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Getty consolidating channel, running test in the Netherlands
Getty Images’ RF distributors in the Netherlands learned yesterday that their territory will be the location of an interesting test on the part of Getty images. The move comes as part of an on-going effort to consolidate the channel business, world-wide where Getty has ended its distribution agreements with over 100 channel resellers in 2007 and, the company says, is focusing its efforts on partnering with only its performing channel distributors. The test in the Netherlands entails ending its agreements with all its distributors there in order to assess the added value the distributors bring vis-à-vis Getty’s wholly-owned office in that territory. The Netherlands distributors affected are Van Beek Images and Image Select.
While this may appear to be the beginning of a move dreaded by many of Getty’s channel distributors - to withdraw from the channel business altogether -- in fact, the test may represent their interest in doing just the opposite. According to sources, Getty will gauge whether its own local office can pick up the slack from the loss of channel revenue in the territory. Assuming Getty Amsterdam can’t fill the revenue void left by the absence of channel revenue, Getty will have proved the channel can reach customers its own office cannot, and so become a more valuable ally with the potential to distribute its other products, such as RR, footage or Pump Audio. If the local Getty office more than makes up for the lost revenue, Getty will have found evidence supporting keeping the channel as an RF pipeline only, rather than pushing other products through it.
Mathematically, Getty’s local office needn’t exceed the gross revenue of the channels because Getty books 100% of the self-generated sales and only 60% of channel-generated sales. If we assume Getty pays on average about 20% commissions to its RF photographers, then $100 of revenue generated by a channel distributor means $48, net to Getty ($100 less 40% = $60, less 20% = $48.) Getty’s local office, on the other hand, only needs to generate $60 in gross sales to match that $48, net after paying the photographer’s share. Nonetheless, many argue that even with those better odds, the local Getty office has a tall order. Customers don’t go to Van Beek or Image Select to find particular images from particular brands, goes the reasoning, they do so because they like working with those companies. Given the huge and varied supply of RF imagery Getty’s brands compete with in today’s markets, it’s unlikely the distributor companies won’t be able to supply the client with the quality and quantity they need, even without the Getty material.
According to Duncan Beard, Getty’s Director, Indirect International Sales, “ We are consolidating our channel , to only working with partners that perform and work in partnership with Getty Images. This will benefit our remaining partnerships. We are 100% committed to our long term channel strategy, and to our partners that perform. We are always open to evaluating new partnership opportunities, and working with partners that perform”
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