignments, that kind of cost-to-profit ratio sure can cover a lot of losses from when we dropped from $500 average online sale to a buffet of $49 for the same thing.

Next up:

"We have made tremendous progress expanding beyond our traditional creative stills imagery business on our way to becoming a complete digital media company," said Jonathan Klein, co-founder and chief executive officer.

Translation: We're coming for you next audio and video purveyors. We're going to slash and burn prices there too, just look at what we've done "for" creative stills! You're next!

Yet, in after-hours trading, Getty is up, even with the AP reporting "Getty Images Inc. expects fourth-quarter profit to drop below Wall Street estimates...", and "Shares are up almost 6% as traders accept lower numbers on the hopes that the worst is behind the company" according to 24/7 Wall Street.

Yeah, keep hopin' and dreamin'! That, and a few of the bucks a microstock photographer earns from several sales will be enough for them to be able to afford the latte they are serving their own customers now that they are a barista as well, hoping to make ends meet that way.

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We Live In Interesting Times -Information R/evolution

And so, without further ado, the additional post that accompanies my post about Getty: (With thanks to Chase Jarvis for the heads-up on this video!)

(Comments after the Jump)

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UPDATED: Nikon D3 Spotted in the Wild

So today I've got duty covering the White House, and travelled from there to a hotel for the President's remarks on healthcare. I then spotted, in use by the AFP staff photographer - a bonafide Nikon D3, and handsome D3 strap!

The photographer seemed pleased, shooting the 24-70mm and 85mm f1.4 on the Nikon, and shooting with his 70-200 on his Canon.

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I've had mine on order (along with my 1Ds Mark III (They've Been Ordered, 9/3/07), and I look forward to having my own, so it was a pleasant surprise though, to see one in the wild.

I was amazed, when I've looked at the various files, at how well they are handling the noise issues this time around. Perhaps next up will be, if history is any indicator, a D3x.

UPDATE:
The last event for the day was the President signing the Internet Tax Freedom Act in the Oval Office with a group of Senators and Members of Congress, and there, again, was the D3, hard a work.

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Predicting the Future

Some wise philosopher once said "you can never predict the future, only your responses to it."

Indeed.

I consider that one of my axioms.

This isn't to say you can't look to signs that point to, say...the demise of Getty. I almost forgot! Let's start again.

This isn't to say You can't look to signs of what the future will bring, but predicting it? Just be ready to respond.

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How so?

Every time the phone rings, I can see my responses to every question, and follow-up question that will take place. I am not predicting the future, per se, but rather, all the potential responses to what the future holds. I am almost never surprised by an inquiry. Rather, like the branches of a tree, I've travelled from trunk to branch to limb to twig to leaf so many times, along all the possible paths, that I am prepared. Some are short stumps of a limb, like "we want your copyright...". Yoink! Branch ends. We must tread in reverse, to another branch that is more suitable, like " I will extend a license to use the work in all media for the life of the product..." instead. And we then trek further down the branch that is more sturdy, and which is well worn by repeated visits. We arrive at a mutually beneficial agreement.

Just as with a complicated travel plan, from, say, New York City to San Francisco, having a map is your answer book. So too, should you map out how you'll respond to varied questions and inquiries. At first, you'll need to consult the map. After a dozen trips from NY to SF, you'll not need the map. Then again, you'll need it part of the way from NY to LA. Then again, from NY to DC. Lather, rinse, and repeat.

Prepare your responses. When you get stumped, don't cave. Ask them if you can call them back, if you have to. Write down how you'll handle it. Perhaps, instead, you can say "I think I have a solution, let me put it in writing and e-mail it to you..." and do just that. Get out of the hotseat and cool off, consider what they want, and how you can give it to them, reasonably and in a way that you are comfortable with. Then, memorialize it in writing, and send it off.

Which results in another of my axioms - "luck is what happens, when preparation meets opportunity."

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It's The Witching Hour - Are You Ready?

Man, you can't make stuff like this up! Checking the witching hour at Wikipedia, and you learn "the witching hour is the time when supernatural creatures such as witches, demons and ghosts are thought to be at their most powerful, and black magic at its most effective. " And, lo and behold, the double whammy that is Halloween, followed by the fact that we are at the point where, perhaps, Getty's CEO is wishing for some black magic to come to his rescue, since they announce their 3Q financial results tomorrow, 11/1 - a Thursday, after the bell, just in time for them to get sacked all day Friday - a surefire way for JDK to have a really crappy (and well deserved) weekend. To take a page from storybook television..."When we last checked in with our intrepid executives at GYI (GYI - The Downward Full Court Press Continues) things weren't going so well. And, well, that continues. At that point, GYI was trading at the loftly (relative to now) figure of $31.40, and, Wednesday's close was at $28.93, down a net 8%. If it hadn't been for a late day rally, it would have been significantly more than that. Setting themselves up for a fall again, hmmmm?

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Let's see, When I wrote back on August 4th (I told you so? No, not really. (Well, maybe, sort of)), and then again prior to that on 7/8 (About the only good 'Short'-sighted Idea I can find) about their continued downfall, that brings us up to....yes, today (again). For those of you wanting to know what I might have written about GYI in the past, here's a quicklink search for you. Plenty to read and catch up on as it pertains to all their missteps, so you're well informed for their earnings call. Feel free to dial in and hear the spin on their latest "net revenues are less than expected" spin that I expect out of Seattle - the toll-free call (1-800-432-7890) gets it to you live at 5pm East, 2pm West. Missed it? Call for a replay through Saturday night at 1-888-203-1112. Wanna listen live? Hit http://gettyimages.com. All the details can be found here on the Getty site.

How do I draw the conclusion that "net revenues will be down"? Well, I further expect to hear "...but volume is up...", which sounds remarkably like "we'll loose a little on each sale, but make it up in volume..." to me. Well, when your average sale for online content was around $500, and now it's $49, that's gonna have to be one helluva lot of volume to overcome that slash-and-burn mentality. Or is it "churn and burn?"

Exhibit 1 - The Washington Post reports that "CNet Sells Webshots for $45 Million". Not bad? Actually, it's horrible for CNET, and amazing for Webshot's founder Narendra Rocherolle. How so? Well, let's just say he took the dot-com frenzy to the mountaintop - TWICE - and kicked ass and took names both times. See, he sold Webshots to ExciteatHome for $82M and then, when ExciteAHome went bankrupt, he bought it back for $2.4M (a $83M nifty profit), and then re-sold it to CNET for $70M. Hmmm, that's $153M in the plus-column, after a deuce of a sale. Nice job Narendra. Though, CNET is following ExciteAtHome's lead, selling the Webshots unit for a loss of $25M after three years. Not that I know much about Narendra, but maybe he should be on the short list for JDK's job once there's an opening? At least he would be a wall street darling.

Where does this leave us? My colleague in the blogosphere Dan Heller has posted just three posts following his calling me out on August 6th for my "analysis" of Getty. One on August 8th promoting his appearance on the Discovery Channel, and a teaser and then announcement of his being interviewed about the future of photography on August 30th. That makes it just over two months since Dan's had anything to say. Eerily silent. To make my prediction of another 20% drop in GYI, the stock will have to plummet almost $6 in the next few days. Can it make it by the end of Friday/Start of Monday? Could be. There's chatter over on the Yahoo message boards, about all this, but that's probably positioners trying to make a quick buck, maybe not. I know, and will repeat my previous statement that I have not, nor do I plan to, own any GYI. My 9/18 piece (Getty (GYI) Hit New 52 Week low) had a reference to "...Barbara Coffey, in a client note, cut her rating on the stock to "Sell" from "Hold," citing the company's recently reduced prices for images to be used on the Web. She reduced her target price to $24 from $36...Still, the analyst said sales and profit in the December quarter and 2008 will come in lower than previously expected."

So, perhaps sub-$24 isn't so far off? We shall see. Maybe I'll be all wrong on this one - fine by me. If that brings Dan Heller back, I'm ok with that, because I thought he made some good posts and contributions to the mindset that is business-reality for photographers.

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A Sense of Immediacy

Yesterday (and that would be Sunday, as I am writing this) I did a family portrait. It was more for a friend than a straight-up client. (Note - they paid the sitting fee). I said it would be a few days for them to see the files, and they'd be able to see the images online. It was also done at the end of the day - you know- golden hour light. Park setting, creek below, family on a bridge. You get the picture.

So, what do they want?

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The photos now, of course. Yes, they saw them on the back of the camera and were happy. No, they don't need them until the end of November (or so they said), but they do want them now.

What do I do? What do I say?

Of course!

They want the online gallery. I'm working on it right now - the files are processing as I type this missive. By delivering to this client when they want, how they want...what will they do? Aside from place print orders, they'll tell their friends! "Man, this guy who did our portrait, he was so easy to work with, and we got our photos so fast it was crazy!"

Three years ago, I ordered 1,000 custom silk-screened CD's. It was somewhat costly, yet it's amazing how, when a client burns a duplicate of my CD (and few have figured out how to do that on the machine in their cubicle, surprisingly) and hand-writes with a Sharpie on it the information, how, somehow, they call and say "can we get a second CD burned and sent. We like the way yours looks." Sure, no problem. Those CD's have paid tenfold what it cost me, just because of the appearance of the disk. (For a CD output charge that's $175, a second CD runs 50% of that, or $87.50. Check pricing at dc photographer pricing, for more on those charges/fees.)

Yet, we are running short on those, with just a few hundred left, and more and more of our clients are looking for online delivery. No more FedEx/DHL shipments. Clients want them uploaded instead. I foresee a day in the next 12 to 18 months where a majority of my clients will have shifted to online delivery requirements, just as they transitioned from wanting digital over film. I already have over a dozen who want online delivery, and no CD's.

Anticipating what your clients want, and assisting them in getting exactly what they want, how they want it, and, where necessary, hand-holding them through the process in the beginning, will make you indispensable to them. Further, delivering it when they want it too, ensures you can continue to enjoy their good graces, and the longevity of benefit that accompanies them.

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A Cautionary Note: The Un-Changing Photographer

Ten years ago, if I'd offered to wager a dollar that Blockbuster Video would be struggling now, heck, even five years ago, I'd have had a line of people willing to take my "easy bet". Yet today, against innovators like Netflix, iTunes, and so forth, the concept of going to the video store to get a movie, and then paying late fees, seems antiquated and just silly.

Titans of industry - Pan Am, IBM, and Kodak, are but a shadow of their former selves, or gone. I had to chuckle at the repeated presence of Kodak and Fuji hawking film at this past year's PhotoPlus Expo. They're rearranging deck chairs on the Titanic.

What of previously "hot" photographers? One I recall in particular was photographer Aaron Jones, aka The Hosemaster.

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Aaron invented an amazing device that allows you to paint with light. After selling it for $6k and up for some time, he sold it to Calumet. Now, I don't know where Aaron is right now, but he's certainly not stayed at the peak he once was, nor anything resembling it. For all I know, he's making a great living doing something else, or shooting magazine work somewhere in the midwest. the point is - he's not repeated his former success as the toast of the town.

I recall a time when the legendary Eddie Adams sought out professional counsel to get his work "rediscovered" by young twenty-somethings who'd never heard of him. The consultant and I discussed the challenges she faced, and how she was able to get people to find him and his talent once again.

Recently, it came to my attention that a highly notable photographer wasn't aware of who Jay Maisel is. The literal master of color who blew people away with his surreal chromes hadn't been a known quantity to someone I consider a major figure in today's photographic community.

Why is this?

Look to current lighting guru Michael Grecco. This Los Angeles photographer is reinventing himself with his new book Naked Ambition: An R-rated Look at an X-rated Industry.

Grecco is taking his considerable talents and turning them onto a subject that doesn't get a great deal of attention in "learn-ed" photography circles. I picked up a copy during one of his talks, and, while it's NSFW, it's certainly a fresh perspective done with style and class.

He's even got a documentary video project to accompany it, and is traveling around the country to discuss his work, both from the past, and this current project. If it comes to your town, make it a point to check it out.



On another note, and arguably on the other end of the spectrum, is Jim LoScalzo's book -Evidence of My Existence that I wrote about back in June (" Go Jimmy Lo", 6/27/07), and is now available. (Check the link from June for some amazing videos that are essentially a prologue to the book).

In it, Jim takes another look at his life, and makes changes that are more geared towards a new family lifestyle, and evolves himself to that end.

Evolving, changing, is not about evolving to survive, per se, or evolving to succeed. Instead, it's about evolving to a place in your life that is what you want, and how you want it.

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Turning Down Business

Do you know who your target audience is? Who it is not?

Every so often, I get inquiries about nude/boudoir photography, and I don't do that type of work, for several reasons. However, I do know of an exceptional person who does, and I refer them to my friend/colleague. On occasion, usually in the Spring, I get a call or two asking if I do senior portraits - I do not. Again, I refer these folks to someone I know. Unless you're a boudoir or senior portrait photographer, the above are probably good examples for you too of the type of work you also don't do. From this point, it's about refining your message even further.

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Editorial? Portraits? Reportage? Commercial?

Sometimes, you have to make choices, other times, no. The above can co-exist, however, each distinct client base needs to see you in your best light, with best examples of that type of work. Perhaps the way you do this is to, for example, have your wedding photography on a separate website from your editorial work. I have talked several times to photo editors who, when I asked how they came to call me said "I did a search, and first eliminated all those photographers who do weddings..." because they had seen weddings as an option on their website.

You also should understand the power of "no". As in "No, I won't shoot your magazine assignment for $100...", or "No, I don't do pro bono work for for-profit companies..." It's these types of requests that come in...."it'll be a great opportunity for you...", or "everyone will see your photo credit....". The next use of the word "no" comes about for types of photography. As in "no, I don't photograph nudes..." or "no, I don't photograph Bar Mitzvahs..." and so forth.

I know many a photographer who should say no when asked about a particular assignment. Yet, they don't. They simply say "sure..." and then muck it up, producing sub-par results. IF you're going to be this type of a photographer, at least hire assistants and production people, and so forth - specialists - who can hold your hand through the technical issues you'll encounter that you've never had to think about, or deal with. This maximizes your likelihood of success. Far to many a New York photographer can't light themselves out of a windowless room, yet can deliver amazing images because they hired the right assistant who actually does understand strobes and softboxes and transfer edges.

By focusing on your target audience, and delivering in your style is the surest way of sticking around.

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