Getty images SERVER UP PROFIT AND YouTube GROWS EXPONENTIALLY MIS CASE STUDY Getty images SERVER UP PROFIT AND YouTube GROWS EXPONENTIALLY Lecturer Dr Thi Lip Sam Prepared by: Alfian bin Muhiddin ( 809417 ) Abd Sukur bin Salmo ( 809416 )

GETTY IMAGES Founded in 1995 with the goal of consolidating the fragmented photography market by acquiring many small companies, applying business discipline to the merge entity and developing modern information system. The advent of the web drove the company to e-commerce and in the process enable Getty to change the workflow and business practices of the profitable visual-content industry. Obtain it imagery (still, video and audio) from photographers and other artists under contract, and it owns the worlds largest private archive of imagery. Employs staff photographers to shoot the worlds news, sport and entertainment event. Getty Images both produce and a distributor of imagery and all of its product are sold via e-commerce on the web.

-The size of file including price (MYR) also given. Q. 1 Visit www.Gettyimages.com and select “Images/Creative/Search royalty-free”. Search for an image of a major city of interest to you. Select a photo and determine its default price. Follow the link on the photographers name to find other images by that photographer. -By visiting this web, After photo is select all the information including title of the picture, license type, photographer name, and release information is shown. -The size of file including price (MYR) also given. Example : 172 KB 280 X 210 px (3.89 x 2.92 in.)- 72 dpi –RGB MYR 60.00 File size on download 23KB

Q. 2 Explain how Getty Images business modal takes advantages of the opportunity created by IT Subscription : customer contract to use as many images as they want. Royalty -Free : Customer pay base on the file size of the image. Right Managed : user pay according to the right that they wish to use.

Q. 3 Evaluate the photography market using Porters five forces Q . 3 Evaluate the photography market using Porters five forces. Do you think Getty Images marginal cost is sustainable? Are its prices sustainable? What is the key to its continued success? The five forces: -The threat of the entry of new competitors -The threat of substitute products or services -The bargaining power of customers (buyers) -The bargaining power of suppliers -The intensity of competitive rivalry Because Getty Image licenses photo in digital format, its variable cost of production is essentially zero. Once the company has obtained a photo and placed it in the commerce server database, the cost of sending it to a costumer is zero.

Q. 4 What seems to be Getty Images competitive strategy? With a near zero cost of production, it is likely that Getty Images does indeed generated high level of free cash flow.

Q. 5 Explain how Getty Images use of information system contributed to the company value when it was acquired?  first company to license imagery online - and have continued to drive the industry forward with breakthrough licensing models, digital media management tools and a comprehensive offering of creative and editorial imagery, micro-stock, footage and music.

YouTube is a video-sharing website on which users can upload, share and view videos. The company is based in San Bruno, California, and uses Adobe Flash Video and HTML5 technology to display a wide variety of user-generated video content, including movie clips, TV clips, and music videos, as well as amateur content such as video blogging and short original videos. Most of the content on YouTube has been uploaded by individuals, although media corporations including CBS, BBC, Vevo, Hulu and other organizations offer some of their material via the site, as part of the YouTube partnership program.

Q. 6 How did the availability of near-free data communication and data storage facilitate YouTube success ? Would YouTube possible without them? Videos uploaded (data storage) to YouTube by standard account holders are limited to 15 minutes in duration. Partner accounts are permitted to upload longer videos, subject to acceptance by YouTube. Viewing YouTube videos on a personal computer requires the Adobe Flash Player plug-in (Free data comm.) to be installed on the browser. With zero in cost YouTube viewing can watching or upload their favourite video.

Q. 7 Even though the cost of data communication and data storage is very low, for the volume of which YouTube operate they are still substantial expenses. How did YouTube fund this expenses? YouTube was started as an angel-funded enterprise from a makeshift office in a garage. In November 2005, venture firm Sequoia Capital invested an initial $3.5 million; additionally Roelof Botha, partner of the firm and former CFO of PayPal, joined the YouTube board of directors. In April 2006, Sequoia and Artis Capital Management put an additional $8 million into the company, which had experienced huge popular growth within its first few months.

Q. 8 How does YouTube (now owned by Google) earn revenue? Advertising is YouTube's central mechanism for gaining revenue. YouTube is a business model that is based on combining the gift with the commodity. The first is free, the second yields profit. The novel aspect of this business strategy is that it combines what seems at first to be different, the gift and the commodity. YouTube would give free access to its users, the more users, the more profit it can potentially make because it can in principle increase advertisement rates and will gain further interest of advertisers. YouTube would sell its audience that it gains by free access to its advertising customers.

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