A Photo Trove, a Mounting Challenge
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Corbis, started by Bill Gates in 1989, owns millions of images, some of them kept underground in a former limestone mine in rural Pennsylvania.
Correction Appended
In some sense, the iconic photograph of Rosa Parks recreating her quiet act of rebellion on a bus in Montgomery, Ala., belongs to every American. But as a practical matter, it belongs to Bill Gates.
Anyone wanting to use that image in a book or on a Web site must first license it from Corbis, a corporation founded and owned by Mr. Gates, who is better known for starting Microsoft. The photo is among the 11 million prints and negatives in the legendary Bettmann archive, which Corbis bought in 1995.
Since that first purchase, Corbis has spent tens of millions of dollars acquiring image collections and other companies, hired more than 1,000 people and set up two dozen offices worldwide. Although Corbis says it brings in some $250 million a year in sales, it has yet to turn a profit.
Now the company is shuffling its top executives as it takes on new challenges, building up a business in rights management and plotting its response to the rise of low-cost online photo services that threaten to undermine its lucrative stock photo sales.
The company plans to announce Tuesday that Gary Shenk, the president, is being made chief executive as well. Mr. Shenk, 36, is an expert in rights licensing who has risen rapidly through the Corbis ranks since he was hired in 2003 from Universal Studios, where he started a small licensing unit.
Steve Davis, 49, the departing chief executive, will continue as a senior adviser after 10 years of running the company.
The move into rights clearance, which involves sorting out the questions of who owns what material and how much they should be paid for its use, is a departure from the original vision for the company.
Mr. Gates started Corbis in 1989 with the idea that people would someday decorate their homes with a revolving display of digital artwork — interspersing, say, Stanley Tretick’s shot of John F. Kennedy Jr. playing under the desk in the Oval Office with photos of their own families at play.
That is not how things have worked out. But meanwhile Corbis has built up a formidable stash of historical photos, including those in the Bettmann Archive. In 1999, Corbis acquired the licensing rights to the Sygma collection in France, and two years ago it did the same with a German stock image company called Zefa. It licenses those images for an average of about $250 apiece.
Corbis also owns digital reproduction rights for art from the Hermitage Museum in St. Petersburg, Russia, the Philadelphia Museum of Art and the National Gallery in London.
In all, Corbis represents or owns the rights to more than 100 million images, including some of the most famous photographs ever — Arthur Sasse’s photo of Einstein sticking his tongue out and Marilyn Monroe on the subway grate. And Corbis handles the licensing of millions of other images on behalf of thousands of photographers.
The archival photos bring in about half of Corbis’s sales, but the company also has a stable of professional photographers who generate stock photos for advertising and media clients — images of children on playgrounds, people sitting in business meetings and men in khakis swinging golf clubs.
Over the past few years, Corbis has moved beyond newspaper and magazine clients to pursue advertising and graphic design agencies, as well as corporate marketing departments, which are turning increasingly to high-quality stock photography rather than doing their own expensive photo shoots.
Those customers are also buying from Corbis’s growing library of 30,000 short video clips — mostly generic scenes of, say, people shopping or running down the beach.
What Corbis did not foresee was the rise of so-called microstock agencies like Fotolia and iStockPhoto. These sites take advantage of the phenomenon known as crowdsourcing, or turning to the online masses for free or low-cost submissions. Thousands of amateur and semiprofessional photographers armed with high-quality digital cameras and a copy of Photoshop contribute photographs to microstock sites, which often charge $1 to $5 an image.
Although the microstock business still represents a small fraction of the $2 billion market for stock photos, analysts say it is possible that low micropayment prices could take business away from the higher-priced images Corbis relies on for the bulk of its revenues.
“Think about how visual the world is,” said Barbara Coffey, a senior research analyst at Kaufman Brothers in New York who follows the stock photography market. “We have pictures on our cellphones. If I can get a reasonably clear picture and the rights are cleared and I pay $2 for it, then why would I pay Corbis $200?”
The rise of the microstock companies has been of particular concern to Corbis. For all its new lines of business, the company still gets some 88 percent of its revenues from image licenses, yet commands only about 11 percent of that market. Getty Images dominates the market with a 40 percent share.
Getty, which has grown quickly since its start in 1995 with the backing of its wealthy co-founder, Mark Getty, has a foothold in microstock thanks to iStockPhoto, which it bought last year for $50 million.
Mr. Shenk said Corbis would announce its plans for the microstock business sometime this quarter. As for the question of how a high-end company enters that business without cannibalizing its more expensive products, Mr. Shenk said the idea was to find a new kind of customer, people who would never envision buying pictures from a Corbis or Getty.
In that vein, Mr. Shenk said Corbis would make its service as easy to use as the iTunes store of Apple and hinted that Corbis would also be following the crowdsourcing model.
“More interesting and innovative things are happening on the pages of Flickr these days than on Corbis and Getty,” said Mr. Shenk, referring to the photo-sharing site owned by Yahoo. “If we can use this type of opportunity to find the next great group of Corbis photographers, that also makes it a great opportunity for us.”
Corbis is also betting heavily on its Creative Resources division, which includes rights services and recorded 44 percent growth in revenue last year, to $30.1 million.
Mr. Shenk, who will take over from Mr. Davis at the end of June, is most likely the biggest reason for that growth. When Mr. Shenk left Universal for Corbis in 2003, he took five people and an impressive Rolodex with him. Now nearly 30 Corbis employees work in rights clearance, in offices in Los Angeles, New York, Europe and Asia.
Mr. Shenk, a Hollywood veteran who is an expert in what he calls “new ways to sell media,” said he believed Corbis was offering something unique in building a worldwide network of rights experts. The business of rights clearance, he said, is often a matter of knowing whom to call, and the idea is to make Corbis the first place that comes to mind when, say, an advertising agency is trying to clear the rights to use an image, video clip, or song.
Such was the case when the band U2 made its most recent video, for “Window in the Skies,” which braided together some 100 clips of old stars like Ella Fitzgerald and Frank Sinatra, synched to the new song’s music and lyrics. Corbis helped the band’s production company negotiate a thicket of publicity rights.
Roughly one-third of Corbis’s 1,100 employees are in downtown Seattle, in an old bank building well suited to the company’s hip self-image. The vast, open, two-story space has retained several enormous vaults that once held gold bars and now serve as photocopy and office supply rooms. Conference rooms are named after famous photographers, and copies of their work cover many of the walls.
The Corbis photographs themselves are not stored in Seattle, except digitally on the computers there. And those digital images constitute only a small fraction of Corbis’s holdings. Of the 50 million items in the Sygma collection, just 800,000 have been digitized.
The prints and negatives from Otto L. Bettmann’s archive, as well as those from a few smaller collections, are kept 220 feet underground in a former limestone mine in rural Pennsylvania. In February, Corbis announced that it would be storing the Sygma collection in a preservation facility near Paris.
As ventures go, Corbis represents a small investment for Mr. Gates. He pays for large expenditures, and the company uses its revenues to cover smaller projects within the firm.
Mr. Gates’s involvement in the company is minimal. He spends only two to three hours each month meeting with Corbis management. Yet it is clear that he makes the big decisions. He has no interest, for example, in treating the undigitized portions of the image collections like one of his charities by, say, donating them to a public entity.
Despite the hands-off approach, Mr. Gates is apparently never far from the minds of Corbis employees. Mr. Shenk is in the process of relocating to Seattle from Los Angeles, and his sparsely decorated office in Seattle is evidence of the commuter life he has been leading. The only work of art in evidence one recent afternoon was on Mr. Shenk’s whiteboard, where a colleague had drawn the unmistakable likeness of Mr. Gates, peering out from behind his glasses.
“Keep up the good work, Shenk,” Mr. Gates says. “Or I’ll kill you.”
Correction: April 11, 2007
An article in Business Day yesterday about the photography licensing company Corbis misidentified the photographer who took a well-known photo of
posted by legomate at 3:13 pm
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