Getty Images Holdings, Inc. (NYSE: GETY) and Shutterstock (NYSE: SSTK) announced that Getty will be acquiring Shutterstock, subject to regulatory approval and closing conditions.
With both parties boasting a similar market value, the transaction is described as a “merger of equals.” This merger will produce a new entity, Getty Images Holdings, Inc. (NYSE: GETY) with an enterprise value of $3.7 billion and projected revenue of $1.99 billion.
The deal values Shutterstock at about $1.35 billion and offers existing shareholders cash or stock only, or a mix. Shutterstock’s stock closed at $30.05 per share on January 6, 2025. Shareholders who elect to receive cash will get a slight discount of $28.85 per share. Those who opt for stock will get 13.67 shares of Getty Images common stock for each share of Shutterstock common stock that they own. Finally, a mixed consideration of 9.17 shares plus $9.50 in cash is also on the table.
The current CEO, Craig Peters, and Chairman Mark Getty of Getty Images will continue in their roles at the new combined entity. Shutterstock CEO Paul Hennessey will be a member of the Board. Getty will then nominate five other Directors, while Shutterstock will nominate three. Thus, the combined company will have an 11‑member Board.
Peters said the proposed merger will “strengthen our financial foundation” and enable them to “invest in the future”. Hennessey echoed the same thought and said that the merger will “drive combined revenues”, improve cash flow and accelerate product innovation.
AI-induced consolidation of Getty and Shutterstock
Founded eight years apart, Getty (1995) and Shutterstock (2003) are reputed for their stock imagery. “As a designer in Africa, I’ve used both Getty and Shutterstock. My experience with them is that Shutterstock offers more breadth while Getty seems to niche down to a style of imagery,” says Condia’s Designer, Kenny Akinsola.
The combined entity will offer customers like Akinsola greater depth and breadth. “As a combined company, Getty Images and Shutterstock 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,” reads a statement shared by both companies.
Although both parties’ offerings have since included videos, a recent feature has been AI-generated images. In 2023, Shutterstock entered into a six-year contract with OpenAI. The partnership allows OpenAI to train its DALL-E models on Shutterstock’s audiovisual data while providing the latter with “priority access” to DALL-E’s capabilities. In that same year, Getty partnered with Nvidia to launch Generative AI by Getty Images.
Competing directly with the young AI-powered image-generating startups will be hard, due to the depth of their pockets. For instance, OpenAI raised more money in its last round ($6.6 billion) than the combined enterprise value of Getty and Shutterstock. And while “…the combined company is expected to create increased capacity for product investment and innovation for customers in a fast‑evolving and highly competitive environment, [emphasis ours],” it’s unclear what the stock photo companies’ stance will be toward partnerships with these AI companies.
It’s easier to make a case for the Nvidia partnership since it’s occurring at the infrastructure level. But the DALL-E product is a direct substitute for the AI-powered image generation investments that Getty and Shutterstock are making.
Often, when we talk about consolidation we think about startups. But in Getty and Shutterstock, we see two legacy companies, over 20 years old, merging and even then, the combined entity might not be strong enough to fend off the AI upstarts.
In what industries can we expect to see even more consolidation due to the influence of AI?
A spanner in the wheel
To close the deal, both companies have to receive approval from anti-trust regulators. Trump’s incoming presidency could give a go-ahead in the US, but other regulators might not.
In 2023, the UK’s Competition and Markets Authority (CMA) blocked a $20 billion takeover in an adjacent industry, design. The CMA said that it “finds Adobe’s deal to buy Figma would likely harm innovation for software used by the vast majority of UK digital designers.” Their non-approval of the M&A forced both parties to terminate their year-long agreement.
Although Getty and Shutterstock are traded in the US, a similar fate might befall them. This is because they have significant operations—like revenue and customer base—outside the US.
To close the deal, the intending companies will have to make concessions to address the antitrust concerns. Google had to make similar concessions to allay the EU’s competition concerns before completing its acquisition of Fitbit in 2020.
Already, Getty Images Holdings, Inc. (NYSE: GETY) owns many stock photo sites including iStock (2006 acquisition), and Unsplash (2021 acquisition).
So, one of such concessions might be for the Getty group to not lock out AI startups from feeding off their data. Blocking potential partnerships will starve young AI-powered image-generating startups of inputs to train their model. Thereby, creating less competition in image generation and by extension, stock photo space.
On one hand, we do not want our fate to be resigned into the hands of just the AI startups, but on the other hand, we don’t want to eat solely off Getty’s table.
It’s going to be an exciting ride from here on out.
Read the full official Getty, and Shutterstock merger announcement.
