In what is likely the beginning of the privatized dissolution of Getty Images' underperforming assets, Getty today announced they were dumping Scoopt, in a letter to contributors. PDN's Daryl Lang nailed it in his piece - Getty Images's Scoopt Shuts Down. Here's Why It Failed - when he writes "To work, Scoopt had to be popular enough for the average person to know about it."
So, what was Scoopt really worth?
When Getty aquired Scoopt, while they normally would have been required to disclose a purchase, because the purchase price was so insignificant (relatively speaking), it wasn't necessary. Our understanding is that the figure paid for Scoopt was significantly under $100,000. Essentially, with little to no revenue, Scoopt had built a brand on a URL with a few servers, and sold it to Getty for a tidy little profit. The founder, Kyle MacRae (LinkedIn: Profile), of the company was kept on as an employee (intereviewed here), and his new title "Director of Citizen Media" was not substantial either, and then, well, he was laid off in March of 2008.
To expand on Lang's point, citizen journalists knew about places like Fox's uReport, as well as CNN's iReport citizen journalism site and, to a lesser degree, others. Yet, they didn't know about Scoopt, but "picture-phoning" is popular, just check this link to learn more about it. Yet, if Scoopt had been saavy, they would have partnered with Fox/CNN/et al to be a distributor of submitted citizen journalist sites, even granting the originating network television exclusivity, but then licensing online and print versions, creating a revenue stream. Unfortunately, this, among a number of other ideas were put forth in a business plan that ended up being shelved, with Getty investing very little in the Scoopt brand.
Here is the letter that Scoopt sent out to contributors:
Dear Scoopt members,The problem is, Getty is a great integrator, but not an innovator. Getty has never invented anything. They did a roll-up of companies, and now they are jettisoning those that are impacting their bottom line. Makes sense, of course, and Scoopt likely contributed little to Getty's bottom line, and moreover, was likely a distraction from other more profitable ventures.
I am sorry to inform you, as a member of Scoopt, that we have decided to close the business. We will not be taking in any more imagery after February 6, 2009 and will close the upload application. We will also cease licensing any imagery through Scoopt on that date.
Our experience with Scoopt has taught us some very valuable lessons. We remain convinced that there is a demand for this kind of material as part of an editorial product, but for the moment are choosing to focus our energies within Getty Images on our core products in news, sport and entertainment.
It has been a pleasure working with Scoopt, your pictures have provided a fascinating snapshot of the circumstances in which you find yourselves and have added valuable viewpoints to the news service we provide our customers on a daily basis.
A holding page will remain until March 6, 2009 but from February 6 we will not be accepting any new imagery and so the upload path will be closed, and the galleries shut down, at which point all rights over the photos revert to you, the copyright holders.
All Scoopt content that also appears on Getty Images will initially be reviewed and any Scoopt member that has photos deemed to have longer term value on Getty Images will be offered a separate contract. To be clear, on February 6, 2009 all Scoopt content will be taken down from the Getty Images website and only be reposted, once the relevant contractual relationship with individual photographers is in place.
If your material is selected for continued inclusion on Getty Images, you will be contacted directly. We will be posting some FAQ’s on the website to try to answer any questions you may have, so please do refer to this section.
Please note that we will be retaining your contact details in order to service any outstanding payments that are due and in case there should be need for a further communication update. If you would like your details removed from the database, please respond email@example.com with the words Remove Details in the subject line, and citing your Scoopt member ID.
Please use the email firstname.lastname@example.org for all correspondence regarding the closure of Scoopt
Thank you for all your enthusiasm and support which have made Scoopt such an exciting place to work.
From the team at Scoopt
The big question is - what division is next? While the wire service end of things brings in between 1/4 to 1/3 of Getty's revenue, how much of it is consumed by the costs of production? In the short term, Getty has had some great successes with wire service coverage of the new administration, so news coverage in Washington as well as other hot spots could see a Q1 and Q2 uptick in revenues, but is that sustainable, and will the bean counters look at that revenue with a long view, or is it about short term spikes in net revenues to sell off the individual parts?
Time will tell.
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