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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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AMENDMENT NO. 2 TO
ANNUAL REPORT ON FORM 10-K/A

PURSUANT TO

SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

COMMISSION FILE NUMBER: 000-23747

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GETTY IMAGES, INC.

(Exact Name of Registrant as Specified in its Charter)

DELAWARE 98-0177556
(State or Jurisdiction of (I.R.S. Employer
Incorporation or Identification No.)
Organization)

2013 FOURTH AVENUE 101 BAYHAM STREET
FOURTH FLOOR LONDON, ENGLAND
SEATTLE, WASHINGTON NW1 0AG
98121
(206) 441-9355 (011 44 171)
544-3456

(Addresses, including zip code, and telephone number,
including area code, of principal executive offices)

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Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

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COMMON STOCK, PAR VALUE $0.01 PER SHARE

(Title of Class)

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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that registrant
was required to file such reports) and (2) has been subject to such filing
requirements of the past 90 days. Yes X No _

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. __

The aggregate market value of the voting stock held by non-affiliates of the
Registrant was approximately $280,558,817 as of August 14, 1998, based upon the
closing price of $19.25 per share of Getty Images common stock on the Nasdaq
National Market reported on such date. Shares of Common Stock held by each
executive officer and director and by each person who beneficially owns more
than 5% of the outstanding Common Stock have been excluded in that such persons
may under certain circumstances be deemed to be affiliates. This determination
of executive officer and affiliate status is not necessarily a conclusive
determination for other purposes.

As of August 14, 1998, the number of shares of Common Stock outstanding was
30,459,117.

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EXPLANATORY NOTE

This Form 10-K/A amends Item 1 of the Annual Report on Form 10-K for the
year ended December 31, 1997, filed by the Registrant on March 30, 1998, as
amended by Amendment No. 1 to Annual Report on Form 10-K/A, filed by the
Registrant on April 28, 1998. Item 1 of this Form 10-K/A replaces Item 1 as
previously filed in its entirety. All cross references to sections of the
previously filed Item 1 of the 1997 Annual Report on Form 10-K will be deemed to
refer to the applicable section of Item 1 included herein.

GETTY IMAGES, INC.
AMENDMENT NO. 1 TO
ANNUAL REPORT ON FORM 10-K/A
FOR THE YEAR ENDED DECEMBER 31, 1997

PAGE
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PART I
Item 1. Business........................................................................................ 3

PART I
ITEM 1: BUSINESS

OVERVIEW

Getty Images is a leading global visual content provider. Getty Images owns
and controls content across all major categories of the non-commissioned sector
of the visual content industry. As a result of its international network of
wholly owned offices, agents and distributors and its position as a leading
visual content provider on the Web, Getty Images is able to provide its
customers access to its images anywhere and at any time. Its visual content
collections include:

- ALLSPORT. Allsport is a leading global sports photography agency, with a
collection of more than 4 million images, most of which are owned by
Allsport, and which serves primarily the sports journalism market as well
as the sponsor and sports advertiser markets. New images are continually
produced by Allsport's photographers at major sporting events. Images are
digitized at a rate of approximately 15,000 images per month and are made
available to customers on a "live" basis via a proprietary on-line
subscription service and via the Internet.

- ENERGY FILM LIBRARY. Energy Film Library, one of the world's leading stock
footage companies, maintains a growing library of commercially desirable
cinematography covering a broad range of contemporary subject matter. This
footage is used in the advertising, television, feature film,
communications and new media markets. Energy Film Library has formed
strategic alliances to develop on-line and Internet services to provide
clients with stock footage in digital formats.

- LIAISON AGENCY. Liaison Agency is a leading North American news and
reportage agency, which makes available on a daily basis images and
features covering major news stories worldwide. It has a library of
several million photographs covering major events, personalities and
entertainment for the last 30 years.

- HULTON GETTY. Hulton Getty, one of the two largest privately owned
collections of archival photography in the world, consists of
approximately 300 separate collections totaling approximately 15 million
images, of which over 180,000 images have been digitized and made
available for search and review on the Hulton Getty Web site.

- PHOTODISC. PhotoDisc is a leader in the development and marketing of
digital stock photography products and in electronic commerce within the
visual content industry. PhotoDisc has a collection of approximately
75,000 feature-enhanced photographic images at a variety of resolutions,
developed specifically to support its digital delivery and royalty-free
licensing model. These images are available for customers for purchase on
the PhotoDisc Web site which is fully enabled for electronic commerce.

- TONY STONE IMAGES. Tony Stone Images is one of the world's leading
providers of contemporary stock photography. Its core collection of
approximately 60,000 images, is a tightly edited, relevant and manageable
collection, designed to meet the needs of all major customer segments,
including advertising and design clients, and to compete directly with
commissioned photography. This collection has been digitized for internal
search and review purposes and is planned to be available to customers for
purchase on a Web site which is fully enabled for electronic commerce in
the second half of 1998.

Getty Images markets and distributes its image and footage products through
a diverse and broad set of channels. Its international network of wholly owned
offices, including offices in London, Seattle, Amsterdam, Barcelona, Brussels,
Chicago, Copenhagen, Hamburg, Hong Kong, Los Angeles, Munich, New York, Paris,
Stockholm, Sydney, Tokyo, Toronto and Vienna, and agents and distributors in 53
countries, provide local, market specific support and services. Getty Images
also produces print and CD-ROM catalogs which are distributed widely to existing
and potential customers. The Company's on-line

sales and marketing, through systems such as PhotoDisc's Web site and Allsport's
proprietary subscription-based system, is key to support what the Company
believes is a growing number of customers who prefer to select and purchase
visual content products on-line. Expanding and broadening the reach of these
systems and developing similar systems for distribution of the Company's visual
content collections is a central strategic focus of the Company.

THE VISUAL CONTENT INDUSTRY

The visual content industry supplies images to a varied and growing customer
base, ranging from major multinational corporations to individual consumers.
Images are used to communicate messages in a wide variety of applications,
including print, electronic and broadcast advertising, direct mail and marketing
brochures, educational and training publications, books, magazines, newspapers,
corporate communications and annual reports, motion pictures, broadcasting,
CD-ROM products, sites on the Web, other on-line uses, sales and in-house
presentations and various consumer uses, such as prints, personal Web sites,
screen savers and electronic and print greeting cards.

Visual content can be broadly divided into commissioned imagery and
non-commissioned imagery. Commissioned images are commissioned from
photographers and cinematographers by particular clients for a single
predetermined application. Non-commissioned images, commonly referred to as
"stock", are provided by agencies that maintain libraries of selected images
which can be licensed multiple times for use by different clients for different
purposes. Getty Images is primarily active in the non-commissioned sector of the
visual content industry. Getty Images believes that the market share of
non-commissioned imagery has been increasing as the quality of images available
from non-commissioned agencies has become comparable to the quality of
commissioned images. Non-commissioned imagery offers the advantages of lower
cost, immediate availability and the ability to preview an image for
appropriateness prior to license.

Non-commissioned images are commercially available under two types of
license:

- Images can be licensed for specific uses ("rights-protected licensing").
These licenses can be tailored for each image and customer application and
often grant a degree of exclusivity of use to licensees, and impose
restrictions on the permissible number of copies that can be made, the
medium of reproduction or publication, uses by other parties and other
factors, including the geographic area, duration and purpose of use.

- Images can be licensed on a standard fee basis for multiple uses
("royalty-free licensing"). These licenses allow images to be used on a
non-exclusive basis for virtually any purpose, pursuant to non-negotiable,
"shrink-wrap" or "point-and-click" license agreements. Royalty-free
agencies typically deliver imagery via CD-ROM products and, in some cases,
the Internet. The royalty-free sector is one of the fastest growing
sectors in the visual content industry.

CONTENT CATEGORIES

The visual content industry consists of several different types of content.
The categories of content currently commercially available in the
non-commissioned sector of the industry are:

- CONTEMPORARY STOCK PHOTOGRAPHY images cover a wide variety of contemporary
subjects, including lifestyles, families, business, science, health and
beauty, sports, transportation, travel and the environment. The major
contemporary stock photography businesses that offer rights-protected
licensing are Tony Stone Images, The Image Bank and Visual Communications
Group. In addition to PhotoDisc, the major agencies providing the digital
distribution of predominantly royalty-free contemporary stock photography
are Digital Vision, Image Club, Adobe Systems and Digital Stock.

- ARCHIVAL PHOTOGRAPHY consists of collections of images and illustrations
covering well-known historic moments, people and places up to the present
day, as well as images reflecting the history of society,

entertainment, travel, industry and culture. Hulton Getty and the Bettman
Archive are the world's two largest privately owned collections of
archival photography.

- CONTEMPORARY STOCK AND ARCHIVAL FOOTAGE are the film equivalents of
contemporary stock photography and archival photography. These categories
currently form growing, but still relatively small parts of, the visual
content industry. Energy Film Library and The Image Bank are the two
leading contemporary stock footage providers on a worldwide basis.

- NEWS, CURRENT AFFAIRS, FEATURES AND CELEBRITY MATERIAL consists of
photographs or footage of specific events or the activities of well-known
people. Participants in this segment of the industry include wire services
and several general news and reportage agencies, including Gamma Liaison,
and content specialized photography agencies such as Allsport.

USERS AND USES

The visual content market supplies imagery to creative professionals in the
visual communications industry, including graphic designers, art directors and
art buyers at advertising agencies, marketing and communications professionals,
Web and new media designers, newspaper, magazine, book, music and video
publishers and broadcast and media production companies. In addition, new market
segments are emerging, including business users, who are not graphic designers
or other professional users of images, such as managerial and sales
professionals, SOHO users, and potentially the broader consumer market.

These customers use imagery in a variety of applications, including print,
electronic and broadcast advertising, direct mail and marketing brochures,
educational and training publications, books, magazines, newspapers, corporate
communications and annual reports, motion pictures, broadcasting, CD-ROM
products, Web sites, other on-line uses, sales and in-house presentations and
various consumer uses.

Getty Images believes that there have been significant increases in recent
years in the numbers of users and uses of images, partly as a result of a
greater appreciation of the value of images for conveying, symbolizing and
reinforcing marketing and editorial messages and partly as a result of a
proliferation in communication channels, particularly via the Internet and in
the cable and satellite broadcasting industry.

Getty Images expects that the footage sector will continue to grow as
technological developments in cable and satellite broadcasting and new media
industries lead to a major increase in demand for stock and archival footage.

TECHNOLOGY

Getty Images believes that the visual content industry is changing and that
certain sectors are experiencing significant growth as a result of several
factors, including: (i) increasing proliferation of image applications in
society and the increasing use of images to communicate and convey messages in
the publishing, broadcasting and electronic domains; (ii) expected continuing
shifts from the use of single-purpose commissioned images to library-sourced
images as the quality, certainty and cost benefits of non-commissioned images
become more widely recognized and appreciated by professional users of images;
and (iii) continued evolution in Internet usage and electronic commerce, as well
as the development and commercialization of new technologies in areas such as
digitization, facilitating use by professionals and non-professionals. Getty
Images believes that its strong expertise in Internet delivery and electronic
commerce positions the Company to capitalize on the future opportunities
resulting from these changes.

Getty Images believes that a number of technological advances have
contributed to the rapid development in the visual content industry and to
increased demand for digital delivery and flexible licensing models. These
advances include:

- ADVANCES IN COMPUTER HARDWARE. The development of faster and less
expensive desktop computers, high-quality color monitors and CD-ROM
drives, and related compression technologies have made it possible for
personal computer users to review and distribute high-quality color
images.

- SOFTWARE DEVELOPMENT. Developments in software applications and tools,
such as Adobe PhotoShop and PhotoDeluxe, as well as the popularity of
low-priced desktop publishing applications, such as Microsoft Publisher,
have enabled personal computer users to enhance, manipulate and edit color
images and combine them on a single page with text and other graphics.

- ADVANCES IN PRINTING TECHNOLOGIES. Advances in commercial four color
printing technologies have made professional printing more accessible and
cost effective for many professional applications. In addition, the recent
introduction of relatively inexpensive, higher resolution color printers
have made it possible for non-professionals and personal computer users to
print high-quality color images at low cost without professional
assistance.

- THE INTERNET. Significant increases in the use of the Internet, both as a
medium for communications and as a platform for commercial transactions,
have occurred. This increased use of the Internet has resulted in growth
in commercial promotion and advertising in Web sites and other on-line
communications, which, in turn, have contributed to an increase in demand
for and use of digital images for such promotion, advertising and
communications. In addition, the Internet provides a more efficient means
of marketing and distributing images for these uses than more traditional
methods.

COMPETITIVE STRENGTHS AND STRATEGY

Getty Images' principal objective is to become the leading international
provider of visual content by providing high quality, relevant imagery across
all categories of the visual content market to the broadest range of customers
in existing, emerging and new markets, in ways that most appropriately meet
their needs. The Company has identified the following competitive strengths in
its existing operations that it believes differentiate it from other visual
content providers:

- the breadth and depth of its branded high-quality content across all
content categories;

- its leading position in electronic commerce within the visual content
industry and experience in the application and development of visual
content technology;

- its multifaceted licensing and distribution models, which provide its
customers a comprehensive range of options to meet their creative needs;
and

- its extensive international distribution network and electronic
distribution capabilities.

Getty Images believes that these strengths will allow it to take advantage
of both the increasing demand for visual content and the opportunities arising
in the rapidly changing visual content industry.

In order to achieve its objectives, Getty Images pursues the following core
strategies:

- EMPHASIZE CONTENT QUALITY AND RELEVANCE. Getty Images believes that
content quality and relevance are critical for long-term success in the
visual content industry. Getty Images focuses on identifying its
customers' needs throughout the creation, selection and production
processes to create high quality branded imagery relevant to the needs of
its customers in each geographic region and market.

- LEVERAGE TECHNOLOGICAL EXPERTISE. Getty Images continues to leverage its
technological expertise to make its content collections available in
digital formats and accessible on-line, which it believes will meet the
growing demand in electronic commerce, while enhancing its customers' and
its own operational efficiencies. In addition, the Company seeks to
develop and integrate new products, services and delivery mechanisms.

- DEVELOP NEW MARKETS, PRODUCTS AND CUSTOMER TYPES. Getty Images believes
that the increasing use of imagery in communications and the emergence of
advanced technologies has resulted in opportunities to develop products
and services targeted at emerging, potentially larger segments of the
market and to further penetrate existing market segments. Getty Images
believes that its expertise and systems, its range of licensing models and
its use of Web-based delivery make it well positioned to take a leadership
role in developing the potentially broader corporate user, SOHO and
consumer markets.

- OFFER COMPREHENSIVE RANGE OF BRANDED CUSTOMER SOLUTIONS. Getty Images
offers its customers a comprehensive range of options to meet their
commercial and creative needs, from full-service to self-service access,
from rights-protected licensing to royalty-free licensing, and from
physical delivery of transparencies to electronic delivery of digital
images.

- PROMOTE AND IMPROVE BRAND IDENTITIES. Getty Images believes that Allsport,
Energy Film Library, Gamma Liaison, Hulton Getty, PhotoDisc and Tony Stone
Images represent pre-eminent brand names in their respective visual
content categories. Getty Images will continue to enhance the quality,
value and accessibility of its imagery to reinforce their international
brand identities and to create new brands in these and other visual
content categories.

- ENHANCE COMPREHENSIVE DISTRIBUTION NETWORK. Getty Images believes that it
has one of the most comprehensive distribution networks in the visual
content industry with the combination of its worldwide network of wholly
owned offices, agents and distributors and its on-line and Internet
distribution capabilities. In order to enlarge its available customer base
and further penetrate its existing customer base, Getty Images will
continue to strengthen its distribution capabilities by enhancing on-line
access to its visual content collections, by establishing wholly owned
offices in additional key territories and by developing agent and
distributor relationships in new markets.

- PURSUE STRATEGIC ACQUISITIONS. The visual content industry is fragmented
with a few international players, a number of regional players and a large
number of small businesses that specialize in a particular content type or
geographical area. Getty Images now owns content across all major
categories. However, it believes that the fragmented nature of the
industry continues to offer growth opportunities and it will target
companies that offer one or more of the following features: (i)
complementary visual content; (ii) a presence in a geographic market where
Getty Images is under-represented; and (iii) access to new technologies
and expertise.

CONTENT COLLECTIONS AND TARGET MARKETS

The Company's visual content collections include Allsport, Energy Film
Library, Gamma Liaison, Hulton Getty, PhotoDisc and Tony Stone Images.

ALLSPORT--SPORTS STOCK PHOTOGRAPHY

Allsport is a world leading sports photography agency, with a collection of
more than 4 million images, most of which are owned by Allsport, from sporting
events around the world dating from 1896. Its visual content is both specialist
and generalist, providing current images to the sports journalism market and the
broader market for stock photography used by advertisers and sports promoters.
Its main customers are the news media, sports brand manufacturers and sponsors,
sports governing bodies and committees, and commercial publishing and
merchandising businesses.

Allsport employs approximately 40 staff photographers and has contractual
relationships with 40 prominent sports photographers. New images are continually
produced by Allsport's photographers at major sporting events. Images are
digitized at a rate of approximately 15,000 images per month and are available
to customers on a "live" basis via a proprietary on-line subscription service
and via the Internet.

ENERGY FILM LIBRARY--CONTEMPORARY STOCK FOOTAGE

Energy Film Library is one of the leading international providers of stock
footage to the advertising, television, feature film, corporate communications
and new media markets. Energy Film Library's footage has been used in major
feature films such as "The Avengers", "Armageddon", "The Truman Story" and
"Mighty Joe Young", among others. Getty Images believes that the breadth and
magnitude of Energy Film Library's collection, together with the revenue
generated by the collection, have established Energy Film Library as a leader in
the stock footage segment.

Energy Film Library, which now includes the archives of the previously
acquired Fabulous Footage and the recently acquired ImageWays collection,
maintains and licenses a growing library of over 12,000 hours of commercially
desirable cinematography covering a broad range of contemporary and archival
subject matter. The collection of Energy Film Library, which is generally
licensed in short clips of 10 to 20 seconds, includes material covering
landscapes, cityscapes, wildlife, scenics, business, sports and lifestyle.

The Energy Film Library is known for the breadth of its imagery and the high
resolution of its content. It is catalogued on computer for quick access and
retrieval, and master elements are available in film, tape and digital formats.
Energy Film Library represents imagery from over 400 leading cinematographers
and film producers.

LIAISON AGENCY--NEWS AND REPORTAGE

Liaison Agency is a leading North American news and reportage agency, based
on its worldwide sales and the size of its images database. On a daily basis,
Liaison Agency sources stories worldwide and distributes images to magazines,
newspapers and book publishers, as well as advertising and design agencies and
other creative professionals. Liaison Agency's library contains several million
photographs covering the major events, personalities and entertainment of the
last 30 years. Liaison Agency receives and distributes material from
approximately 3,500 photographers worldwide. Since 1986, every image accepted by
the agency has been indexed using key words, creating one of the largest
databases in the industry.

Liaison Agency's news division, Gamma Liaison, currently has a relationship
with Gamma Presse Images, an independent Paris-based news and reportage agency,
for the foreign distribution and production of news and reportage imagery. Gamma
Liaison has the responsibility for the production of news and reportage imagery
in North America, South America, the Far East and the southern parts of Africa,
while Gamma Presse is responsible for production of photographs in Europe, the
Middle East and the central and northern parts of Africa. Sales are handled by
Gamma Liaison in the United States, by Gamma Presse Images in France and by
agents managed by Gamma Presse in other countries.

HULTON GETTY--ARCHIVAL PHOTOGRAPHY

Hulton Getty is one of the largest privately owned collections of archival
photography in the world, based on the number of photographs in its collection.
Its archive consists of approximately 300 separate collections totaling
approximately 15 million images, including vintage prints by renowned
photographers such as Man Ray, Bill Brandt, Julia Margaret Cameron, Brassai,
Kartesz and Matthew Brady, dating back to the beginning of photography. Hulton
Getty also incorporates the image collections of Ernst Haas and Slim Aarons. The
Hulton Getty collection includes images from all over the world and covers
significant

events, people and places from the nineteenth and twentieth centuries. Key
collections within the archive include:

- The Picture Post Collection (1938-1957): images of everyday life, social
conditions, sport, politics and entertainment by leading international
photojournalists from the Picture Post magazine, a U.K. magazine similar
in style and content to LIFE magazine or Paris Match.

- The Keystone Collection (1900-1986): incorporating the files of three
major London reportage agencies comprising Keystone Press, Fox Photos and
Central Press and an important U.S. archive, Three Lions.

- London Evening Standard & Daily Express (1940's-1989): extensive news and
feature libraries formed by one of the world's largest newspaper groups.

- London Stereoscopic Company (1854-1910): approximately 100,000 original
glass plate negatives, vintage prints and daybooks of 3-D views, celebrity
portraits, travel photography and illustrated books from one of the
world's first commercial photography firms.

- Henry Guttman Collection (1800's-1940s): specializing in modern and
historical European affairs, crime, early cinema and photography and
including old catalogs, books and book plates, prints and engravings.

Predominantly, the Hulton Getty collection is used by professional users,
mainly magazine, news and book publishers in the United Kingdom. Since the
acquisition of the Hulton Getty collection, there has been an on going process
of selecting, digitizing and indexing the most marketable images of the
collection to enhance the accessibility and appeal to a broader customer base.
Selected images are available for search and review through the Hulton Getty Web
site, which presently comprises over 180,000 images.

PHOTODISC AND TONY STONE IMAGES--CONTEMPORARY STOCK PHOTOGRAPHY

PHOTODISC. PhotoDisc is a leader in the development and marketing of
digital stock photography products and electronic delivery of images. The
PhotoDisc image collection, currently consisting of approximately 75,000
feature-enhanced photographic images digitized at a variety of resolutions, has
been developed specifically to support the royalty-free licensing model. The
images are available to the customer in several file sizes depending upon the
product and distribution method. All of the images are available for search,
selection and immediate download from PhotoDisc's Web site, 24 hours a day, 7
days a week, and more than 30,000 images are available on more than 160 CD-ROMs.

PhotoDisc also offers several value added product features. For example, the
Clipping Paths-Registered Trademark- feature makes it easier for the user to
drag and drop images into print and digital presentations. In addition,
PhotoDisc offers workflow oriented tools, such as Lightboxes, which enables
customers or multiple groups working on the same project in different locations
to view images simultaneously, make notes and add additional images to folders
for individual or group viewing or discussion.

TONY STONE IMAGES. Tony Stone Images is a world leading provider of
contemporary stock photography, based on revenues and the quality of its images,
and supplies images to a customer base of principally professional users, such
as advertising and design agencies and magazine, newspaper, book and news media
publishers. The Company believes that Tony Stone Images offers a compelling
alternative to commissioned work.

Tony Stone Images is dedicated to providing high-quality images relevant to
the needs of its customers by focusing on a relatively small number of images.
Its core collection, (the "Dupe Master Collection"), contains approximately
60,000 images, designed to meet the needs of all major customer segments. The
Dupe Master Collection is complemented by the mainstock collection, which
comprises more than one million images that have been selected for their subject
matter or demand in a particular market.

Tony Stone Images has creative teams in London, Los Angeles, Munich, Paris
and Seattle that analyze customer requests and buying behavior and perform
research in key markets in order to target and source images. Tony Stone Images'
approximately 700 active contributing photographers include highly respected,
internationally renowned professional photographers representing a variety of
styles, specialties and backgrounds. In addition, Tony Stone Images has
established in-house teams of skilled digital artists that retouch, enhance and
manipulate images to improve their commercial appeal and also design and create
images digitally, including composites of separate photographs, illustrations,
digital graphics and text.

MARKETING

Getty Images markets its images to a wide range of predominantly commercial
users through a diverse set of marketing channels. Getty Images' customers
include advertising and design companies, magazines, newspapers, broadcasters,
production companies and news media publishers, as well as corporate and SOHO
users for their marketing and communication needs. The Company addresses its
international markets by producing localized marketing materials where
appropriate.

PRINTED CATALOGS AND DIRECT MAIL. Getty Images uses catalogs to market its
contemporary stock photography collections and believes that its catalog quality
leads the industry and contributes to its reputation. To date, Tony Stone Images
has published 17 general catalogs covering a wide range of subjects and
concepts. Typically, general catalogs are published annually, with 19 language
variations corresponding to Tony Stone Images' most important geographic
markets. Tony Stone Images has published seven specialist catalogs--VISIONS OF
NATURE, BUSINESS & INDUSTRY, SPORTS & RECREATION, HULTON GETTY SEVEN AGES OF
MAN, INTERPRETATIONS, PORTRAITS and TWIST. The INTERPRETATIONS catalog, launched
in May 1997, represented a major innovation in catalog design, with a conceptual
theme assisting clients to use photo imagery in a more creative way.

PhotoDisc uses printed catalogs and its Resource Books to highlight its new
CD-ROM products and Web site offerings. General catalogs and various smaller
specialty catalogs are published periodically and mailed to customers and
prospective customers worldwide. Resource Books are published on a periodic
basis and serve as a reference guide for users of PhotoDisc's CD-ROM titles and
Web site by showing the images contained in the most recently released PhotoDisc
CD-ROM products and images available on its Web site.

In January 1998, Allsport launched its first printed catalog, CONCEPTS,
which is designed to market its specialist sports imagery to the creative
advertising and design community.

Each of Getty Images' operating companies uses direct mail advertising to
market its images. In particular, Gamma Liaison relies principally on quarterly
direct mailings to market its news and reportage photographs.

CD-ROM AND DEMONSTRATION REELS. PhotoDisc, Tony Stone Images and Hulton
Getty produce CD-ROM catalogs, which enable customers to select from a wide
range of images on-screen. PhotoDisc also permits its customers to use the
images featured in CD-ROM catalogs for comping or sample use. Energy Film
Library markets its stock footage through demonstration reels sent directly to
its customers and potential customers. These demonstration reels contain samples
of available footage.

ON-LINE MARKETING. A key element of the Company's strategy is the marketing
of its images through the use of Web sites and other online systems. The Company
may enter into strategic partnerships with leading digital media companies to
increase customer awareness and demand for the Company's products. Online
marketing is currently conducted primarily with respect to the PhotoDisc and
Allsport collections and the Company expects to increase its use of online
marketing with respect to all of its collections in the future. An important
aspect of the Company's online marketing strategy is the availability of simple
search tools to locate images via keyword or image number, and more complex
search tools that employ natural language, boolean logic or queries based on
visual image attributes such as color, composition, structure,

texture or some combination thereof. This combination of search tools is a
primary feature of the PhotoDisc Web site, which the Company expects to leverage
across the entirety of its online marketing efforts.

All of the approximately 75,000 images in the PhotoDisc Image Collection are
available for search and selection for a fixed price through PhotoDisc's award
winning (e.g., PC WEEK, 1997, Top 10 Sites for Electronic Commerce, and First
Place Award Online Marketing--The 1997 Software Summit Awards) Web site at
www.photodisc.com. Search results return thumbnail images that can be enlarged
for viewing purposes by users prior to purchase. Customers can also search for
different CD-ROM products, view their contents, and place orders on-line. In
addition, to enhance the search process, PhotoDisc offers a combination of
browsing, promotion and spotlight sections that merchandise new images, as well
as newly available CD-ROM products on the PhotoDisc Web site.

Allsport markets its images through its digital on-line collection
accessible via the Internet and other on-line systems, including its proprietary
subscription system. New images are digitized at a rate of approximately 15,000
images per month.

Energy Film Library has formed strategic alliances to develop on-line and
Internet services to assist in marketing its images and provide clients with
stock footage in digital formats. Some 180,000 images from the Hulton Getty
collection are currently available for on-line selection and new images are
continuing to be added. During 1998, the Company expects to make the Tony Stone
Images Dupe Master Collection available on the Web for search and selection by,
and delivery to, its customers.

SALES AND DISTRIBUTION

RIGHTS-PROTECTED LICENSING. All of the images of Tony Stone Images, Hulton
Getty, Allsport, Energy Film Library and Gamma Liaison are individually marketed
for specific customer applications. Licenses typically impose restrictions on
the permissible number of copies that can be made, the medium of reproduction or
publication, uses by other parties and other factors, including the geographic
area, duration and purpose of use. To ensure that their customers can realize
the full benefit of their negotiated licenses by allowing them to negotiate
exclusive rights, the Company uses a computerized rights-protection system that
monitors the licensing of images throughout the global network of wholly owned
offices and agents for such operating companies. The system also enables the
Company to maximize revenue per image by permitting multiple sales of the same
image, without allowing the same rights to be granted to different customers for
conflicting uses. A central database records image usage and its corresponding
sales value, information that can then be used in the targeting of popular
subjects and the creation of new images of the most salable subjects.

ROYALTY-FREE LICENSING. PhotoDisc's products are offered on a royalty-free
basis which allows customers to pay a one-time fee to use an image on a
non-exclusive basis for almost any purpose. As a pioneer in the royalty-free
segment, PhotoDisc has established itself as a leader in terms of customer
recognition.

SALES AND RESEARCH. The majority of the Company's wholly owned offices have
sales forces organized by customer and industry group. The sales force assists
customers in developing selection requests ("briefs"), which are then passed on
to a researcher responsible for putting together a selection of images that
respond to the brief. Image researchers use their knowledge of the image
collection, of either still or moving imagery, to respond efficiently and
creatively to the customer's brief.

Since April 1997, the Company's Hulton Getty sales outlets have utilized the
Hulton on-line collection to assist in the research and sales process, and to
allow customers to search for images. In 1997, the Tony Stone Images' United
Kingdom and North American sales outlets began using COMPASS, a proprietary
keyword-based search and retrieval system developed by the Company, to assist in
the internal sales and research process. The Company is now completing German
and French versions of COMPASS. The

Company believes that these systems will, along with access for customers via
the Internet, increase the efficiency of the Company's sales and research
operations in the future.

The majority of PhotoDisc's domestic licensing revenues are generated by
orders received through PhotoDisc's inbound call center. Customers can order
PhotoDisc CD-ROM products by reviewing PhotoDisc's collection appearing in
PhotoDisc's catalogs, PhotoDisc Resource Books or Starter Kits and on the
PhotoDisc Web site. PhotoDisc's customer service and technical support center is
based out of its Seattle headquarters and consists of a team of consultants with
broad knowledge of the PhotoDisc image collection, supported by the
comprehensive search system on the PhotoDisc Web site, as well as expertise in
digital image applications, design tools and photo manipulation methodologies.

DIRECT SALES FORCE. The Company employs a direct sales force that targets
leading advertising and publishing companies, and other high volume users of
images, such as communications companies. The direct sales force focuses on
reaching image purchasers who are generally responsible for large order
purchases. The Company maintains direct sales offices in its key markets in the
United States, the United Kingdom and Germany. The key accounts sales force also
includes technical support staff and trainers who assist with both pre- and
post-sales support.

DISTRIBUTION NETWORK. Getty Images markets images through an international
distribution network of wholly owned offices in 19 cities and agents and
distributors in over 50 countries. The Company's policy is to own offices in
major markets and to work closely with agents and distributors in these and
other markets. Management believes that control of its outlets results in more
focused marketing activities and better brand maintenance, which leads to higher
sales and market share.

Agents and distributors are selected on the basis of management expertise
and shared values for high quality and service. Many agents and distributors
have represented the Company for over five years. The Company provides agents
and distributors with products and marketing material and assists with marketing
initiatives and brand positioning. It initiates programs to develop the local
operations of selected agents and distributors, including library enhancement,
staff training and business development.

ELECTRONIC DISTRIBUTION. Enhancing its digital delivery capacity is a key
element of the Company's strategy. Digital delivery is currently offered
primarily with respect to the PhotoDisc and Allsport collections and the Company
expects that the application of PhotoDisc's digital know-how will allow the
Company to accelerate the transition of additional collections to digital
delivery.

The PhotoDisc Web site gives PhotoDisc's customers the flexibility to access
a variety of on-line services ranging from image and CD-ROM search and purchase
areas to image reviews, promotions, on-line community features and personalized
service areas. Customers can select, purchase and download images off the
PhotoDisc Web site on a real time basis. Approximately 5%, and 19% and 34% of
PhotoDisc's revenues in 1996 and 1997 and the second quarter of 1998,
respectively, were derived from licensing and downloading images directly from
the PhotoDisc Web site.

Allsport distributes images via its digital on-line archive accessible via
the Internet, an ISDN Point-to-Point Network which provides "live feed" contact
to subscribers, the PhotoStream satellite network that is maintained by the
Associated Press, and numerous other Internet and digital transmission methods.

Energy Film Library has formed strategic alliances to develop on-line and
Internet services to provide clients with stock footage in digital formats. Some
180,000 images from the Hulton Getty Collection are currently available for
on-line selection. During 1998, the Tony Stony Images Dupe Master Collection is
expected to be made available on the Web for search and selection by, and
digital delivery to, clients.

TECHNOLOGY

Getty Images utilizes technologies related to the digitization of images,
the enhancement and compression of digitized images, the organization and
management of Getty Images' database of digitized

images and customer profiles. The Company also utilizes technologies associated
with customer interaction with the various operating companies, on-line and Web
systems, including search functions, transaction-processing and downloading of
images. These technologies are now primarily used by PhotoDisc and Allsport, but
are anticipated to be used by the other operating companies as well, including
by Tony Stone Images by the end of 1998. Getty Images' on-line commerce systems
can manage a large number of concurrent customer searches, as well as the
process of accepting, authorizing and charging customer credit cards. Getty
Images uses a combination of its own proprietary technologies and commercially
available equipment and licensed technologies. Getty Images' current strategy is
to license commercially available technology whenever possible rather than seek
internally developed solutions. The Company has focused its internal development
efforts on creating and enhancing the specialized software and processes related
to the enhancement and delivery of digitized images.

Energy Film Library has strategic relationships with Quantel, Avid
Technology, and Sprint. In an ongoing relationship with Avid, Energy Film
Library has developed an Avid-ready digital film library that would allow
customers to preview via an on-line service or on CD-ROM, digital clips for
uploading directly into an Avid or other non-linear editing system.

INTELLECTUAL PROPERTY

The Company obtains most of the images distributed by Tony Stone Images,
PhotoDisc, Energy Film Library and Gamma-Liaison from independent photographers
and cinematographers on an exclusive basis. Professional photographers and
cinematographers strongly prefer to retain ownership of their work. As a result,
copyright to an image remains with the contributing photographer or
cinematographer in most cases, while the Company obtains the exclusive right to
market the image on behalf of the photographer or cinematographer for a period
of time (generally a minimum of five to seven years, which management believes
to be the useful life of contemporary images).

Due to the nature of the Hulton Getty collection (some images are owned and
some are in the public domain), commissions are not payable on a substantial
portion of the collection. Some of the other collections contain images produced
by photographers and cinematographers on a work for hire basis. Allsport, Energy
Film Library and PhotoDisc own the copyrights to or have permanent rights to
distribute approximately 85%, 25% and 10%, respectively, of their image or
cinematography collections.

COMPETITION

The market for visual content is characterized by strong competition. The
principal competitive factors are company reputation, the quality, relevance and
diversity of the images, the quality of contributing photographers and
cinematographers under contract to an agency, customer service, pricing, ease of
purchase and use, accessibility, distribution capability and speed of
fulfillment. Getty Images generally faces competition from (i) small libraries
serving local markets; (ii) specialist libraries focusing on particular subjects
such as transport, sports, architecture or natural history; (iii) medium-sized
general libraries operating primarily in their home market; and (iv) regional
agencies headquartered in a large market such as the United States, Germany, the
United Kingdom and France and which often have non-exclusive agents and
distributors in other markets. In addition, the Company's contemporary stock
businesses also face competition from commissioned imagery. Royalty-free stock
photography agencies, of which PhotoDisc is a leading example, have also emerged
as an alternative to rights-protected stock photography agencies for
applications where rights-protection and other services are not customer
requirements.

In addition to competitors and competitive factors applicable to the visual
content market as a whole, the individual Getty Images' collections are subject
to competitors and competitive factors specific to each such collection. The
Tony Stone Images collection competes principally with two international
competitors, The Image Bank, a wholly owned subsidiary of Eastman Kodak Company,
and Visual Communications

Group, a wholly owned subsidiary of United News and Media Group plc. The Hulton
Getty collection competes with specialized archival collections and regional
stock photography agencies with archival content in their collections, including
the Bettman Archive, owned by Corbis Corporation ("Corbis"), a company
controlled by Bill Gates, the Chairman of Microsoft Corporation, and other
privately owned and public domain collections. In the news and reportage
industry in the United States, Gamma Liaison competes with a number of agencies
that produce and distribute similar material. Energy Film Library competes with
The Image Bank, as well as with small specialized footage providers. PhotoDisc
competes with other royalty-free stock photography agencies, including Adobe
Systems Incorporated and its subsidiary, Image Club, Inc., Digital Vision, and
Digital Stock, a wholly owned subsidiary of Corbis. Allsport competes with
Reuters and Associated Press for news wire coverage and for magazine and
commercial sales competes with Duomo Photography Inc.

EMPLOYEES

At July 1, 1998, the Company had 1,266 employees. Of these, 690 were located
in North America, 425 in the United Kingdom, 137 in the rest of Europe and 14 in
the rest of the world. The Company believes that it has satisfactory relations
with its employees.

BUSINESS RISK FACTORS

Set out below is a description of certain factors that may affect the
Company's business and results of operations from time to time.

DEVELOPMENTAL NATURE OF THE VISUAL CONTENT INDUSTRY

The Company's future growth and profitability will depend in large measure
upon growth in demand for visual content. A visual content industry with
identifiable categories and growth characteristics is a relatively recent
development. The visual content industry is fragmented across all categories and
is experiencing significant structural and technological changes, including
substantial consolidation. To the extent that the visual content industry, or
any sector of that industry in which the Company operates, does not develop as
the Company anticipates, the value of the Company or its results of operations
or financial condition may be adversely affected.

RAPID TECHNOLOGICAL CHANGE

The success of Getty Images will depend, in part, upon its ability to adapt
to new technological developments in the visual content industry and to develop
new services and technology that address the increasingly sophisticated and
varied needs of its customers and prospective customers on a cost-effective and
timely basis. In response to technological changes, Getty Images has invested,
and will continue to invest, in new technologies to keep pace with new
developments, such as advances in producing digital images and in delivering
digital images on-line. Getty Images believes that market demand for images has
shifted and will continue to shift towards digital search, selection and
fulfillment of images, particularly in more developed markets. Getty Images will
rely on third parties for a substantial portion of the hardware, software and
software tools that it will use in its businesses, including, in particular, the
hardware, software and software tools that enable customers and potential
customers to access, search and license images through its Web sites. If
suppliers fail to upgrade or support such systems, the business, financial
condition or results of operations of Getty Images could be adversely affected.
There can be no assurance that Getty Images will successfully use new software
and other technologies effectively or adapt its third-party technology and
systems to customer requirements or emerging industry standards.

SIGNIFICANT COMPETITION

The visual content industry is characterized by strong competition. Getty
Images competes with a number of large and small visual content providers. Some
of the Company's competitors, including The Image Bank, Visual Communications,
Corbis and Adobe Systems, may have access to greater financial, marketing and
other resources than Getty Images. Getty Images also competes locally or with
respect to certain content or products with a number of general and specialized
content companies, many of which are well-established in their local or content
or product specific markets. Royalty-free stock photography agencies have also
emerged as an alternative to rights-protected stock photography businesses for
applications where rights-protection and other services are not customer
requirements. In addition, Getty Images competes indirectly with commissioned
work in contemporary stock photography and footage. New entrants into the visual
content industry could increase if technological advances make archiving,
searching and digital delivery systems more affordable, which could result in
lower average sales prices. There can be no assurance that Getty Images will be
able to compete successfully against current or future competitors or that
competitive pressures faced by Getty Images will not have a material adverse
effect on the business, financial condition or results of operations of Getty
Images.

POTENTIAL DIFFICULTIES IN INTEGRATING OPERATIONS AND IN MANAGING GROWTH AND
EXPANSION

Getty Images was formed by the integration of several companies that have
previously operated independently. See "Summary--Company Background". The
process of coordinating and integrating

these organizations will require substantial attention from management and could
cause the interruption of, or a loss of momentum in, the activities of any of
the companies' businesses, which could have a material adverse effect on their
combined operations, at least in the near term. The diversion of management
attention and any difficulties encountered in the integration of the businesses
could have a material adverse effect on the revenues and operating results of
Getty Images. Significant goodwill amortization charges, one-time transaction
costs and other related one-time reorganization charges will also adversely
affect the reported operating results of Getty Images and may result in reported
net income in future periods being negative.

In addition, each of Getty Communications, PhotoDisc and Allsport has grown
rapidly in recent years. The ability of Getty Images to compete effectively and
to manage future growth, if any, will require Getty Images to monitor and
upgrade as appropriate its financial and management controls, to reorient
management of recently acquired businesses to the operating philosophy of Getty
Images, to develop and expand management information systems and to recruit and
train personnel. If Getty Images is unable to manage such recent growth and any
future growth and expansion successfully, its financial condition and results of
operations could be adversely affected.

RISKS RELATED TO GOODWILL RECOGNITION

The recent acquisitions of PhotoDisc and Allsport generated approximately
$239 million of goodwill and $51 million of other intangibles that will result
in a substantial annual charge to be amortized against the earnings of the
Company in future periods. Management considers that a period of twenty years is
a reasonable period over which to amortize this goodwill and that the other
intangibles should be amortized over one to three years. Getty Images could be
required to write-down the unamortized value of such goodwill in the future at
an accelerated rate in the event that it suffers an impairment in value. Future
acquisitions by the Company, if any, could generate goodwill and other
intangibles that would result in similar charges to be amortized against the
Company's future earnings.

INFLUENCE OF PRINCIPAL STOCKHOLDERS

Two groups of stockholders own substantial percentages of the outstanding
shares of Common Stock and as a result are in a position to exert significant
influence in the election of the directors of Getty Images and other corporate
actions that require stockholder approval. Getty Investments L.L.C., a Delaware
limited liability company ("Getty Investments"), Mr. Mark Getty, Mr. Jonathan
Klein, Crediton Limited (a company of which the sole beneficiary is Mr. Klein)
and the October 1993 Trust (a trust established by Mr. Getty) (collectively, the
"Getty Group") beneficially owned approximately 30.5% of the outstanding shares
of Common Stock and PDI, L.L.C., Mr. Mark Torrance, Ms. Wade Torrance and
certain of their family members (collectively, the "Torrance Group")
beneficially owned approximately 17.5% of the outstanding shares of Common
Stock, in each case as of July 15, 1998. Pursuant to the Stockholders' Agreement
among the Company, the Getty Group and the Torrance Group, none of the members
of the Getty Group or the Torrance Group may transfer such stockholder's shares
of Common Stock except pursuant to the terms of such agreement. In addition to
ownership of Common Stock, certain members of each of the Getty Group and the
Torrance Group have management roles with Getty Images that increase their
influence over the Company and certain members of each group also have other
rights and relationships with the Company.

DEPENDENCE UPON KEY PERSONNEL

Getty Images believes that its performance depends, to a significant extent,
upon the services of its senior management and other key personnel, including,
in particular, Mr. Mark Getty, Co-Chairman of Getty Images, Mr. Mark Torrance,
Co-Chairman of Getty Images, and Mr. Jonathan Klein, Chief Executive Officer of
Getty Images. The loss of the services of any of Messrs. Getty, Torrance or
Klein could materially adversely affect the future prospects of the Company.
Each of Messrs. Getty, Torrance

and Klein recently entered into an Employment Agreement with Getty Images for a
minimum period of three years commencing as of February 9, 1998.

The future success of Getty Images will also depend upon its ability to
identify, attract, hire, train, retain and motivate highly skilled technical,
managerial, editorial, merchandising, marketing and customer service personnel.
Competition for such personnel is intense, and there can be no assurance that
Getty Images will be able to successfully attract, hire, assimilate or retain
sufficiently qualified personnel. The failure to retain and attract the
necessary technical, managerial, editorial, merchandising, marketing and
customer service personnel could have a material adverse effect on the business,
financial condition or results of operations of Getty Images.

RISKS RELATED TO ELECTRONIC IMAGE DELIVERY SYSTEMS

The Company's future growth in sales and profitability will depend in part
upon the increased acceptance and use of the Internet and other on-line services
as an effective medium of commerce. Rapid growth in the use of and interest in
the Internet, the Web and on-line services is a recent phenomenon, and there can
be no assurance that acceptance and use will continue to develop or that a
sufficiently broad base of users and prospective users of digital images will
adopt and continue to use such on-line services as a medium of commerce. In
addition, such on-line services may not be accepted as a viable commercial
marketplace for a number of reasons, including potentially inadequate
development of the necessary network infrastructure or delayed development of
enabling technologies and performance improvements.

A significant barrier to on-line commerce and communications is the secure
transmission of confidential information over public networks. Getty Images
relies on encryption and authentication technology licensed from third parties
to provide the security and authentication necessary to effect secure
transmission of confidential or proprietary information, such as customer credit
card numbers or digital images. There can be no assurance that advances in
computer capabilities or other events or developments will not result in a
compromise or breach of the algorithms used by Getty Images to protect customer
transaction data. Concerns over the security of the Internet and other on-line
transactions and the privacy of users may also inhibit the growth of the
Internet and other on-line services generally, and the Web in particular,
especially as a means of conducting commercial transactions. The success of the
on-line operations of Getty Images will also depend in part upon the efficient
and uninterrupted operation of its computer and communications hardware systems.
Such systems and operations are vulnerable to damage or interruption from fire,
flood, power loss, telecommunications failure, break-ins, earthquake and similar
events. While the Company has implemented disaster recovery plans, the Company
could suffer significant delays in implementing a backup system if a major
interruption were to occur. In addition, despite the implementation of network
security measures, the Company's servers are vulnerable to computer viruses,
physical or electronic break-ins and similar disruptions, which could lead to
interruptions, delays, loss of customer data or the inability to accept and
fulfill on-line customer orders.

IMPACT OF CHANGES IN FOREIGN EXCHANGE RATES

Getty Images publishes its consolidated financial statements in U.S. dollars
and conducts a portion of its business in currencies other than U.S. dollars,
particularly the pound sterling, German mark and French franc. As a result,
Getty Images is exposed to changes in the value of currencies against the U.S.
dollar. Fluctuations in the values of currencies against the U.S. dollar could
affect the translation of the results of non-U.S. based operations into U.S.
dollars for inclusion in the consolidated financial statements of Getty Images.

POTENTIAL LOSS OF RIGHTS TO GETTY TRADEMARKS

Getty Images (through its subsidiaries) owns trademarks and trademark
applications in respect of the names Getty Communications and Hulton Getty, and
derivatives thereof (including the name "Getty

Images") and the related logo (together, the "Getty Trademarks"). In the event
that Getty Images becomes controlled by a third party or parties not affiliated
with the Getty family, Getty Investments has the right to call for an assignment
to it, for a nominal sum, of all rights to the Getty Trademarks. Upon such
assignment, Getty Images will have 12 months in which it will be permitted to
continue to use the Getty Trademarks and thereafter will have to cease such use.
Although the primary brands used by Getty Images are Allsport, Energy Film
Library, Gamma Liaison, Hulton Getty, PhotoDisc and Tony Stone Images, Getty
Images is used as a corporate identity for certain of the Company's subsidiaries
and Hulton Getty is a Getty Trademark. There can be no assurance that the
exercise by Getty Investments of its right to cause an assignment of the Getty
Trademarks would not have a material adverse effect on the business, financial
condition or results of operations of Getty Images. Further, there can be no
assurance that the existence of the right of Getty Investments to cause such an
assignment would not have a negative impact on the amount of consideration that
a potential acquirer would be willing to pay to acquire the Common Stock.

RISKS RELATED TO GETTY IMAGES' ACQUISITION STRATEGY

Although Getty Images now owns visual content across all major categories,
the Company may in the future pursue the acquisition of complementary visual
content and other product lines, assets, distribution capabilities or
technologies that will complement or expand its business. Getty Images believes
that the recent increase in the level of demand for visual content and a trend
toward consolidation in the visual content industry, have increased the
valuations of visual content businesses and collections and are likely to have
an adverse impact on Getty Images' ability to make acquisitions and on its
ability to realize appropriate returns on such acquisitions. Acquisitions also
involve a number of other risks that could adversely affect the business,
financial condition or results of operations of Getty Images, including the
diversion of management's attention, the assimilation of the operations and
personnel of the acquired companies and the potential loss of key employees. No
assurance can be given that Getty Images will be able to identify any suitable
acquisition candidates or to make any acquisitions or that any acquisition by
Getty Images will not adversely affect the business, financial condition and
results of operations of Getty Images or that such acquisitions will enhance the
business of Getty Images.

RELIANCE ON OPERATIONS OF AND DIVIDENDS AND DISTRIBUTIONS FROM SUBSIDIARIES

The Company is a holding company without significant operations of its own
or significant assets other than ownership of the capital stock of its
subsidiaries, including PhotoDisc, Getty Communications and Allsport.
Accordingly, the Company's cash flow and the consequent ability to service debt,
are dependent on the earnings of its subsidiaries and the distribution of these
earnings to, or upon loans or other payments of funds by those subsidiaries to,
the Company. Several of the Company's subsidiaries have their principal
operations in a country other than the United States, the country in which the
Company is organized. Each such subsidiary receives its revenues in the local
currency of the country or jurisdiction in which its is situated. As a
consequence, the Company's ability to obtain dividends or other distributions is
subject to, among other things, restrictions on dividends under applicable local
laws and regulations, and foreign currency exchange regulations of the country
or jurisdiction in which such subsidiaries operate. The subsidiaries' ability to
pay dividends or make other distributions to the Company is also subject to
their having sufficient funds from their operations legally available for the
payment of such dividends or distributions that are not needed to fund their
operations, obligations or other business plans. Because the Company is a
stockholder of each of its subsidiaries, the Company's claims as such will
generally rank junior to all other creditors of and claims against the
subsidiaries. In the event of a subsidiary's liquidation, there may not be
assets sufficient for the Company to recoup its investments in such subsidiary.

POSSIBLE VOLATILITY OF STOCK PRICE; FUTURE SALES OF SUBSTANTIAL NUMBERS OF GETTY
IMAGES SHARES COULD HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF GETTY IMAGES
SHARES

There has been significant volatility in the market for American Depositary
Shares of Getty Communications ("Getty Communications ADSs") and for the Common
Stock.

Sales, or the possibility of sales, of substantial numbers of shares of
Common Stock in the public market could adversely affect prevailing market
prices of shares of Common Stock. Certain stockholders of Getty Images have the
right, pursuant to various registration rights agreements, to request that Getty
Images register certain shares of Common Stock for resale under the Securities
Act. In addition, employees of Getty Images hold a significant number of options
to purchase shares of Common Stock, many of which are presently exercisable.
Many employees may exercise their options and sell shares shortly after such
options become exercisable, particularly if they need to raise funds to pay for
the exercise of such options or to satisfy tax liabilities that they may incur
in connection with exercising their share options.

YEAR 2000

In common with users of computers around the world, Getty Images is
investigating if and to what extent the date change from 1999 to 2000 may effect
its networks and systems. The Company has recently undertaken a year 2000
assessment of its systems and is developing a program to implement any necessary
system upgrades. The major business system within Tony Stone Images is currently
being redeveloped and will be implemented prior to the year 2000. PhotoDisc has
also recently redeveloped its business system. There can be no assurance that
these programs will be successful. In addition, although the Company believes
that significant modifications will not be required on other systems, there can
be no assurance that such modifications will not be required or that the date
change from 1999 to 2000 will not have a material adverse effect on the
Company's business, operating results and financial condition. The Company's
operations may also be affected by the ability of third parties dealing with the
Company to also manage the effect of the year 2000 date change.

ANTI-TAKEOVER CONSIDERATIONS

The Board of Directors of the Company has the authority, without stockholder
approval, to issue up to 5,000,000 shares of preferred stock and to fix the
rights, preferences, privileges and restrictions of such shares without any
further vote or action by the stockholders of Getty Images. This authority,
together with certain provisions of the Amended and Restated Certificate of
Incorporation of Getty Images (the "Certificate of Incorporation"), may have the
effect of making it more difficult for a third party to acquire, or discouraging
a third party from attempting to acquire, control of the Company, even if
stockholders of the Company consider such change in control to be in their best
interests. In addition, the concentration of beneficial ownership of Common
Stock by the Getty Group and the Torrance Group and certain provisions of
Delaware law may have the effect of delaying, deterring or preventing a hostile
takeover of the Company.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

GETTY IMAGES, INC.

By: /s/ JONATHAN D. KLEIN
-----------------------------------------
Name: Jonathan D. Klein
TITLE: CHIEF EXECUTIVE OFFICER

August 19, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated and on August 19, 1998.

SIGNATURE TITLE (CAPACITY)
- ------------------------------ --------------------------

*
- ------------------------------ Co-Chairman and Director
Mark H. Getty

*
- ------------------------------ Co-Chairman and Director
Mark Torrance

/s/ JONATHAN D. KLEIN Chief Executive Officer
- ------------------------------ and Director (Principal
Jonathan D. Klein Executive Officer)

Treasurer (Principal
* Financial Officer and
- ------------------------------ Principal Accounting
Lawrence J. Gould Officer)

*
- ------------------------------ Director
Andrew Garb

*
- ------------------------------ Director
Anthony Stone

*
- ------------------------------ Director
James N. Bailey

*
- ------------------------------ Director
Manny Fernandez

*
- ------------------------------ Director
Christopher Sporborg

*By: /s/ JONATHAN D. KLEIN
------------------------- Attorney-in-Fact
Jonathan D. Klein