Last week, photography and image licensing company Getty announced that since it is difficult and expensive to track, police and sue the millions of websites, bloggers and web users that routinely post, share and circulate their licensed products without paying for them, it is giving up. No more will it send out cease and desist letters and a bill to violaters.

Senior vice president at Getty Craig Peters told BusinessWeek that the digital photography industry is operating as the music industry did pre-iTunes and the only the way to stay relevant is to adjust with the times and figure out a way to let people continue to display images on blogs and social media feeds legally.

Although it hasn’t figured out how to do it yet, Peters thinks it will go the route of YouTube which embeds advertising around or as previews to videos, acknowledging very well that some of the content may be copyrighted or contain songs that weren’t pre-cleared to use. 

This could spell danger for other photography & digital images selling companies like Fame/Flynet, Bauer Griffin, Pacific Coast News, IMF, WireImages and others that could see a drop in demand for their photos from online magazines that can afford to pay $50 for a 2 week license per image. 

The paparazzi are already taking a beating from periodic scuffles with celebrities like the Kanye Wests of the world and from successful celebrity-led legislation and campaigns to limit their ability to photograph celebrity children.

Also, by now, these companies must be seeing decreased revenue as more and more of their clients use the thousands of images celebrities share of themselves on sites like Instagram, Facebook and Twitter which have terms of service which say the celebs release their rights to the images upon upload. 

For example, above are professionally taken photos from major photog sites of Kristin Cavallari, former MTV reality TV starlet of The Hills and Laguna Beach and current shoe designer and TV host.

Cavallari and her husband Chicago Bears quarterback Jay Cutler are expecting their second child after welcoming son, Camden Jack in August 2012.

Below are similar images of Cavallari taken after appearing on the SiriusXM show The Couch today to plug her new E! show The Formulist; at the Elton John Oscar watch party on March 2 this year and at a Vegas trade show last month plugging her line of shoes through a Chinese Laundry imprint. 

Before getting to each venue to walk the red carpet, she took a selfie or had her own photo taken that she uploaded onto social media. Granted the quality is different but free celebrity-provided photos and Getty’s Free embed photos option could really change the game.

So there you have it, folks!  It’s a different digital world indeed! 

What do you think?