Bill Gates Pictures Corbis' Future

Bill Gates' Corbis is the feisty No. 2 in the $2 billion market for managing photos, video, and other imagery for the advertising, marketing, and publishing industries. Rival Getty Images (GYI) is much bigger, but Corbis has been growing fast through acquisitions and by adding new services (see BW Online, 3/15/06, "Content Is King at Corbis"). Gates, also chairman and chief software architect of Microsoft (MSFT), believes Corbis is well positioned to benefit from the explosion in the use of digital media.

Gates and Corbis Chief Executive Steve Davis were in New York City on Mar. 14 for the company's annual marketing meeting. They sat down with BusinessWeek Senior Writer Steve Hamm for an interview. Gates and Davis discuss Corbis' newer services, such as royalty-free images, and how the outfit handles the thorny issue of protecting copyrights in an age when content can be shared quickly and easily. Edited excerpts follow:

The convergence of technology, entertainment, and media industries -- together with a host of new devices -- has created a tremendous opportunity for the makers and distributors of digital content. What's the big play for Corbis in the convergence?

Gates: Corbis has a special role with imagery and video to have a library that covers the world, both the history and the subject matter, and has it available in several different rights models. When you're trying to do a marketing campaign, Corbis is there to help out. Also, we're there with the rights clearance, some of the services around it, and also some of the software that makes it easy to find out exactly what you want. It's really speaking to the breadth of things people want to do and the processes now being very digital.

Many of the companies that were bought to create Corbis came from an industry where people were digging around in photo drawers to find things. Now it's very much an online activity. You can navigate through the pictures according to exactly the characteristics you want. Are a lot of the materials now multipurposed for different media?

Gates: After the photographer goes out and takes the shots, they put it in the Corbis archive and they don't know exactly what it will be used for. We're particularly strong in editorial. We're a growing presence in the commercial side. You'll see a photograph of Winston Churchill being used for an ad campaign. We're strong with a lot of well-known stars, both in getting the imagery and making sure the rights management is done in the right way.

Davis: I'd add that one of the models Corbis has used is to take material that has traditionally sold into one environment, say advertising or magazines, and make it available in others. The cross-selling has been a source of a lot of growth. It's a good model for cross-purposing.

The explosion of digital photography, combined with the Internet, makes it possible for millions of people to share photos and videos via Web sites like Flickr and BitTorrent. Is there a role for Corbis in this citizen-creator phenomenon?

Gates: Most of what we get is done by professional photographers. We do have partners who are in the spot-news business, who create the stuff people need right away. We're good at archiving and organizing it, so we take that material and make it available. You could have some amateur work come in through the spot-news channel. It will be like it is with e-zines and bloggers. In photography, you'll have the whole array of stuff that's just up there free, and then increasing levels of quality. The whole spectrum is being figured out. We're at the highest-quality end of the spectrum.

With the Internet, you have this huge distribution pipe, and the possibilities for piracy and misuse are unlimited. How do you deal with that?

Gates: Our customers want to license the photos in the right way. They want to make payments and do the whole rights-clearance process. Secondly, there's quite a bit of technology involving watermarking that we use to try to find the photos and where they might be used on the Internet. There's some casual use that might involve not paying the right fee, but even there, if it's in digital form, the ability to enumerate it should make it possible for the rights of the creator to be largely adhered to.

Davis: One of the attractions of a service like Corbis is that both photographers and artists, as well as clients, rely on us to manage the rights well. We track down unauthorized use. Clients also want to seek indemnities to make sure the rights they're using are secure. This is central to everything we do.

I understand that one of the more promising initiatives at Corbis is so-called royalty-free images -- where a client pays up front to use an image as many times as he wants. Why is that a big deal?

Gates: There are a lot of uses, say corporate brochures, where the idea that you're the only one using the image is not that critical to you. Having a whole range of images you can choose from with a flexible pricing model is quite attractive. So that's a significant part of what Corbis and others are putting out. It's simple to buy, and yet you're getting extremely good work.

Davis: The driving force behind Corbis' growth and industry growth in that area is it's really about ease of use. It's the most e-commerce-enabled part of our collection. You simply buy it, download, and you don't have any further back-and-forth. As people get more accustomed to transactions on the Internet, these royalty-free models are very attractive.

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