The proposed merger between image providers Getty and Shutterstock, valued at $3.7 billion, may significantly reduce competition in the UK editorial image market, according to the Competition and Markets Authority (CMA). The CMA has raised concerns that this merger could impact the availability of crucial time-sensitive images and videos from major news events, celebrity appearances, and sporting activities.
The CMA’s interim report highlights the potential for a “substantial lessening of competition” specifically within the editorial segment. This includes images and footage that media outlets rely on to convey stories effectively. While the CMA does not anticipate negative effects on the global stock image supply, it emphasizes that the merger could lead to increased subscription costs for UK news organizations.
Market Dynamics and Regulatory Concerns
The competition authority noted that Getty is the “clear UK market leader” in editorial content. Customers regard Getty as a strong provider of archive, entertainment, news, and sports imagery. The merger with Shutterstock, which competes closely with Getty in entertainment images, would create a combined entity controlling “close to or above” half of the UK market. The CMA identifies high barriers to entry for new competitors, stating that it has not observed evidence of significant expansion from rival suppliers in the upcoming years.
Rival companies mentioned in the CMA’s analysis include PA Media Group, the Associated Press, and Reuters, along with entertainment-focused providers like Splash and Backgrid. Smaller players such as IMAGO and Storyful fill niche gaps but do not pose substantial competition.
The CMA is currently inviting public comments on its findings, with a deadline of March 12, 2024, as it prepares for a final ruling on the proposed merger.
Responses from Getty and Shutterstock
Margot Daly, chair of the independent panel overseeing the investigation, stated that editorial images are essential for bringing stories to life for UK audiences. She expressed concern that a loss of competition could adversely affect customers who depend on Getty and Shutterstock’s editorial offerings.
Getty’s CEO, Craig Peters, expressed his disagreement with the CMA’s editorial concerns. He emphasized that the analysis does not accurately reflect the competitive landscape of the UK market or the alternatives available to customers. Peters indicated that if the merger does not proceed, Getty may consider scaling back its operations in the UK, potentially leading to reduced investments.
“This transaction is about taking a Shutterstock business that is in decline in terms of its licensing revenues and being impacted by AI, combining it with Getty and creating scale,” Peters stated. He underscored the need for the merged company to adapt to the evolving market, especially with the rise of AI-generated images.
The CMA’s interim report suggests that both Getty and Shutterstock would continue to compete effectively without the merger, maintaining their current market dynamics. The investigation remains ongoing, and the outcome will determine the future of the merger and its implications for editorial image competition in the UK.
