Geography Reference
In-Depth Information
buy a reproduction licence, the royalty is tailored to the intended use and depends on the
size and placement of the photography, the medium (commercial or editorial), the print
run, and eventually on exclusivity. If the customer wanted to extend the use of a photo-
graph to, for example, brochures, homepage, l yers, posters and so on she would have to
buy a new reproduction licence and pay an additional royalty. Managing the property
and reproduction rights implies transaction cost and limits the l exibility of the customer.
As a consequence, a new licence model called 'royalty-free' was successfully established in
stock photography. When customers buy a royalty-free (RF) photo they pay a i xed price
and acquire unlimited usage rights. The royalty-free licence model thus converts photog-
raphy into a full commodity. Mark Torrence had known this licence model in the music
industry, when he founded PhotoDisc in 1991 to pioneer stock photography with RF-
visual content. Servicing graphic and web designers in the beginning, PhotoDisc launched
an e-commerce platform in 1995 and drove the company to be among the top ten of
America's 500 fastest growing companies in 1997. Like many successful agencies, Getty
Images acquired PhotoDisc in order to incorporate their technology and know-how and
to go online just a year later in 1998. In 2000, the market share of RF-images was already
assumed to reach 15 per cent in the US and 7 per cent in Europe. Today, Getty Images
gain about one third of their revenues from royalty-free images and at higher margins per
image than traditional rights-managed photography (Glückler, 2005).
In conclusion, the market for stock photography has experienced major changes,
which have only been highlighted very briel y. Nonetheless, digital technology and
royalty-free photos have dramatically shaken up the market environment, and redei ned
fundamental business parameters. As a consequence, the market now looks very dif er-
ent from what it looked like 15 years ago. It has shifted from a market of medium-sized
companies to an oligopolistic market dominated by three players that easily take a 45
per cent share of the global revenues in this sector; it has moved from localized enduring
personal relationships to a virtual business transaction; and it is transforming photog-
raphy from a licensable content to a private commodity (Glückler, 2005). This shift has
deep cutting implications for competitive strategy. The availability of e-commerce and
internet search in online picture archives disrupts existing networks of personal relation-
ships between agents and customers and turns a seller market into a buyer market. The
global dominance of Getty Images and Corbis forces picture agencies into niche strate-
gies, specialization and inter-i rm alliances. Since market visibility and the scale of photo
collections have become so centre stage, many agencies have begun to seek sales partner-
ships in order to forge alternative distribution channels or to collect additional material
and reach scale.
The aim of the empirical analysis is to analyse the growth pattern of the stock pho-
tography i eld-net of inter-agency licence agreements in Germany. An organizational
i eld-net is 'a particular pattern of both present and absent links among the entire set of
organizational dyads occurring in a specii ed organizational i eld' (Kenis and Knoke,
2002). The term is used to explicitly focus on the dyadic relations and the overall struc-
ture of relations between every pair of players in a i eld.
4. Methodology
The empirical approach to test the hypotheses of homophily, geography, popularity
bias, and multiconnectivity on the alliance behaviour of picture agencies made a network
