For someone looking to snag an image online, there are two major websites they probably check first: Getty Images and Shutterstock. But the two companies are competitors no longer, as Getty Images and Shutterstock announced on Jan. 7 that they were merging into a single enterprise in a $3.7 billion deal, pending regulatory approval.
Even more notable, though, might be the merger’s timing. Image licensing platforms like Getty and Shutterstock are facing significant competition from artificial intelligence photo generators. With the world’s rapid advancements around AI, both companies — and its new, combined iteration — seem to be altering their strategy to counter this push.
Why is the deal being made?
The combined company will “offer a content library with greater depth and breadth for the benefit of customers, expanded opportunities for its contributor community and a reinforced commitment to the adoption of inclusive and representative content,” Getty said in a press release. The company will continue to use the Getty Images name and branding.
The press release also outlined several advantages the new company feels it will have. Among these is a “greater investment in innovative content creation, expanded event coverage, and customer-facing technologies and capabilities such as search, 3D imagery and generative AI.” They are also hoping for savings of $150 to $200 million via expenditures in the first three years of the merger.
Together, the companies will create a massive photo-sharing brand. Getty “provides wire service photography and video to news outlets and businesses globally,” while Shutterstock “touts a stock image library of 450 million photos,” said The Hollywood Reporter.
What challenges will the new company face?
The impetus for the deal seems to be the rapid advancement of AI-generated imagery. This “latest development signals a strategic response to evolving market dynamics and technological challenges,” said Forbes. While Getty and Shutterstock both offer their own AI image generators, there has been a rapid “emergence of generative AI technologies” from other companies, allowing users to go elsewhere for images. Beyond this, the industry has “faced several disruptions in recent years, including Adobe’s acquisition of Fotolia” and the “rise of integrated platforms like Canva.”
But the main reason for the deal remains an ability to remain competitive in the AI market. The “rapid emergence of AI into the mainstream has ushered in a new era of visuals,” said The Wall Street Journal, one in which stock photo websites could end up taking a back seat. Photos “depicting unique renderings that once required high levels of effort are now done in an instant, opening the door to so-called deepfakes and concerns from creators about copyright protections.”
However, company officials seem optimistic that the merger will help them weather the AI storm. Neither Getty nor Shutterstock “had yet to see any effect from generative AI” and “certain goods, including its custom offerings, retain their own value,” said Getty CEO Craig Peters, who will run the combined company.
Peters and Getty are “betting that the combination will help them cut costs and grow their business by unlocking more revenue opportunities” even as AI “poses a threat to the industry,” said Reuters. Antitrust questions also remain about the merger, given its multi-billion dollar price tag. But while President-elect Donald Trump is infamous for going to war against regulations, some analysts say his “recent appointments to the Department of Justice Antitrust Division signal that there would be little change to the tough scrutiny that has come to define the regulator in recent years.”