Getty Images and Shutterstock, two of the biggest names in stock imagery, announced on Tuesday their plans to merge in a $3.7 billion deal that aims to reshape the visual content landscape. The merger comes at a time when the traditional stock image industry faces mounting challenges from generative AI technologies, such as OpenAI's DALL-E and Midjourney, which can create high-quality visuals from simple text prompts.
The combined company will operate under the Getty Images name and continue trading on the New York Stock Exchange under the ticker symbol "GETY." Craig Peters, the CEO of Getty Images, will lead the new entity, which will see Getty's shareholders owning approximately 54.7% and Shutterstock's stockholders holding the remaining 45.3%.
"With the rapid rise in demand for compelling visual content across industries, there has never been a better time for our two businesses to come together," Peters said.
The stock market responded enthusiastically to the news, with Shutterstock shares surging over 30% in premarket trading and Getty Images climbing by more than 58%. Both companies had seen declining stock performance in recent years, partially due to the widespread availability of mobile cameras and increasing competition from AI-generated imagery. This merger aims to reverse that trend by enhancing content offerings, expanding event coverage, and delivering advanced technologies.
Under the terms of the deal, Shutterstock shareholders will have three compensation options: $28.80 per share in cash, 13.67 shares of Getty Images stock for each Shutterstock share, or a mixed option of 9.17 Getty shares plus $9.50 in cash per Shutterstock share. The merger is expected to generate between $150 million and $200 million in annual cost savings within three years of completion.
Paul Hennessy, CEO of Shutterstock, expressed optimism about the merger. "We are excited by the opportunities we see to expand our creative content library and enhance our product offering to meet diverse customer needs," he said. Hennessy will join the combined company's board, which will consist of 11 members, including six from Getty, four from Shutterstock, and Getty Chairman Mark Getty, who will retain his position.
The merger signals a strategic response to the growing influence of generative AI in the visual content industry. AI tools like DALL-E have rapidly gained traction, enabling users to create realistic images with minimal effort and disrupting traditional stock photography. By combining forces, Getty Images and Shutterstock aim to bolster their competitive edge, focusing on high-quality, curated content that can't easily be replicated by AI systems.
Antitrust scrutiny is expected given the significant market share the combined entity will hold. However, both companies argue that their complementary offerings and the highly competitive nature of the broader content creation market should alleviate regulatory concerns.
The stock image industry, which has long served advertising, media, and creative professionals, is at a crossroads as AI reshapes the way visuals are produced and consumed. The merger positions Getty and Shutterstock as a unified force capable of navigating this transformative era while maintaining relevance in a rapidly evolving market.
