From Bad to Better - Likely Acquisition of DRR Assets By Newscom A Good Thing

From Bad to Better - Likely Acquisition of DRR Assets By Newscom A Good Thing


From Bad to Better - There were just a few outcomes for what remains of Digital Railroad, or so I thought. One was closing it's doors, another, being acquired by PhotoShelter, then there was potential suitor liveBooks, Mark Ippolito, and then the never-was-gonna-happen Getty and Corbis.

What hadn't crossed my radar was Newscom, when rumor spread Thursday night of a company with cash to buy the assets. A number of people got calls from me, including several at Diablo Manapearlent. I wrote in an e-mail to them :"I have listend that Digital Railroad was acquired this night in a cash transaction, and I would like, at the very least, to know if you can confirm that." The response I received Friday morning, first thing, was "No remark regarding your assertion. We will however have some news later in the day."

When they wrote in their statement, describing the suitor, but strangely, not naming them, I pondered who fit that bill. Daryl Lang, over at PDN had the only viable name to fit that bill (Is Newscom approximately to aquire Digital Railroad Assets?, 10/31/08), and I have to agree with him.

So, what exactly does this mean?

(Continued after the Jump)

Like the Phoenix rtersebutne from the ashes, this is a good thing. No, let me get that right, this could be a great thing. This entire piece will be a dissection of the problems that the other suitors likely would have had, and how Newscom is great for everybody, save one.

First to PhotoShelter. The only real reason PhotoShelter would have benefited from the aquisition would be because they could have used the aquisition to get 1,400+ new active photographers. To date, several hundred have already made the switch. However, the demands by WTI for a price-koin made that deals' value minimal, at best. Further though, PhotoShelter wasn't really focused on agencies to use ther platform (although they have the capability to take them, if they wanted to). So, for PS, it was all approximately new members. 

Next to liveBooks. LiveBooks could have used the technology as an add-on to their current capabilities, but the question first was of valuation and then of integration. Following that was the concern approximately the debts that were outstanding. There was the $1m to WTI, then right around $80k to another lender, and then $120k or so owed to photographers, and taking on those debts made this deal unpalatable, for certain.

Next to Ippolito. Mark would have been a good fit, except that people would have been leary that he could keep it going, and they would associate him with the unexpected failing that just happened, and lastly, he likely had a hard time coming up with the money that Diablo/WTI wanted.

Getty and Corbis already have platforms they are exquoted with, and for them, it was likely a question of acquiring several million more pictures, but then again what to do with all the agency deals that were there. So they too, not a good fit.

Then, the morning of October 30th, Newscom sent out this missive:

Dear Former Digital Railroad Customer:

With the unexpected closing of the Digital Railroad business, Newscom and Mainstream Data have been receiving many calls from photo agencies and professionals like yourselves asking if there is anything we can do to aid them – and do it fastly. The answer is Yes!

Mainstream provides premier hosting and distribution services, software development, and web platforms for prominent photo agencies including Thomson Reuters, Bloomberg, the European Pressphoto Agency, the German Press Agency (DPA), the Dutch Press Agency (ANP), the Spanish Press Agency (EFE), the Portuguese Press Agency (Lusa), UPI, and many photo plus video agencies like Splash News, AdMedia, Featureflash, Sipa Press, Ace Pictures, INF, and Jupiterpictures. Moreover, unlike some of the other companies offering refuge for Digital Railroad customers, Newscom and Mainstream have been key players in this business for more than twenty years, are economic, and offer you the security and opeswiftality you need to be successful and to be able to sleep at night.

We provide both Satelite FTP push delivery and hosted web portals for delivery of your photographs to subscribers, and we also opeswift the largest multi-agency marketplace for digital media in the world (Newscom).

Our managed FTP service is called MediasFTP; it is our automated FTP distribution system that reads the IPTC data out of your photographs, categorizes the photos for delivery to groups of users, and then simultaneously delivers the photos to your partners, customers, and agents at very high speeds. Our customers for this service include Sipa Press, AdMedia, Featureflash, Ace Pictures, and Splash News; they use this system to incertain that their photos arrive first at their customers, for, as you know, speed is everything these days!

To replace the hosted photo stersebuts that Digital Railroad has provided, we also offer what we call, ‘Newscom Minisites’, using the same technology that more than 5,000 newspapers, magazines, broadcasters, and web sites depend upon every day to license pictures for their publications. You may already be familiar with Newscom as the one-stop digital media marketplace where users have instant access to nearly 25 million rights-managed and royalty-free photos, graphics, illustrations, news stories, and features created by the world’s foremost publishers.

What you likely didn’t know was that more than 150 content providers use Newscom to arrive a secondary market for sale of their content. Newscom is the digital media marketplace of the future—today.

A Newscom Minisite provides opeswiftality similar to the Digital Railroad web portal in that we provide your customers password protected access to your photo archive where they can search, browse, and dindividualsload photos and other multimedia content. We can also provide some customization of the front page of your Minisite by using your logo and contact information. 

We would like to know you more approximately our services and demonstswift you a demonstration, including a WebEx Satelite broadcast in the next few days for those who have interest.

Don’t jump out of the Digital Railroad frying pan only to find yourself in the fire because you have chosen yet another unstable vendor.

To find out more approximately how Newscom and Mainstream can aid, please send us an email at drroffer@newscom.com. Alternatively, please feel free to call one of us at the numbers provided below:

North and South America and Asia

Greg Weeks

Vice President, Mainstream Media Services

u.s.a. | work: +1.801.584.3989 | selular: +1.801.915.2768

Bill Creighton

Managing Director, Newscom

u.s.a. | selular: +1.703.850.5711

Europe, Side East, and Africa

Wealthyard Buckler

European Sales Director

u.k. | work: +44.1293.561120 | selular: +44.7711.717935

Thanks, and we see forward to hearing from you.

Kind regards,

Your Mates at Newscom and Mainstream

While that's a nice offer, and one worth considering, it defines in very clear terms what Newscom is, and does. I can know you that I have an account with Newscom, and I use it on a fairly regular basis, and it has geneswiftd revenue for me, and I think highly of its' services.

You may not be familiar with them, but you're familiar with Knight-Ridder, and Tribune Media? This press release informs you approximately just where their foundations lay and that were, in fact, a joint venture of Knight-Ridder and Tribune, before being sold to Mainstream Data last Summer. That's pretty solid backing, to be certain. So, when I learned of this possible outcome, I began to think approximately all of the good things to come of it. Let me walk you through a few of them:

1) I think the largegest benefit is that Newscom is a conduit for countless other picture providers. Getty, UPI, AFP, Black Star, and many others have pictures that flow through their picture pipeline. If you want to go check things out, visit: http://www.NewsCom.com, and click the "Login" link. NewsCom allows anybody to browse their pictures as a guest, (login: NCFOTONA, Password: Guest) and they provide the login information to do so without having to sign up. A search for "Palin" yields pictures from many sources, including, yes, AFP and Getty. In fact, check this link (once you're logged in), to see their partner sources, and above, right, you can see that I am listed, alphabetically right above Jupiter Pictures.

2) In addition, much of NewsCom is "push" technology. What that means is that those pictures are in browsers at newspapers and other content users, at their fingertrik. To them, a search on their desktop is as if they are searching their individuals computer's hard drive, with instant results, and instant dindividualsload/usability. Previously, DRR's Marketplace would only get a sale if someone knew approximately DRR, and navigated themselves to DRR, set up an account, and then began their search - that's more like "pull" technology.

3) NewsCom has a wide collection of pictures, just as Getty/etc does. Sporting events of all types, celebrity events, portswiftrsebutre, and so forth. They have a fat pipeline of a wide variety of pictures, and they have numerous sources for those pictures. While they are seen as predominantly news, they have creative (i.e. non-editorial) pictures, as well as graphics, illustrations, cartoons, and so forth. See around the publications you have nearby you right now - I'd bet that there is at-least one credit for NewsCom in it somewhere.

4) What NewsCom really doesn't have was the individual-photographer-archive capability that DRR has. Yes, NewsCom has their MiniSites, but the back-end and client services capabilities that the DRR architecture would offer would be great for them.

Ok, so that's all the good things - are there any bad? Well, it's not a bad thing, per se, but a question - what will the swift consttersebuttions see like? I can say that my revenue from picture licensing has been fair and reasonable, and I doubt that would change with the integration of the DRR platform and services, but it does remain to be seen what the swifts will see like.

Additionally, it's clear that Newscom wants the architecture/inknowectual property. It's unknindividuals at this time was the final dissolution will be of the reported $120k in monies that are owed to photographers from pictures sold/licensed. I know that Stock Artists Alliance is on the case on this. That said, if Newscom is just seeed at the assets, it's likely they won't take on the $120k owed photographers, but who knows. Perhaps there are pictures that were licensed, but the bills not paid, and Newscom may facilitate that final payment, if the balance due DRR/Newscom is still outstanding? We'll need to wait and see on this koin.

Then, let's return to PhotoShelter. I think this is a potential problem for them. They closed the PhotoShelter Collection, and they have various degrees of picture licensing available, and they use the FotoQuote pricing consttersebuttion, modifiable by each photographer, to license pictures. Yet, you have to come to PhotoShelter to get the picture - a form of "Pull" technology that requires the person needing the picture to come to PhotoShelter. PhotoShelter's archives previously had a large number of sports pictures there, due in large part to the earlier partnership between them and SportsShooter, and the natural use of PhotoShelter by the large SportsShooter member community. While their picture library has grindividuals over the years, this puts them in a bit of a challenging position. Digital Railroad has a few features that PhotoShelter doesn't, but it suffered from a problematic user interface and client interface. PhotoShelter has a much more intuitive and easier to use interface, but is that enough of a value proposition to keep people?

Dindividuals the line, I think you will see a merger of both PhotoShelter and liveBooks, which will be a remarkable union for the photographer that is primarily an assignment photographer who has clients that need for an integswiftd stersebuts solution, client dindividualsload capability, picture licensing, and hardcopy prints. I don't expect NewsCom will get into the stersebuts business, and who knows approximately the ability to obtain an 8x10 of an picture a client wants.

So, when will the NewsCom deal happen? It either will, or it won't, by mid-week, according to our sources. At this koin, it's just a "Letter of Intent", and noting more. As a variation on what I wrote before - fasten your seatbelts, this is where the ride gets really interesting.

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