Analysis Of Getty Contract Outline

Posted on 2/1/2001 by Jim Pickerell | Printable Version | Comments (0)

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ANALYSIS OF GETTY CONTRACT OUTLINE


February 1, 2001

On the surface Getty's outline of a new contract looks like a substantial improvement

over existing contracts, but it may not be time just yet for photographers to run to

sign.

First, remember that last summer Corbis sent out a summary of their contract that

looked good. Once photographers got a chance to look at the actual language it

wasn't all that was expected.

It appears that Getty is trying to improve its relations with photographers. But, it

is still advisable for photographers to get together and jointly hire a good lawyer

to review the new contract before they sign anything.

Some of the features to consider:

  • Getty is offering a uniform contract across all brands. This is a major step

    in the right direction. However, each photographer is still going to be attached to

    a brand. Why is that necessary if the contracts are the same for all brands, and if

    photographer's submissions will now be edited based on the most appropriate brand?

    It doesn't seem to make sense.

    I asked Getty public relations this question and they said they didn't want to

    discuss issues like this until after the contract comes out.

  • North America is a single territory for all North American photographers. This

    is great for TIB photographers. It is even a slight improvement for Stone and VCG

    photographers because Canada and Mexico are thrown into the territory, not just the

    U.S.

    European photographers continue to get the shaft. If a photographer lives in the UK,

    France, Germany, etc. he gets 40% or 50% of the sale in his home country and 30%

    everywhere else. Chances are those home country sales are going to, at best, 15% of

    total sales for any European photographer. He gets only 30% of the sales everywhere

    else while the American get the higher percentage on probably better than 50% of all

    sales.

    I asked Getty public relations the following: "It seems to me that while the U.S.

    photographers get a pretty good deal, the losers are the photographers from other

    countries. They get 40% for sales in their country, but only 30% for sales in

    biggest market (North America), and all other countries but their own. It seems that

    there is a dis-incentive for them to participate. Do figures show that European

    photographers actually make more sales in their home country than in the U.S.? I

    doubt it, but I would be happy to publish such figures if you can provide them. Was

    making the European Union a "home country" considered? That way photographers in

    Germany, France and the UK would get 40% for any sales in the EU and it would put

    them on a more even keel with North American photographers."

    This was another question they didn't want to answer. Every European photographer

    ought to be sending a letter to Anthony Harris asking, "Why Not?" on this issue.

  • I did get a clear definition as to how they define the difference between

    digital and analog sales. A sale is digital or analog based solely on how the images

    is delivered. It makes absolutely no difference if the customer does the search on

    line and finds the image online. If the customer requests film then it is an analog

    sale.

    There is another little quirk to analog sales that I found interesting. If the

    customer requests that a file be written to a CD-ROM and shipped in some manner,

    rather than transmitting it on-line, that is also an analog sale. The distinction

    they use is if any "hard copy" is distributed it is analog.

    This raises several interesting points. Digital and e-commerce are two very

    different things. Photographers need to understand the

    distinction because they are being paid based on whether the sale is digital, not how

    the payment is made. While Getty won't give us figures, I believe that a very small

    percentage of Right Protected sales, even in the U.S., are automatically priced and

    paid for online. Most are negotiated, billed in the traditional manner, and the

    agency still has all the hassle of pursuing collection. The customers are using the

    online catalog for search, but all the rest of the transaction is still handled in

    the traditional way and that is likely to continue for sometime.

    Secondly, Getty pays the highest percentage for those sales where they have the most

    work, and they get to keep more money when they do less work (on a sale that is

    digitally delivered.) This makes no sense. It should be the other way around. If

    they do less work they should get less money. If they can afford to pay 50% for

    analog delivery, it would seem that they should be able to pay at least that much, if

    not more when they do a digital delivery.

    Of course, Getty is trying to set a precedent with the 40% because they hope that

    eventually there will be more sales where the files are digitally delivered. Then

    they will be positioned to get to keep more money. The major point, as I see it, is

    that there is very little logic for the pricing structure as it has been outlined.

  • The new environment has dictated a major change in the way the business is

    structured. That should extend itself fully to the matter of royalty rates. There

    is no magic to the old percentages when Getty is operating in a totally new system,

    and when they are no longer going to maintain analog files of non-scanned, or

    non-catalog images, as we have known them in the past. Now is the time to totally

    review the royalty structure. Some U.S. photographers are asking why Getty is only

    offering 40% when Corbis is offering 45%. The simple fact is that there may not be a

    valid justification for either of these percentages. Now would appear to be the time

    to fight that battle, rather than accepting their offer for two or four years with

    the hope that when it comes time to renew the contract Getty will be more

    magnanimous.

  • The new contracts will be image-exclusive. Sounds like a good thing, but watch

    the "similars" clause. Depending on how they define similars they can lock up

    everything you shoot.

  • There will be "capped catalog fees," but at what level. Will they be

    ridiculously high as some of the recent catalog charges have been? This also doesn't

    deal with the kind of images they are going to pick for the catalogs. They want the

    very edgy stuff to try to convince art directors that Getty has "the most creative"

    photographer, even if this kind of imagery is not what art directors tend to buy for

    their client projects. There are two separate and distinct steps to the buying

    process. One is to get the art director to look at your brand. The second is the

    specific product they buy. In our industry the producers only get paid when their

    specific product sells. It does the individual no good to pay extra to advertise and

    promote the products of someone else.

    Are the photographers who pay for the ad space getting a good return on sales, or are

    the images that are selling best the more solid "bread and butter" images that will

    never be accepted in a print catalog in the new environment? If Getty is going to

    produce "hearts and minds" catalogs rather that catalogs designed to sell specific

    images then the costs should either be paid totally by Getty, or shared equally,

    based on each individual's share of total sales. The way to make it equal is to

    adjust the percentage (but that may already have happened) so each photographer is

    contributing to advertising in proportion to the gross income the photographer

    receives rather than charging fees for images used in "hearts and minds" advertising.

  • There will be no deadline for signing this new contract --

    But. Getty has a new marketing strategy of special interest catalogs that they want

    to get moving. They have had images edited for some of these catalogs for over six

    months. They want to put them out, but only if they can do it at a different royalty

    rate. (This is probably one reason why there will be addendums to the contracts.)

    The photographer's whose images have been selected will be pressured to sign

    contracts quickly because Getty will not put images from any photographer into these

    products unless the photographer has signed the new contract.

  • Percentages again. The way the structure is described it seems to me that

    Getty is going to be paying TIB and European VCG photographers MORE than they have

    paid them in the past -- and maybe even FPG photographers. If true, that is a

    message I would think they would want to get across to photographers. So I asked the

    following question:

    "The way I read the proposal, I think there is a significant cost to Getty and

    corresponding improvement in the overall monies paid out to photographers. Many

    photographers (particularly FPG) are interpreting the proposal to mean that Getty is

    taking more money out of their pockets. Based on the sales for the various brands in

    4th Quarter 2000, what was the average percentage paid out to the photographers of

    each brand? Then using these same 4th Quarter numbers what would be the average

    increase (or decrease) in percentage of gross sales paid out to photographers if the

    new percentage arrangement were in effect? (Gross sales must be the gross paid by

    the customer when the sale is made through a wholly owned office and the amount

    received by Getty when the sale is made by a separate company acting as a

    sub-agent.)"

    They refused to answer this question. That makes me think there is something I'm

    missing.

  • Payment policies. Getty makes a big thing about faster payment and improved

    debt risk with the new contract, but many Stone photographers in the G40 group (a

    group of photographers who jointly hired a lawyer to help them negotiate the last

    Stone contract) claim that Getty isn't living up to the terms in the existing

    contracts. I haven't seen the specifics on this, but it is something to check out

    before rushing to sign any new deal.

    In summary, it seems to me that most photographers will need professional advice

    before signing this new contract. It is time to find a good attorney. Joint action

    is probably better than doing this individually because it reduces everyone's

    individual costs. The gArtists group has already made some major steps in this

    direction. This forum is private for photographers currently on contract with Stone,

    TIB, or VCG/FPG. You can learn more about joining this forum by sending a message

    to:

    gArtists-subscribe@yahoogroups.com


  • Copyright © 2001 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, e-mail: wvz@fpcubgbf.pbz

    Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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