The news: Getty Images is acquiring Shutterstock in a $3.7 billion deal that combines two of the largest stock image providers, with Getty shareholders controlling 54.7% of the merged entity.

• The integration of the publicly traded companies will yield $150 million to $200 million in annual operational savings through combined efficiencies.
• The merged library will create an unprecedented collection of hundreds of millions of assets across images, video, and music formats.
• Current Getty CEO Craig Peters will lead the organization under the Getty Images name and “GETY” ticker symbol.

The merger requires approval from both companies' shareholders and regulators, though we expect the latter to be an easier hurdle under the incoming Trump administration.

Why it matters: The merger is a response to the AI-driven transformation of the visual content industry.

The companies are responding to significant industry pressures in several ways:

• Both have experienced substantial stock declines amid broader market challenges.
• Adobe and AI tools like Midjourney are disrupting traditional stock photo models with cheaper, customized image generation, despite current limitations in the technology.
• Thanks to genAI, video is becoming cheaper, which could cut into stock image budgets as well. Adobe recently launched its Firefly Video Model with limited generative AI capabilities in Premiere Pro, not to mention Luma AI's new Dream Machine platform.
• The combined entity will be better positioned to use its vast content library for AI model training.

Our take: This merger positions the combined company for survival and relevance in an AI-first visual content economy.

• The merged entity will be able to leverage complementary technological capabilities in search and AI development.
• The combined content libraries will create a powerful position in the growing market for AI training datasets.
• Operational efficiencies will enable increased investment in creative tools and event coverage solutions.

Long-term success will depend on several strategic factors:

• The company must successfully transform from an image licensor to an AI infrastructure provider. The rapid advancement of AI video and image generation tools and current and anticipated releases from OpenAI, Adobe, and Meta, underscores the urgency for traditional image providers to adapt their business models and technological capabilities.
• There’s evidence that traditional stock photos and videos have less of an impact on purchase decisions—13.7% in North America and 7.0% in the UK—compared to AI-generated content (25.5% and 10.0%), highlighting the importance for the merged company to modernize and diversify its offerings.
• At the same time, the integration of AI technologies will need to enhance rather than replace core offerings.