Here´s the full text of the memo Jonathan Klein sent out last week, as mentioned earlier:
Getty Images is entering an important phase of our development. We remain the clear leader in our industry, and we extend that lead on a daily basis. Yet, business is changing as a result of the digital information revolution and our industry is, once again, in a state of transition much as it was when we created Getty Images in 1995.
Eleven years ago we anticipated change at a time when few saw it coming. The broader changes in the environment then provided enormous opportunity and the actions that we took allowed us to seize the opportunity and create a truly great business. We intend to do that again now.
Today, we are announcing our vision for the future. Over the coming months I will be communicating extensively about the vision and the way forward. Today, in this note, I will touch on it and give you some outline information on this significant strategic realignment.
For the past year, I have been saying that the industry is evolving. This evolution is based on two major factors: technology and marked shifts in customer behavior. These factors apply both generally and in the use of imagery. The use of broadband is helping drive the growth of new communication platforms, and the changes in the business of most of our customer base - media, publishing and advertising - are accelerating dramatically.
In addition to these factors, there are new trends that have begun to emerge. Each of these trends require us to take action:
Market power is shifting from control of content to control of distribution: In our industry, digital cameras have begun to make everyone a photographer. Furthermore, cheap enterprise software and simple but reasonably effective search engines have allowed everyone to become a photo distributor and reach a potential purchaser. The result is that it is no longer enough to have a source of content; it is no longer enough to be able to deliver it digitally; it is no longer enough to have many photographers under contract.
Images are being used differently: We live in an increasingly digital world. It is just a matter of time before most of the population will live their lives the way the early adopters and those under 25 live their lives now. Eyeballs are increasingly on digital devices of all types and so it is inevitable that imagery will be used more and more on these devices.
Consumers have more power than ever before, and will demand still more in the future: We are going through a transition that impacts all businesses. As Fortune Magazine recently pointed out, "It's partly a result of globalization, partly the digital revolution and the information economy it spawns." For us, what is most important to recognize is that the digital revolution has shifted information to customers. Once this occurs, there is an inexorable and irreversible shift of power toward customers. This is good news, especially for those who respond quickly and decisively and recognize this fact.
Regionalization is becoming increasingly more important than centralization: We have known for a long time that we are the largest business in the world in our industry. This was fine but it under-estimated our growth potential. Furthermore, at a time when the English-speaking economies (plus Japan) were driving the world, this was broadly acceptable. Now, this is no longer the case.
So, in light of these trends we have decided to take action and, thereby, benefit from them and build an even better and higher growth business.
The future of our Company will be characterized by growth, driven by continuous innovation and a dedication to serve our customers.
Innovation has always played a major role in our history; in fact, Getty Images is responsible for almost every important innovation in the industry. It must now be front and center of just about everything we do. It is central to how we approach our business as we look to the next decade and beyond.
Continuous innovation will require outstanding execution with speed, agility and flexibility and will drive how we:
- Serve customers
- Operate
- Grow our business
Now, I'd like to outline briefly the changes you will be seeing in our business. In the next week, the management team will be presenting all of this to you in detail, and what it means to you and your team.
Innovating the way we SERVE CUSTOMERS
Over the years, we have begun to see a fascinating dynamic: the more customers work on the web, the more they value personal relationships. They are also creating work that is different from what they produced even a couple of years ago. On top of this, social networking has put a completely new spin on how our customers want to work with us - they want to be in control of their own experience.
Our role: We must adapt to customers' changing requirements and continue to be agile as those requirements evolve over time.
Sales: The sales team has recognized this change and has been working over the last few months to position us to succeed in this new world.
- The top 20% of our customers - those who represent the top 80% of sales - will now have assigned, dedicated sales support.
- We are increasing our market development executives more than six-fold. More feet on the street in more cities will improve relationships and bring us closer to customers.
- We will redouble efforts in the sales/creative partnership, which has proved highly effective in reaching customers.
- We need to make sure customers view us as their first choice, and over time, their single source of content.
- Marketing: The marketing team is also making changes to get ahead of the trends in the market and support changes in sales.
- Marketing will, like sales, be aligned by customer segment to ensure that customer needs are driving our product, our marketing and our communications plans and decisions.
- Marketing will move one step closer to regionalization, with more budget and autonomy sitting in local markets - also closer to our customers.
Customer Experience (www.gettyimages.com): Our most important point of contact with customers, potential customers and the world is our web site. Our customers' main experience with us takes place on www.gettyimages.com.
- Our new web site is almost ready for our customers. We could not be more excited about the potential that this brings for us in so many areas.
- In order to move more quickly on the web, be closer to customers, drive personalization and customization and have a total focus on this critical component of the Company, a new role has been created to oversee all aspects of the web site.
Linda Ranz has agreed to take on the important and exciting position of SVP, Customer Experience. The development of the technology, project management, QA, UI and web marketing will all report to Linda. For the first time, we will have all customer facing components of our site in one place with one driver and one team.
Linda will lead the Customer Experience piece, reporting to me, and Mark King will lead Enterprise Systems, reporting to Tom Oberdorf. As a result, there will no longer be a CTO role, and Pat Flynn will be leaving Getty Images.
New License Models: We already have begun to show how we are innovating with new license models and offers to better serve customers. There will be many more in 2007.
- Rights Ready is just the first of many ways we're making working with our imagery even easier.
- Stay tuned in the coming months as more are unveiled. I would love to give you all the details here and now but best not to as there needs to be some surprises later for the industry and you.
Innovating the way we OPERATE
Customer demands will drive innovation as they clearly want more choice from more sources at every level of production quality. We must be agile in the way we operate to deliver on this need. Can you imagine a day when we can get creative images from a photographer's camera to our site with the same speed and efficiency we do with editorial? That day is coming soon.
Our role: We must transform how we CREATE CONTENT. The creative content group will shift their focus to ensure that we broaden and deepen our offerings to customers and bring pictures to market as quickly as customers need them.
Change Content Creation Model: We will change the industry by taking control of our content creation while continuing to work with contributors.
- We will significantly shift costs and resources to wholly owned content and select contributors.
Change our approach to contributors: In the past, the power was with the content creators - with photographers and with us. Now, the power lies with the customer.
- Photographers wish to give us more content, not less, and we will welcome this shift. Our new contracts will be completely flexible.
- "Open"/New creative workflow: The new system will be open, easy, and efficient. The inherent flexibility of this system will allow us to create collections, products and distinguish content almost on the fly. We will create an enhanced photographer workflow that is similar to that of iStockphoto.
- In order to consolidate all content - in the same way we are bringing all aspects of the web site and the customer experience to one place - Content Operations will move into the Imagery and Services group under Nick Evans-Lombe.
Nick's group will handle all aspects of the content from beginning to end and Linda and her team will have their hands on all the levers impacting the site and Customer Experience. These changes will, I know, make us more agile, and more flexible with fewer silos.
Innovating the way we GROW OUR BUSINESS
We will continue to see significant growth in many areas while other aspects of our business will lessen their pace of growth. Optimizing our organizational structure and already successful businesses will enable us to capitalize on the areas experiencing robust growth.
Our role: We must extend our product range to add value for our customers. Growth will come from many new places and we must now make sure that we have the resources for these new areas of growth. There are many examples and I would like to share just a few.
Fuel growth of existing businesses: Many of our existing businesses have greater growth potential. I feel that now is the time to provide "super resources" to make these businesses grow exponentially. Here are just a few examples:
- Video and Film: In 2007, we will make a significant increased investment in film from ingestion to marketing to sales. Now is the time for Film. We will fund and staff appropriately, beginning right now. We are a very important player in this market and film will be one of our highest growing businesses over the next several years.
- Entertainment: We will expand entertainment through a very focused approach, which has been so successful in sport. We are uniquely positioned here, given our strong market expertise and existing global infrastructure. We will grab every bit of this market all over the world. I have no doubt that this part of our business can grow dramatically over the next few years.
- Editorial Imagery: We have a formula that works and will now be even more aggressive in expanding these businesses - both within English speaking countries and elsewhere.
- The Channel: We plan to grow our channel business aggressively by executing existing plans and applying the necessary resources.
- International Growth: International growth has only just begun and remains one of our most significant opportunities and enables us to innovate in new markets.
Create new products: We will innovate how we CREATE PRODUCT in order to accelerate growth.
- Our future lies in creating new products and markets in order to grow. The best way to do this is create products that have added value and are difficult to replicate. You already know about Rights Ready, and there are so many other new products planned that I'm not allowed to share yet - but stay tuned!
- We will move into using our images to create products which clients can license in a completed form which will allow them to go directly to their customers without additional cost.
- The Business development team is exploring a wide range of products and services that our customers' new world demands.
Partner with other respected brands: Getty Images is a respected brand and trusted partner and this presents significant opportunities to align with other respected brands. We are going to staff and fund business development to ensure that we can leverage these opportunities.
Michael Teaster is being promoted to SVP, business development, and we will separate that team into three areas: Mergers & Acquisitions, Operations and Partnerships (including portals, new products, mobile and more). In addition, we will increase the size and resources of this very important team. As part of these changes, Richard Ellis will be leaving us. Fortunately, he will still consult and help us out.
Our world is changing. It requires new vision. This is our vision.
I know there is a great deal of information to digest. As I mentioned above, in the next few days all SVPs will be holding team meetings to go through how these strategic changes will affect your team. You also will be hearing more from me in the coming months as we progress and how the realignment translates into our Key Objectives and Initiatives for 2007.
I am confident that now is the time for us to lay the foundation for future success to benefit each of us and our stakeholders.
On a personal note, I'd like to acknowledge your hard work and dedication. As part of our vision, there will be changes to some departments and job functions. This means some of our colleagues will not be part of the new structure. However, we will also be joined by some new colleagues in areas of robust growth.
I am extremely energized by our new direction, and confident that whenever we focus wholeheartedly as a team, we always succeed. This is no exception.
I would like to thank each of you, as ever, for your continued talent, hard work and dedication. It is your passion, commitment and sheer hard work that has created this amazing company and our extraordinary and enviable position in the industry. That passion will carry us forward to an even brighter future.
Regards,
Jonathan Klein
Co-founder and CEO
