But I don’t think it got worse. I did mention, you know, on the media, entertainment and production side of things, that was worse in Q3 than what we projected and certainly what we saw in Q2. But in the corporate, we’re continuing to still see that kind of conservatism and continuing to see that kind of concentrated within certain submarkets a bit more. I am hopeful that, you know, we start to see that loosen up a bit. But at this point in time, we didn’t see anything really different from Q2 to Q3 in those areas.
Danny Pfeiffer: Thanks.
Craig Peters: You got it.
Operator: Our next question comes from Mark of The Benchmark Company. Please go ahead.
Mark Zgutowicz: Hi. Good evening, Craig and Jen. Craig, just curious what the – how the pipeline is developing for your Gen AI product. And if you could make that tangible in any way in terms of revenue in a rough timeline, that would certainly be helpful. Jen, just a question on revenue – year-over-year revenue impact from iStock, iStock subscription conversion to or from a la carte. I’m just trying to get a sense of how little that was in the quarter. And then out of that if you look at your last twelve months subscription retention, it declined about 400 bps quarter-over-quarter to roughly 95%. So I’m just curious what might be driving that. Is that premium access subscription revenue declining in absolute dollars or what might be driving that? Thanks.
Craig Peters: Yes. Okay, I’ll throw it at Jen on the iStock item. I’ll handle the revenue retention. I’ll just reiterate some of Jen’s remarks that are up front, which a lot of that is our push into smaller subscriptions, which do have a naturally lower rate of revenue retention. But we’ve also seen some of our media clients in the premium access side of things not move into overage on their deals. So typically our deals are not unlimited. They carry caps with them. And as the media industry continues to struggle, not only due to the strike, but also due to the macro ad landscape, you know, we’ve seen some pullback on those as Jen mentioned in her remarks. On the Gen AI side of things, I’m not going to be able to, Mark, give you any specifics at this time.
What I can tell you is what we said in the prepared remarks, which is we’re seeing really good engagement with the customers. We’re hearing really good feedback. I spent a good chunk of the quarter actually engaged with our customers. In fact, today Omnicom put out a press release of their own about how they were engaged with us in the early stages of the development process and moving in now into the commercial side of things. But it’s one that, you know, we are selling a service that is fully indemnified and legally clear. So it is one that goes through the hoops that you would expect in terms of the corporate contracting side of things, whether that’s legal or sourcing, et cetera, to make sure that these technologies are as clean and as advertised.
You know, so we’re still working through our pipelines, but the good news is those pipelines are growing. I still would set the expectation that we – you know, we don’t expect any material revenues in this calendar year and we’ll start to probably try to give you a better visibility of how that’s progressing in 2024. But I would still expect it to be a fairly limited amount of revenue to the company overall in 2024. Jen, do you want to take –
Jen Leyden: Yes, On the subscriptions piece, I think, Craig, you touched on the revenue retention, but more broadly, you know, that growth in annual subscribers is actually – is something we feel really good about. We mentioned in the prepared remarks it’s a fourth straight quarter where we’ve seen the year-on-year growth in that count being North of 50%. And at its face value that’s a great metric. But when you pull that apart, you know, at least 50% in the quarter of the new annual subscribers that we’ve taken on are new customers to Getty Images. We touched on the prepared remarks that these are customers who, you know, a good portion of them exist in some of the growth markets that we’ve very deliberately been trying to tap into.
And then we’re also seeing customers move into subscriptions in the core market. So you know, the mix of where we’re seeing that growth is really positive for us over the long term. You know, as Craig noted, we do see a step back in the revenue retention rate as a result of some of these subscribers being on those smaller e-commerce subscriptions. But when we look at you know, a broader metric which is just revenue per purchasing customer that remains fairly consistently north of $1,100. So you know, overall, it’s a good metric for us and you know, we’re excited to see where that continues to go.
Craig Peters: Yes. And I would just add to that, Jen, you know, Mark, I think one of the things that we haven’t talked about that we’re actually feel pretty good about in the business. We know that there’s a lot of impacts strike and currency and items, but you know, we’re seeing paid download growth within the business. We’re seeing customer counts and volumes hold up quite well. We’re seeing good solid renewals across the mix. And I think what we’re seeing when we look and watch what we’re seeing elsewhere in the marketplace of which you cover some of those, we’re not seeing the same levels of decline across our licensing business and our creative business is actually holding up quite well. As Jen mentioned, our revenues are down more in the editorial side of things for the reasons we referenced earlier.
But we are seeing really good durable kind of customer commitment into the business across creative. We’re seeing that across our e-commerce business holding up on a relative basis quite well. So those are some areas that we feel good about where I can point to, you know, some strength and hopefully, we’ll get to add back some things in the coming quarters as the markets normalize a bit.
Mark Zgutowicz: That’s all helpful. Maybe I could squeeze one last one in on the agency business. Just curious how that paced on a quarter-over-quarter basis in terms of revenue growth and are we starting to see that sort of baseline you know, concentration there has obviously come down? Just curious if we’ve kind of seen the trough there. Thanks.
