News
Jupiter’s 2Q: RM up, subscriptions up, online media down
Jupiter Images released their 2nd quarter results earlier this week. Surprisingly, given industry leader Getty Images’ recent difficulties in the single image RM revenue category, Jupiter reported steady growth in RM of 30% from the first half of 2006 to the same period in 2007. The company’s subscription business grew by an astounding 200% in the same period. In his conference call with analysts, CEO Alan Meckler stressed that JI is positioned to thrive in the changing image environment, unlike its major competitor (read Getty) who relies so heavily on single image RM sales.
Overall revenue of $34.7MM in 2Q07 represented a slight decrease from 2Q06 as a $600K increase in the images division was more than off-set by a $900K decrease in the on-line media division. Margins improved, however, in the images division as the company reduced its costs of goods. Meckler says the company has more clout and can negotiate better terms with suppliers (lower commission rates payable) than it could four years ago. The image division’s gross profit margin improved from 58% in 2Q06 to 60% in 2Q07. Overall, the company’s EBITDA (earnings before interest, taxes, depreciation and amortization, a measurement thought by many to indicate the true operating profitability of a business) increased from $5.3MM in 2Q06 to $7.4MM in 2Q07.
The $1MM decline in online media revenue was greater than anticipated. Meckler says, however, that this division will start to show modest growth and improvement in profitability in 4Q07 thanks to the acquisition of Media Bistro (which makes most of its revenue from its media industry job board) and to the further development of Jupiter’s re-launched trade-show and companion web-site businesses.
Throughout the analyst conference call, Meckler made usually thinly veiled but sometimes quite open references to his company’s superiority over Getty in terms of product and revenue mix. He referred to Getty’s attempt, several years ago to “put us out of business” by removing all Jupiter brands from Getty’s web-site. Ironically, with its recent acquisition of Punchstock, Getty again represents all of Jupiter’s RF brands. One can’t help but wonder whether Meckler was challenging Getty to try removing JI brands from its web-site, again.
Other points made on the call:
Meckler attributes Jupiter’s success with its wholly-owned strategy, “which everyone is now copying,” he said.
The company now expects to launch its Jupiter Superstore, a one-stop-shop destination for licensing various types of content, in June of 2008.
Jupiter has decided to put less emphasis on footage production, which Meckler says was losing money. The company will continue to distribute footage, however.
Management expects 3Q07 revenue to come in between $35.2MM and $36.2MM wit EBITDA of $7.8MM. [For reference, 3Q06 revenue totaled $33.8MM with EBITDA of $7.3MM.]
RM is impervious to micro-payment, Meckler says. He attributes JI’s growth in the face of Getty’s declining RM sales to his company taking market share. As for the RF business, subscriptions and micro-stock have a bright future. There will always be a healthy market for RM and high-quality RF, but how they are packaged and sold will change.
The company’s image division sales in the third quarter break down as follows:
Single Image and CD ROM sales (includes RF and RM): $14.2MM
Subscriptions: $6.8MM
Distributors: $6.3MM
Total 27.4MM
Posted in: Jupiter Media, News, Photographers, Stock Photo Companies
