152 ARE PRODUCTION SHOOTS IN YOUR FUTURE?
July 1, 1998
In spite of the oversupply of images in the market, I believe some major agencies
will begin hiring staff photographers, or give contracts that provide a level of
guaranteed return to a few selected freelancers.
The contract deals will probably be for a day rate and expenses on specific
projects or for a fixed number of days per year. They will either be for an
all-rights buyout, or a very minimal percentage of future sales. The shoots will
be highly structured, art directed by agency staffers, and on subjects that agency
sales records show are in greatest demand.
For most photographers this will be a dramatic shift in the way stock images have
been produced and acquired in the past. But, everyone needs to take a deep breath
and consider why this may happen -- and how they, individually, should react to
this new working environment.
One of the things that makes me think the industry will head in this direction is
the success PhotoDisc and Digital Stock have had hiring photographers to do
production shoots. The implications of this success will not be lost on the
traditional stock agencies in the "rights protected" business.
Corbis has also paid for production shoots, but their efforts to date have not
produced the desired return-on-investment. Corbis is currently re-thinking its
strategy for production shoots. Corbis' mistake was in the subjects they chose to
cover. In today's market, no matter how much you spend producing great images on
social, political and anthropological issues there simply aren't enough buyers for
this subject matter to offset the expense of production. (With this in mind, it is
interesting to observe the happenings at Sygma. See Story 147.)
On the other hand, now that Corbis owns WestLight and Digital Stock, they have
Craig Aurness and Rick Becker-Leckrone who understand how to plan productions that
will yield profits. If these two are turned loose, Corbis should earn a much
better return on future production shoots.
Also make note of Comstock. Their staff photographers have been producing a major
part of their collection for years - and very successfully.
Stock Photo Suppliers
There are at least four major groups of stock photo suppliers that will be affected
by such a change in acquisition strategy. They are:
- Major Stock Agencies (MSA) that have access to capital,
- Small Stock Agencies (SSA) that are strapped for capital and have no
alternative but to get their images from shooters who produce on speculation.
- Major Production Photographers (MP) These photographers make a significant
portion of their income from stock and are usually represented on an exclusive
basis by one of the major agencies that distributes print catalogs worldwide.
- Other Photographers (OP) This group includes all other photographers. Some
may be earning in excess of $100,000 a year from the combined sales of several
different agencies. Some may be represented by one of the major agencies, but not
earning a significant amount of money from that agency, and not in the small, elite
group of top producers for that agency. Some may do work in an area of narrow
special interest where the demand for this type of work is not great enough for the
photographer to support him or herself on stock income alone. Some may have earned
a significant portion of their income from stock in the past, but now as a result
of increased competition see that income going down, and are finding it
increasingly difficult to get images in the agency's print, cd-rom or on-line
I want to examine how each of these groups is likely to react to increased
production of wholly owned stock. Keep in mind that most photographers are in the
Forces Driving Major Agencies Toward Wholly Owned Production
- The chief interest of the large agencies owned by corporate conglomerates
is bottom line profits for their stockholders.
- One way to increase profits is to cut costs.
- Costs can be cut by limiting the number of images accepted into the system,
particularly when acceptance means expensive scanning and keywording to make that
image available for marketing.
- Royalties are a major cost, and they can be reduced by wholly owning the best
- The large agencies have detailed statistics on past demand and are convinced
that their statistics give them a major advantage in selecting, and directing
production of the kind of images that will be in high demand in the
How It Will Play Out
MSA - Agencies seem to be having trouble getting the images they want, when
they want them. For maximum profits they constantly need new, updated looks of all
their best selling subjects. They need better control of the flow of this new
Some agencies say submissions from their major photographers have fallen off. Some
believe these photographers are "punishing" them by cutting back on production.
These agents argue that over the years they have made a lot of money for these
major stock producers, and now the photographers have unrealistic expectations.
But, at the same time these top agencies are cutting back on the number of images
they will accept from previous top producers for their new catalogs. They are
raising the quality bar and getting much more picky in their selection. The
agencies are also taking on more photographers and, consequently, accepting fewer
and fewer images from each photographer. They are only promoting and marketing the
creme de la creme in their catalogs.
Yet, according to my calculations in excess of 70% of the gross dollar volume of
stock sales, worldwide, comes from images promoted in stock catalogs. Alfonso
Guiterrez of AGE Fotostock in Spain puts this percentage at between 80% and 85%,
and says that in some countries 97% of the sales come from catalogs.
Agencies will give the most financial support to those photographers who continue
to produce aggressively, regardless of the income the photographer is receiving
from current production.
MP - I hear from major photographers that income from their major
exclusive agency is not increasing in proportion with their production and in some
cases it is falling off rather dramatically.
To express this in numbers a photographer's stock agency income may have risen in
five years from $150,000 to $250,000 per year. That's a lot of money and it is easy to
understand why the agent believes the photographer should be very happy. But, if in
getting to that $250,000, the photographer's income has actually dropped from $300,000
to $250,000 in the past year, and the photographer is getting fewer images in new
catalogs, the photographer has cause for concern.
What the agent often fails to understand is the amount the photographer is spending
on new production. Given the way the stock photo business operates the agent has no
record of such costs. The only way agents get an idea of what these costs might be is
through anecdotal reports from the photographers. The accountants have no way of
verifying the accuracy of such reports.
Photographers have the costs of studio, assistants, computers, computer programers,
models, props, travel, research in order to produce the kind of images the agency
wants, as well as film and processing. The photographer's cost in new production
may be going up at a faster rate than that rising rate of income.
Photographers are frustrated. They spend time researching and coming up with ideas
for images. They work closely with their editor to produce exactly what the editor
requests in the way of execution of the idea. Often the editor will say, "Well,
that's not exactly there yet. Re-do it this way." At greater expense, the
photographer re-does the image. Finally the editor may say, "You've got it. That is
exactly what I had in mind." Then the photographer waits months to see if the
image makes the catalog - and often it doesn't.
Images that sit in the general file, and are only seen when a client requests a
specific type of subject matter often don't sell very well.
Recently, a photographer told me that he had spent two to three weeks of his time,
and about $7,000, shooting specifically for a new catalog. He worked closely with
his editor and produced exactly what the editor said was needed. The editor chose
a number of pictures from the take and said these were what they wanted. When the
catalog came out, none of the pictures made the catalog. Based on my discussions
with top stock shooters with major agencies this is becoming a common occurrence.
In addition, by contract many photographers are not allowed to do
anything else with these images once they have been rejected by their agency. That
$7,000 and three weeks of work could be money down the drain. This expense for
non-productive images must be offset by the profits from the few images that are
promoted. Photographers see this as limiting their income potential. If they are
to continue to produce on speculation,
photographers need a business model that works for them. They need some assurance
that what they produce has a chance of being seen. If they can't get that
assurance they will stop producing. In many cases, what works for their agency is
no longer working for the photographers.
MP - Photographers have several choices:
I know of individual cases where photographers who have earned a major portion of
their income from stock have chosen each of these options in the past couple of
MSA - Faced with their top producers cutting back on production the major
stock agency must do one of the following:
MSA - If a MSA owns the best selling images, there is the potential that
they will earn
larger profits for their stockholders. I estimate that when PhotoDisc pays high
day rates to photographers, their production expenses are totally paid off from a
20% share of the revenue from those images (the photographer's normal share) within
less than a year. Possibly, in many cases, in a lot less than a year. From that
point on it's all profit for PhotoDisc.
In a seminar in New York in the '80s Henry Scanlon showed images from a production
shoot Comstock had done on a Caribbean island. Total costs for this
shoot were $30,000, a totally unheard of amount of money for most photographers to
spend on a speculative
stock production at that time. But, Henry said that sales from those images
generated more than $30,000 in the first month.
The recent Photo West conference produced some additional interesting information
along these lines. Rick Becker-Leckrone of Digital Stock had just financed a
six-day production that was shot at the American Airlines facilities in Dallas by
Jack Hollingsworth. Becker-Leckrone estimated that the total expenses for this
one shoot was about $90,000. Hollingsworth will receive a lesser percentage of
sales than his normal 20% for the work produced on this project.
Patrick Donehue, of Tony Stone Images pointed out that one of TSI's photographers
did a shoot in the past year that had over $100,000 in expenses, and that TSI
funded "a major portion of the expenses on that shoot." In exchange for TSI's
contribution the photographer agreed to accept a lower percentage of sales
than normal on the images produced on this shoot.
It should be noted that in their May 7, 1998 quarterly report to shareholders
Getty Images (parent of TSI) said, "In line with the company's strategy of
increasing its sales of wholly owned content, the proportion of sales of wholly
owned imagery increased from 5 per cent in the first quarter of 1997 to 12 per cent
in the first quarter of 1998."
It should also be noted that this increase came primarily as a result of owned imagery
at Allsport and PhotoDisc. Patrick Donehue said that TSI has no plans to wholly
own images in the TSI file. TSI will, however, continue to participate with
selected photographers on projects that are very costly to produce and for which
TSI believes there is a high sales potential. The percentages of gross sales
received will be adjusted in such cases.
MP - Some major photographers who might be considered for these funding
participation arrangements say that a shortage of expense funds is not a problem,
and thus they would rather pay all their own expenses and receive a higher
But, there are a couple things these photographers need to consider. When the
agency has a lot invested in a project, they have an incentive to give that project
a strong position in the catalog, and to promote it heavily in other ways.
If an agency doesn't want to participate in an expensive project, that may be an
indication of the kind of catalog placement the images will receive once they are
It may be a good idea for photographers to try to get funding, even if they don't
need it, in order to insure themselves better placement in the catalogs.
Clearly, the photographers who do production shoots for PhotoDisc and Digital Stock
get more of their images into the catalogs than photographers shooting on
speculation for these organizations.
SSA - So what do the small agencies do if the major agencies go in this
direction? There is no way they will have the capital to pay for production
shoots. The pictures they handle must be the results of speculative shooting.
However, they still have some advantages.
- SSA's may give their photographers a better chance to get more of their
- SSA's are more likely to hold the line on rates because they don't expect to
make a high volume of sales and won't be tempted to offer discounts for volume.
- Photographers seldom win when the agency makes volume discount deals, because no
individual photographer gets enough volume to make up for the deep discount.
- SSA's with recognized specialties tend to get called more frequently for that
subject matter than the larger agencies when clients are looking for that specific
type of work. Often the specialized agency has a more targeted selection and its
editors have a better understanding of the client's needs and can provide a more
- In the on-line and CD-ROM environment small agencies can promote their work
through joint sites that give the appearance of being one big database. At the
same time each agency maintains its own editing and pricing characteristics.
Two examples of such joint sites are Stock Workbook Online and Picture Network
International. In effect, the photographer becomes part of a large agency for
the purpose of letting clients know that the images exist, but gets the personal
attention of being with a small agency. Rather than having one single editorial
philosophy as is the case with the large agencies, each small agency on the site
has its own editing philosophy. This makes for a more eclectic selection of
imagery and often gives the photo buyer a greater variety of choice. A client
with highly specialized narrow interests, will often find a larger selection of
material in their subject area on sites where many agencies participate.
- Sales through on-line sites are a very small percentage of total sales at the
present time, but most in the industry agree that the industry is rapidly headed in
- SSA's may be more flexible in letting photographers market work not selected by
the agency through other venues around the world. On the other hand, with the use
of on-line databases, even the smallest specialized agency will be able to reach
every segment of the world market. Thus, SSA's may find it necessary to insist on
exclusive worldwide rights to the images they select for their files.
- SSA's often do a better job of selecting images for the file because the people
doing the editing are in closer daily touch with the buyers. The same person often
does the editing, picture research for the buyers, and negotiating sales. Just
because an agency is big doesn't mean it will always choose pictures that will be
in greatest demand. There are countless examples of pictures, rejected by one
agency, being picked up by another agency and marketed very effectively.
- Many photographers will have no other option. Being with an agency still gives
them a much better chance of making sales than trying to do everything
Dilemmas For Each Player
- As the agency moves toward acquiring more wholly owned work on mainstream,
high demand subjects, they will try to minimize what they are doing in their
discussions with the photographers who are expected to continue to produce subjects
of fringe interest on speculation. As this progresses the high demand subjects
become off limits to those who are paid standard royalties when an image is used.
They agency fears that photographers will stop producing if they realize that they
have very little chance of getting a high demand subject into the catalog marketing
- In order to provide a comprehensive file to their clients the agency needs
to keep the specialist for a limited number of very unique images, but will not
aggressively market the bulk of the photographer's work.
- The MSA will not want to produce the specialist images at its own expense
because the demand is not high enough to offset production costs. The MSA can make
the greatest profit by wholly owning those images that are in extremely high demand
and requiring the photographers to cover the production costs of all other images.
- Will their in-house production team be able to continue to come up with the
variety of ideas that their freelance contributors are generating today? The MSA
will still want to have those images that result from unique access, or a unique
vision or approach to the subject that comes from photographers who have
concentrated on high demand subjects in the past.
Small agencies have a constant struggle in letting a broad enough client base know
that their imagery exists because they have such limited funds to spend on advertising.
Will technology enable them to compete, or will they be priced out of the market?
- By joining other agencies in joint marketing plans like Stock Workbook and
PNI will they be forced to give up too much control and identity?
- Will the MSA's license high demand images at lower prices, thus forcing SSA's
to lower prices in order to compete? MSA's will be able to do this because they
will share a smaller portion of the fee with the photographer.
- Can photographers earn more through the volume sales of the very few
mages their major agency chooses to represent, or will they do better with a
smaller agency that will show a broader cross section of their work?
- Is there some way for them to get the best of both these worlds? Is it
possible to give the major agency first look and then turn everything else over to
the small agency?
- In the new marketing environment is it possible to earn enough from stock
to offset their continuing production and marketing expenses?
- Should they seek guarantees from their agency, either in terms of
production costs, or guaranteed space? Or should they continue to produce on
speculation as they have in the past and go for the highest possible percentage of
- Photographers, represented by a major agency, who produce high demand
subject matter that competes with the wholly owned images of the major agency will
find that they have trouble getting this material seen in the catalogs of the major
agency. The major agency will want to concentrate on showing their wholly owned
material so they can recover their production costs and make a greater profit on
- Which is better for the specialists? The big agency that wants to keep them,
but does little to promote their work, or the small agency which will show more of
their work, but to a smaller cross section of buyers? The answer will change as
on-line becomes a more dominant catalog system.
- The photographer who in the past has earned significant income from a few
images in high demand subject areas has a particular dilemma. The SSA may not
market those few images as effectively as the MSA might, but if a photographer can't
get his or her MSA to continue putting the same volume of images in their catalogs, then
the SSA's may be the better choice.
- As percentages drop and the photographer gets fewer and fewer images in the
major agency catalog, will he or she do better by marketing the work direct to
clients or by going with an SSA?
- Many photographers will have no other option. Being with a small agency still
gives them a much better chance to make sales than trying to do it on their own.
There are so many intangibles that when a major agency offers up front payment it
will be an offer that is hard to turn down.