Getty Images is expanding its focus from images to other forms of licensed content, today adding Music. The Seattle photo agency announced it was acquiring Pump Audio, a specialist licensing agency for independent musicians, for $42m.
Pump Audio was founded in 2001 as a form of agent for independent musicians. The New York based company allows musicians to upload tracks which are then made searchable for potential licensing. If an Ad Exec, for example, is looking for a soundtrack to run behind a new Television commercial, the Pump platform, allows the Ad Exec to find and work with Independent musicians who otherwise may not have been on their radar. Pump maintains a catalog of more than 100,000 songs many of which might have been recorded explicitly for advertising. Pump licenses all the music in its archive for a flat fee. Last year, Pump reported approximately 80,000 placements. The company’s commercial clients includes networks like MTV and NBC and brands like Nike and Mercedes-Benz. Revenue, which reports estimate to have been at about $10m for 2006, is small but growing.
Getty’s CEO Jonathon Klein says "the market for commercial music licensing is fragmented, inefficient and confusing, just as the imagery market once was." Further, "when [Getty] entered the photo industry, it was very similar to the music industry… It was tedious to get hold of a photo; it took a long time; choice was limited." It is his belief that Getty’s distribution network and e-commerce capabilities, mixed with a large network of customer in advertising, will allow it to bring improvements to the market.
The move by Getty is not its first foray outside of still imaging nor its first foray into growth via acquisition. Getty has been busy buying up companies and has also actively pursued expansion into video stock footage (which accounts for about 5% of total revenue). Adding music may be a natural extension. With more than 650 global sales representatives, and a strong network with agencies, Getty is well positioned to make itself a one stop shop for multi-media commercial licensing.
Additionally, as the photo licensing market matures, and lower cost Microstock services gain more marketshare, diversification into new complimentary markets is a shrewd move on the part of Getty to insure revenue growth continues.(Getty fiscal year revenues were up 10%. The company currently draws about 40% of revenue from licensing high-end imagery. More info on Microstock Agencies can be found here.)