A fortune for your thoughts

Stock video footage a $300 million market

Joyzelle Davis, Rocky Mountain News

Published June 26, 2006 at midnight

Text size

More Tech & Telecom

More stories »

Adam Wright was polishing off a commercial for a Georgia car dealership when he realized he lacked a crucial shot of shoppers scrutinizing a window sticker.

Wright could've interrupted everything to round up a camera crew, cast actors and find a location. Instead he hopped onto Thought Equity's Web site, downloaded a video clip of a car-shopping couple and filled the gap in under an hour.

It was one of several times the site has saved him from "having to turn on a dime in the studio," said Wright, president of Advertus Media, a Massachusetts-based advertising agency.

Denver-based Thought Equity is the world's largest stock video footage licensing and management company, with more than 165,000 clips on its Web site. The four- year-old company essentially serves as a middleman between ad agencies and media companies that want to incorporate stock footage into their own productions and the vast film libraries that own those rights.

"You can't watch an hour of TV these days without seeing our footage," said Kevin Schaff, Thought Equity's chief executive and founder.

Stock footage is estimated to be a $300 million market, according to BBC Worldwide, and is poised to grow to $1 billion by 2010 as more clips make their way into Internet ads, cell-phone snippets and digital billboards. Among Thought Equity's competitors are Getty Images and Bill Gates' Corbis, whose libraries are weighted more toward still photography than motion footage, and news organizations such as The Associated Press and the BBC.

As broadband Internet connections become faster and even more common, "all digital media is trending toward motion as opposed to still-based," said Craig Hanson, principal of Boulder-based venture capital firm Vista Ventures, one of Thought Equity's investors. "Motion content is much more captivating and compelling."

The bulk of stock footage buyers tend to be either cost-conscious producers who'd rather buy footage of, say, an exploding building for a couple thousand dollars - instead of spending millions to film it themselves - or producers who realized after filming wrapped they need a key shot. But the range of users isn't confined to advertising agencies. Thought Equity's stock footage lands in places such as Baby Einstein programs, corporate training videos and Power Point presentations.

Hilary Goetz, senior marketing specialist at Tut Systems, buys clips of uncompressed high-definition television files that her company uses at trade shows to demonstrate its encoding ability. Her Oregon-based company provides head-end systems for phone companies that send video over the Internet, and she likes to pick shots of water - which easily betrays encoding errors - to show off Tut's technology, she said.

"I'm probably the extreme of their clients," said -Goetz, who has requested 250 GB uncompressed files that are so big they have to be shipped on an external hard drive.

Thought Equity beefed up its library significantly this year, signing licensing deals with HBO, film studio Sony Pictures and the NCAA. Sometimes Thought Equity buys the footage outright, or, in other instances - such as with the NCAA - it has exclusive rights to represent the footage.

The company is adding several thousand clips each week, but part of the trick is the inexact science of adding the footage that clients want. Schaff recalled an instance in which he pointed to a clip of a dreary, concrete office building at a staff meeting, citing it as an example of video they shouldn't bother loading. A client snapped up the footage later that day.

"It's like trying to predict the weather," he said.

And like the weather, demand for certain shots has a seasonality. Footage of dollar bills lit on fire and soldiers in Iraq is in demand as political ads get under way, Schaff said. Video of silhouetted dancers took off after Apple's iPod ad campaign hit.

And footage of monkeys leapfrogging over each other remains a favorite regardless of the time of year.

Providing the video is only half the battle. Schaff is fond of saying that "accessibility drives demand" - meaning clients are more likely to shop for footage on an easily searchable site that lets them quickly preview shots. Last month, it signed an agreement with Google Video to provide another way to access its inventory.

This is the third company the 32-year-old Schaff, a Nebraska native, has founded. He started Internet infrastructure firm Wind River Communications while a sophomore at the University of Wyoming. He sold the company after graduation and used the proceeds to bankroll e-mail marketing and promotion software company Update Systems. He sold that for an undisclosed amount to Denver-based Webb Interactive Services.

Thought Equity's business plan has changed since it was founded in 2002. It started with the premise that small companies would want to buy print and TV ads produced for deep-pocketed clients, then recycle the ads with their own brand name. Two years later, Schaff scrapped the print side and decided to add stock footage after hearing complaints from producers about the time-consuming process of tracking down images.

Thought Equity now has 70 employees, split between its Denver headquarters adjacent to Coors Field and a digital refinery in Laramie. It recently opened offices in New York and Santa Monica, Calif., and plans to expand to Paris and Tokyo. The privately held company, whose investors include Vista Ventures, Jona Ventures and Access Venture Partners, doesn't disclose financial information other than to say its revenue grew by 500 percent in the first six months of the year.

Handling the complications that come with such a rapid growth spurt is probably Thought Equity's biggest challenge, said Frank Mendicino, managing director at investor Access Venture Partners. "Having so much content can turn out to be a bad thing if people can't find what they're looking for," he said.

Thought Equity's licensing agreements

Sony Pictures

HBO

NCAA

Warren Miller Entertainment

CLIENTS

• Advertising: Budweiser, BMW, Budget Rent A Car, Burger King

• Broadcast: The Oprah Winfrey Show, Tonight Show with Jay Leno, CSI: Miami, Alias, Law & Order

• Feature films: The Island (sweeping helicopter shots of the ocean), Glory Road (actual footage of the 1966 NCAA men's basketball championship game between Texas Western and Kentucky)

Subscribe to the Rocky Mountain News