Digital Railroad's Web site was displaying only an announcement about the shutdown.
Digital Railroad-powered Web sites were still functional mid-afternoon on October 28, but the main site had been replaced by a short announcement about the shutdown.
The four-year-old company provided an e-commerce platform for scores of photography Web sites, and offered supposedly secure backup of image archives.
Visitors to the Digital Railroad site were greeted with a message saying, “We deeply regret to inform you that Digital Railroad (DRR) has shut down.” A similar message posted on a page only visible to Digital Railroad members added, “The archive may only be accessible for the next 24 hours.”
Agencies and photographers who relied on the DRR service braced for their sites to go offline.
“This could not have happened at a worse time,” says Paul Fitzgerald, whose web site CandidatePhotos.com specializes in images of presidential candidates. Fitzgerald was planning to show off his site, which is powered by Digital Railroad, at the pictureHouse trade show in New York on October 29. Now he feared the site wouldn’t work.
“We’re 100 percent relying on them,” he says, adding, “It’s going to be a blow.”
Last year, Digital Railroad boasted 1,300 individual photographers and 65 agencies as clients. Among them are editorial agencies like the UPI Newspictures archive, Redux Stock, Noor and VII Photo. Not all of the clients rely on Digital Railroad exclusively, but some do.
Stephen Mayes, managing director of VII Photo, says the VII archive may go offline while the agency negotiates a deal with a new partner.
“None of the contingencies we have are going to be fast enough to cover that gap,” Mayes says. “So we’re going to have an annoying dark period.”
On October 15, Digital Railroad laid off several staff and announced that it was seeking new backers. CEO Charles Mauzy and other executives were laid off and a firm called Diablo Management Group, which specializes in restructuring and liquidating troubled companies, took over.
Digital Railroad competitor PhotoShelter tried to broker a deal to take over the company, according to someone familiar with the negotiations, but there was no deal. Instead, PhotoShelter offered a discount for Digital Railroad members and set up a way for customers to directly transfer their images to PhotoShelter.
Photographers spoke highly of Digital Railroad. Services included e-commerce tools for photo licensing, a stock service called Marketplace and a research network to help photographers learn what images were in demand from customers. Marketplace customers included editorial buyers like MSN, textbook publishers, and magazines. It was not unusual to see Digital Railroad credit lines in major publications.
“It’s just really sad. I thought they had a really good operation,” says photographer Danielle Richards of Teaneck, N.J., who uses Digital Railroad for her Jersey Girl Stock Images business. Richards says she still has outstanding payments for five images she licensed recently through the site, and wonders how she’s going to get paid.
Richards was working to transfer her archive over to PhotoShelter, but said the servers were running very slowly, likely because many other photographers were trying to do the same thing.
Landscape photographer and Digital Railroad member Jeff Deemie of Houston, Texas, says he wasn’t even aware the site was in trouble. “I’m surprised,” he says. “I thought they were doing well.”
What went wrong at Digital Railroad is still unclear. As a start-up, the site was backed by millions of dollars in venture capital. One ex-employee, speaking on condition of anonymity, speculated the company may have overspent on executive salaries and on recruiting new members. The employee was distressed by how the company abruptly shut down without helping clients complete in-progress licensing deals.
Digital Railroad launched in 2004 and opened Marketplace in 2007. It was in close competition with PhotoShelter, which launched in 2005 and opened a stock collection in 2007. PhotoShelter shut its stock collection down and laid off some staff in September. (The IPN stock service, which like PDN is owned by Nielsen Business Media, competed for some business with Digital Railroad.)
The announcement on the Digital Railroad site was directing all communication to a mailing address:
Digital Railroad, Inc
c/o Diablo Management Group
1452 N. Vasco Road, #301
Livermore, CA 94551
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