NEW YORK, NY (October 28, 2008) - Digital Railroad didn't even give it's users the courtesy of 24 hours to get their photographs off their servers.
When users signed on this morning, waiting for them after the Digital Railroad log in today was this notice:
"To our valued Members:
We're sorry to inform you that Digital Railroad (DRR) has shut down.
On October 15th we reported that the company had reduced its staff and was aggressively pursuing additional financing and/or a strategic partner. Unfortunately, those efforts were unsuccessful. Therefore Digital Railroad has been forced to suspend all operations.
This archive may only be accessible for the next 24 hours.
Digital Railroad has attracted a loyal set of members. Thank you for allowing us to serve the photographic community these past few years.
All questions pertaining to claims should be addressed to:
Digital Railroad Inc.
c/o Diablo Management Group
1452 N. Vasco Road, #301
Livermore, CA 94551"
Then this afternoon, shortly after 5 p.m. EST, the Digital Railroad Web site went dead. Dark. Gone.
A simple HTML page residing on the domain name says it all with its title: Final Goodbye.
Left unanswered – since no one at Digital Railroad answered phones Monday on the lines that still worked (calls went straight to voicemail), and their phone numbers for sales and Marketplace and their main switchboard in the States triggered an automated phone company message saying that the numbers have been disabled – are the clients' basic questions: Will I get my money back? Will I be able to recover my photographic archive? Will I get any money owed to me from sales of my photographs that Digital Railroad hasn't paid yet?
Clients who have been tracking the company's downfall may have seen this coming, but for those who might not have known about Digital Railroad's financial straights found themselves scrambling to recover their photographic archives from Digital Raiload's servers.
"Everyone is downloading now and their FTP has slowed to a crawl," one Digital Railroad member told News Photographer magazine earlier this afternoon, before the site went dark. It's estimated that there may have been as many as 1,900 client archives on Digital Railroad's servers as of today.
With its board members, its CEO, and its president having resigned and with Digital Railroad being controlled by Diablo Management – a liquidation company – since mid-October, the company recently has been facing two options: filing for bankruptcy, or being bought at a bargain basement rate.
Calls to Digital Railroad's published phone numbers in the States this morning, including their Marketplace Image Sales number, were answered by phone company recordings that said the phone numbers have been disabled. A call to Digital Railroad's technical support line in New York this morning also went straight to voicemail.
In response to Digital Railroad's demise, PhotoShelter is making Digital Railroad's customers a special offer that expires on November 4. If photographers act now, before the deadline, PhotoShelter says they will give them three month's credit for their Digital Railroad account.
PhotoShelter is offering use of their migration tools for Digital Railroad customers to move their archives from Digital Railroad's servers to PhotoShelter to house their photographs in a new PhotoShelter Personal Archive 2.0 while getting credit for three free months. PhotoShelter says their offer includes helping photographers FTP from their Digital Railroad accounts to PhotoShelter with an "instant transfer."
Last week when it was reported that Digital Railroad was short on funds and that the company was facing drastic staff reductions and "greatly reduced spending," CEO Charles Mauzy and president Maris Berzins announced on their Facebook pages that they were no longer with Digital Railroad. The company's entire board of directors also resigned.
Digital Railroad founder and chairman of the board Evan Nisselson also announced on his Facebook page that he was no longer chairman, and that he hoped the company "lands in good hands."
Nisselson confirmed to News Photographer magazine today that he did indeed attempt "a couple of solutions to re-acquire Digital Railroad," but that "these financial times made it very difficult to do so." Digital Railroad's founder and former CEO has been based in Milan, Italy, recently.
He told News Photographer that after Diablo Management took over the board of directors and operations of the company on October 10, he tried to gather investors to acquire Digital Railroad. He says that he came close, but that it didn't happen for several reasons, including the challenging financial times in the global economy.
Nisselson said that after his efforts didn't materialize, Diablo didn't return his eMails or acknowledge his advice that Digital Railroad members needed, and deserved, sufficient advance notice if the company was going to turn off the servers. He says he was most concerned for the photographers who may have on assignment, or traveling without Internet access, who would be unable to download their archives in time.
In the end, Diablo only gave members a 24 hour notice to transfer their images – and then didn't even give them the full time period. The site went dark about 10 hours after posting the warning message to clients, a little after 5 p.m. EST on Monday.
This morning the National Press Photographers Association put out an eMail blast to its members that said that in the past NPPA had a partnership with Digital Railroad offering members a service discount, but that due to the current news about the company NPPA today recommends that members who are Digital Railroad customers personally back up all of their work stored at Digital Railroad, as well as consider taking advantage of PhotoShelter's offer.
Digital Railroad went through a restructuring in January that reduced the staff by 20 percent, about half of its employees at that time, after it received $15 million in new funding. At one point the company was spending as much as $800,000 a month, according to Photo Business News & Forum blogger John Harrington, author of the book "Best Business Practices for Photographers."
Harrington has published a step-by-step guide, with screen grab illustrations, on his Blog to instruct photographers how to best migrate their archives from Digital Railroad's servers into PhotoShelter.
Given the circumstances, the only real options left for Digital Railroad were to go dark and to file for bankruptcy or to be acquired by a former competitor. Since PhotoShelter just last month shut down it's online marketplace for stock photography sales after a one-year attempt to compete in that market, it's unlikely PhotoShelter would be interested in buying Digital Railroad with Marketplace and trying to do the same thing all over again. Unlikely, but not impossible; with Digital Railroad gone there's now less competition in that space. But a more likely role for PhotoShelter in the deal is to pick off Digital Railroad's customer base as the company spirals downward, which PhotoShelter's new offer to migrate archives off Digital Railroad and onto PhotoShelter's servers with three months of free use makes very clear.
Also unanswered is the question about what happens to photography Web sites that were powered by Digital Railroad's platform.
Rich Clarkson of Rich Clarkson and Associates LLC in Denver told News Photographer magazine tonight that one of their sites, NCAA Photos, had been hosted by Digital Railroad, but that "a couple of good employees at Digital Railroad kept us advised that this was coming, and we got all of our content off their servers and onto our new hosts."
Clarkson said the discs with NCAA Photos's Web site "went out FedEx today" to their new host's servers, and that while the Digital Railroad shut-down was significant Clarkson's company was never at risk, because they have backups of all of their photo archives at their offices in Denver.
According to Digital Railroad's public relations materials, current and former clients included the UPI Newspicture archive, Redux Stock, Noor, and VII Agency. Ed Field at UPI told News Photographer magazine that UPI will now be running their site from http://webview.upi.com.
As of this writing Redux, Noor, and VII sites are still live and all carry the tag, "Powered by DRR.NET."
