Klein On Stock

642

June 21, 2004

Editors Note: Jonathan Klein was recently invited to write an article for the Financial Times as part of a series of articles by major corporate leaders on their company and industry. Within the article he offers some interesting figures and statistics.

Technology has played an important role in the evolution and expansion of the imagery industry. Indeed, Mark Getty and I founded Getty Images on the belief that our industry, which provides the images used across the world by thousands of advertising agencies, designers, newspapers, film studios and book and magazine publishers, was ripe for technological innovation.

Over the course of the past nine years, the industry has been transformed by digital imaging technology, the growth of the internet, database and search technology, and e-commerce - to name just a few trends. Our business has moved from a wholly analogue, labour intensive-world to a wholly digital enterprise with enormous benefits for customers, photographers, employees, the photography industry and shareholders.

The lives of both the publishing and the creative professional have been revolutionized by these changes, which have allowed them to expand the limits of their creativity and grow their customer bases through increased productivity. As distribution costs have reduced, those funds have been ploughed into product in terms of increased creativity and innovation.

When we launched the company in March 1995, there was no such thing as e-commerce. The internet was in its infancy and e-mail was only used by the most technologically savvy people. As the internet swept across the globe and altered how both businesses and consumers accessed information, it became clear that it was a perfect medium for our business due to the obvious fact that in our case there is no physical product that needs to be delivered.

Today, the most potent technology trend facing the imagery industry is the rapid and widespread adoption of broadband technology. This will make the internet what it has not yet become - a visual medium.

We are nearing an important inflection point: broadband internet usage at home and at work is growing around the world. Europe is expected to have home broadband penetration of 20 per cent by year-end and 41 per cent by 2008, according to London-based Strategy Analytics. In America, according to the Pew Internet & American Life Project, 68m adult Americans, or 34 per cent of the total population, use broadband either at home or at work. In the Asia Pacific region, broadband use is growing rapidly as well.

The bottom line is that in a world where people have broadband connections in the home, there will be a large increase in consumer demand for visually rich websites and, consequently, increased use of imagery on the web by design professionals.

As a result of this trend we expect that images will start to appear in larger sizes, requiring web designers to select higher resolution imagery for maximum impact.

It also means that companies will begin to spend more money on the web to communicate with customers and prospects.

We also anticipate a much greater use of moving imagery on the web: the demand for stock footage will increase and may even approach that of still imagery. In response, we have recently made significant investments in digitising our film collections. Designers and art directors can now select from more than 70,000 digital film clips on our website to increase the visual appeal of websites and other web-based communications.

This trend is also contributing to the resurgence of online advertising, a medium which is just starting to live up to its dotcom heyday promise. Broadband penetration will allow internet advertising to become as visually engaging and as powerful a delivery vehicle as television.

As of late 2003, the US Interactive Advertising Bureau reported that online ad revenues reached nearly $7.3bn. And while figures for the UK and Europe are not yet available, the UK Interactive Advertising Bureau has indicated that trends in the US are being followed in Europe.

Ultimately, this trend will lead to a higher global demand for quality imagery as more marketers move beyond small text ads to an increasing use of image ads and ads that have broadcast commercial quality.

DoubleClick, the leading provider of digital marketing solutions, noted that at the end of the first quarter of 2004, almost 43 per cent of all ads served by the company during the quarter were rich media ads (ie ads which feature high-quality graphics or video), an increase of 54 per cent from the same period in the previous year.

This is dramatic data that indicates a strong shift in the types of ads we are seeing online. It also suggests significant possibilities for interactive advertising and cross-media packages as broadband usage grows even further.

Broadband will allow advertisers to be more daring and creative, helping companies to provide a richer brand experience and more cross?marketing opportunities. Morgan Stanley Dean Witter research shows that the internet beats other media in terms of ad recall - 27 per cent ahead of magazines and 23 per cent over television - highlighting the opportunity for marketers to create more memorable campaigns online.

As broadband becomes ubiquitous and as younger generations of consumers come to expect engaging, interactive experiences on devices on their phones and in their homes and cars, one thing is certain: the demand for rich media will continue to explode.

One way to ensure that the internet lives up to its potential as a leading edge delivery platform is for the imagery industry to continue to produce fresh, innovative and compelling material by the world's most talented photographers and filmmakers. The web will become what it was intended to be: a place for a rich multimedia experience, rather than just words on a screen.