Picture This: Getty Images May Buy Jupitermedia

Rumors are circulating in the mainstream press that Getty Images (GYI), the number one stock photography company in the world, may purchase Jupitermedia Corp (JUPM), the number three stock photography company behind Bill Gates' Corbis, for an estimated $450 million.

The rumors were first reported in the New York Post earlier today and are responsible for an impressive 26 percent gain in stock price today for Jupitermedia. Getty's stock was also up on the news.

Market Threats
Both Getty and Jupiter's stock prices have been under significant pressure over the course of the last few years. A combined Getty/Jupiter would certainly bolster Getty's already clear position as the leader of the approximately $2 billion a year stock photography market. And all of this would seem to make sense at least for Getty and Jupiter, but are there bigger changes afoot in the stock photography market?

The biggest considered threat to the traditional stock photography market over the course of the past few years has been the microstock market. Both Getty and Jupiter have invested in microstock businesses. Getty bought the microstock leader iStockphoto for $50 million last year and Jupiter increased their stake from 49.7% to 90% in Stockxpert.com in December last year. Corbis does not have a microstock presence but announced on their analyst call last week that they would be entering the microstock business in 2007. Corbis estimates the microstock market at about $50 million of the overall $2 billion total stock photography market.

Personally I think that the microstock business does not represent the future of the stock photography market. Even as Getty and Jupiter embrace the new medium and cite spectacular percentage growth, the acquisitions of both iStockphoto and Stockexpert.com were in my mind also about stopping a threat.

And the biggest threat that microstock agencies represent to the traditional stock photography business today is that they creep out from beyond the $1 per image into the more lucrative $200+ per image that Getty, Corbis and Jupitermedia rule today.

By owning the top players in the microstock space, Getty and Jupiter (separate or combined) can help control most of this threat. But this is not the threat that they should be addressing.

The stock photography market will be changing dramatically in the next few years - with or without the current market leaders. It's inevitable. The laws of economics require it. When I met with Getty CEO Jonathan Klein late last year he said that the biggest threat to their business was the 5D (figuratively) that I was holding in my hands when I asked him the question.

Preferred Platforms for Photographers
The content exists today to shift the balance of the $2 billion pie. While the top stock companies would create barriers between the established pros and everyone else, the truth of the matter is that the photography being produced at places like Flickr and Zooomr is in fact every bit as good as that being produced at Getty, Corbis and Jupiter.

Very shortly at Zooomr we will be launching a platform for all photographers to sell stock photography. We think that we have the right marketplace structured at this point. Central to our marketplace will be giving pricing control of imagery to photographers as well as changing the economics of the business to shift from the middleman broker model to moving the majority of the money made from a photograph sale to the content creator: The photographer.

Photographers everywhere will find this a far more attractive model than the current one today where they might get 20% to 50% payouts on images that are sold for $1 to $20.

Getty currently gets approximately $242 per royalty free image sold. Corbis gets about $214. More of this money belongs in the pockets of the growing army of photographers out there, producing some of the best imagery you've ever seen.

Welcome to the future.

Disclosure: I am CEO of Zooomr.

GYI vs. JUPM 1-yr chart