229 "ARTIST CHOICE" AT EYEWIRE
June 16, 1999
EyeWire, probably the third largest seller of "Royalty Free" photos in North
America, is offering "Rights Protected" contracts to photographers in a move to
develop a separate division of their business. With this move EyeWire expects to
be able to supply a full range of photo services to their customers on their
on-line portal site. Photographers who participate
in the RP division will also have the option to supply images for RF, but it will
not be a requirement and images will not be licensed as RF without specific
permission from the photographer.
In March, EyeWire hired Charles Mauzy, formerly of Corbis, to head their new product
and business development office in Seattle with an initial focus on developing the rights
protected division. The company is following in the footsteps of other major photo suppliers
who offer both Royalty Free and Rights Protected images to their customers.
They expect a soft launch of the "Rights Protected" section of their site in late
fall. Drina Lazar, VP of Content Development at EyeWire said, "Our assumption is
that we can go on-line with a tiny, tiny little file. There is no barrier to us
putting images on-line since we are already putting all our RF material on-line.
All we need is some type of pricing mechanism (for Rights Protected)."
Probably the most unique feature of this contract is the "Artist Choice" concept.
A photographer can designate, at the time of submission, up to ten images per year
as "Artist Choice" and will receive royalties of 70% on the licensing of these
images. The photographer receives 50% on the licensing of all other images.
Mauzy pointed out that initially, in addition to making the images available
on-line, they will probably promote many of the
"Artist Choice" images in their print catalog (64 page brochure) that is mailed
monthly to approximately 750,000 buyers.
Some photographers who have viewed the contract feel this concept is not just a
new idea, but a clear attempt to snatch the best selling images from the Corbis
file. One photographer called it a very "Machiavellian" strategy.
There is a loophole in many (possibly most) of the original Corbis contracts that
Mauzy negotiated. Hundreds of photographers with non-exclusive agreements are
allowed to remove ten (10) images per year from the Corbis archive so they can sell
them "exclusively." Consequently, Corbis photographers could identify their best
selling images, take them to EyeWire, and, in theory, get
70% of future sales instead of 45%.
When the Corbis contract was originally developed many photographers were reluctant
to put their best images into an online database for fear that one day someone
might want to use one of the these images for a major ad campaign and the
photographer would be unable to license exclusive use because Corbis would be
making small on-line sales.
To meet this objection Corbis agreed to let any contributor withdraw up to ten
images per year for the purpose of exclusive licensing. Photographers believe
there were discussions within Corbis at the time suggesting that the photographer
should be required to demonstrate that an exclusive sale was imminent before an
image could be removed. However, the final language made
no requirement and the photographers are now free to choose any ten images per year
that they want to remove with no explanation as to why.
When this photographer thinking was explained to Mauzy he said, "In all honesty that
had not occurred to me." Ms. Lazar said of
the concept, "It was something we thought would be appealing to photographers in
general, not specifically Corbis photographers."
Mauzy said his goal is to identify the best shooters and eventually work with about
100 to 150. "Many shooters have their best work under exclusive contract with some
agency. We are looking for people who can produce new work for us, not try to go
after older work in the files," he explained.
At first glance the chance to get 70% would seem to be an irresistible draw.
However, based on my thirty five years of selling stock images I have found that
where the image is has a lot more to do with the volume of sales it generates than
whether it is a "great image." I have always had dupes of most of my images with
many agencies. My experience has shown that best sellers at
one agency do not necessarily sell well at a different agency.
Buyers tend to develop preferred resources for locating pictures and this varies
from buyer to buyer. They usually choose the best image they can "easily" find,
not necessarily the best image that can be found anywhere. If an image is no
longer at Corbis that doesn't mean the buyer won't pick something else in the
Corbis file rather than going to EyeWire, or some other place, to find the one
perfect image. The "Artist Choice" strategy may get EyeWire a few big "names"
and bring some images to the file, but it may not produce the returns
photographers are realizing with other agencies.
The problem with putting newly created, untested images into "Artist Choice" is
that it is usually a crap shoot trying to pick the images that will turn out to be
best sellers. Photographers tend to think their most recent production will be a
winner. Some may feel strongly about images produced in January and put them in
"Artists Choice" only to discover that they produce even more marketable images
before the end of the year. In all likelihood many of the images picked from
future productions for "Artist Choice" will turn out to be poor sellers.
On the other hand the print catalog promotion of these images might drive the
volume of sales and turn many into best sellers.
One thing that does not seem to be an option with "Artists Choice" is to convert an
image from "EyeWire Selects" to "Artist Choice" a year or so after an image has
been working in the EyeWire file. At that point the photographer would have some
idea as to whether the image was likely to be a best seller at EyeWire.
Ms. Lazar indicated that they hope to get feedback from the photographers and
depending on photographer reactions modifications might be made in certain provisions.
One suggestion I would make is that photographers might want to try to
negotiate a higher number of "Artist Choice" images than ten. Ten is a very
Percentage Of What?
An important issue to be understood is exactly how royalties will be calculated.
When EyeWire sells directly to End Users it is clear what the royalty percentage
will be, but when sales are made by "distributors, agents, or
sub-agents," it is unclear what percentage of the gross fee collected will
eventually be paid to the photographer. EyeWire has not explained how they will
operate their "network" and the percentage of the total sales that are likely to
be made by other sellers rather than licensed directly.
If some other "agent" makes the sale what percentage will that agent
take off the top -- 30%, 40%, 50% -- before the remaining monies are passed on to
EyeWire? One of the difficulties with an organization that is starting a new
line of business is that things like this have yet to be defined.
Ms. Lazar said they have not had discussions with SuperStock or any other sales
agent in the U.S. about handling negotiated sales for images on the EyeWire web
site. "Our intention is to focus on the web which is a direct channel and
E-commerce." (This might imply a lot of fixed price selling and very little
She acknowledged that the terms in the "Royalty and Payment Schedule" of the contract
leave open the option to sell through such agents, but, she said, "we haven't
gone down the initial road of trying to sign people up, or looking at this
It is understandable that EyeWire may not know, at this point, what
kind of deals they will cut with distributors and sub-agents in the future. For
this reason one photographer suggests that it is necessary to add a clause that
establishes a floor, or minimum percentage of the "gross sale" price, that the
photographer will receive on every sale. This photographer believes that floor
should be in the range of 30% to 35%, but the percentage will have to be
EyeWire wants world-wide exclusive rights to selected images plus similars. The
similars issue has become a major problem in the industry because it can lock so
many images out of the market. EyeWire's definition of Similars, "means any
Contributor image (including a duplicate or composite) of any image whose principal
elements are depicted in a way that, when compared side by side to the
Contributor's images, would cause an End User to believe they are substantially the
same." For many photographers this is too rigid.
The contract goes on to say, "Exclusive means that, commencing on the Effective
Date ... Contributor agrees not to provide any Content, including composite works,
derivative works or Similars, to any third party on any basis whatsoever, except
for the Contributor's personal promotional purposes where no rights are granted."
At the very least this says you can't sell similar
images yourself, but moreover since it says "any content" and "any third party" it
may prohibit photographers from making any photographic sales to anyone.
This is probably not what was intended and it will probably be changed for those
who request a change, but it points out the dangers of signing a lengthy contract
like this without very careful examination.
The exclusive aspect of this contract will be a major
stumbling block for many photographers. Some feel it would be
foolish to risk their best images on this type of deal until there is some
demonstrated track record. If EyeWire had a large "rights protected"
file and demonstrated sales of those images, like TSI, The Stock Market, TIB or
FPG then a world-wide exclusive might make sense.
Mauzy indicated that they might be willing to negotiate on the "exclusive" issue
in a few special cases, but both he and
Ms. Lazar emphasized, that they needed exclusives in order to be able to offer
rights controlled sales.
My suggestion to those who have an interest in EyeWire's would
be to push hard for a non-exclusive agreement for the first couple years until
there are photographers with demonstrated "rights protected" sales from this
operation. The fact that EyeWire had been successful at selling RF is
no guarantee that they will be able to build a successful RP model.
Photographers should also be cautioned that a simple changing of the words
"Exclusive Rights" to "Non-Exclusive Rights" in the Grant of Rights section is not
enough. The word "exclusive" is sprinkled throughout this contract and
photographers need to deal with every instance very carefully to make sure they are
not giving away more than they intended.
Some photographers believe it is reasonable to give an agency world-wide exclusives on
those images that are actually placed in a print catalog. I
am not convinced that even makes sense with a start up operation like EyeWire's.
Considering the oversupply of print catalog images in the marketplace today, such
catalogs may tend to do more to promote the general file of the agency than
sell specific catalog images.
This may be particularly true for the "throw away" brochure type catalog that is
EyeWire's prime marketing vehicle. Buyers do not store these on the shelf like
they do a thick print catalog. This method of pushing individual images may work,
but as yet it is untested. Keep some options open.
If EyeWire has a client who wants to license exclusive rights to a particular image
make them come back to you and get clearance. These situations happen so
infrequently that this is no great burden and when they do happen the buyer almost
never needs an instantaneous decision.
EyeWire also wants the exclusive right to: "alter or modify the Content in any way
EyeWire sees fit, including, but not limited to, create derivative works, composite
works ... at EyeWire's sole or exclusive discretion."
There are two problems with this. First the photographer has no say over how his
work is altered. However, possibly worst is that it is not clear how the
photographer will be compensated for any
"derivative works" or "composite works" that are created. One photographer said
that if this clause can not be changed it would definitely be a deal breaker. He
believes that EyeWire should not be allowed to use his images to create "derivative
or composite works" unless they discuss the specifics with him prior to the
creation and work out an acceptable royalty division for future licensing of the
Risk Of An IPO
"EyeWire may assign any of its rights and obligations under this agreement without
prior written concent of the Contributor. The Contributor may not assign any of
its rights and obligations under this Agreement without the prior written consent
This sets EyeWire up to sell the company and photographers need to think long and
hard about what the new owners business philosophy might be. (At this stage, we
don't even know much about what the business philosophy of EyeWire.) The safest
thing is to insert a clause that says something like, "In the event of sale or
transfer of ownership of the company Contributor will have right to terminate
Contributor's agreement with EyeWire on 30 days written
notice until that time when a new contract is executed. Upon termination all files
of Contributor work will be removed from the database and all analog images will be
returned to Contributor within 60 days."
While this is a question for a lawyer, this clause may also prevent a photographer
from passing on rights in his estate and limit the options of his heirs.
One thing not mentioned in the contract, but very important to understand, is their
pricing strategy. Ms. Lazar said, "Given the web model it would have to be a lot
of fixed pricing, but we are feeling our way through this with input from key
It is important for photographers to understand what these pricing schedules might
be particularly in light of the fact that the company is coming from a "Royalty
Free" philosophy. EyeWire's sales staff works from fixed price schedules.
Photographers should want to know who will be training the sales staff in
negotiating techniques and what experience that person brings to the table. Mauzy
clearly understands that there are many uses that need to be negotiated, but the
key to success will lie in the person charged with providing the day to day sales
training in Calgary.
The percentage of fixed price sales relative to negotiated sales is also important.
For purposes of comparison, in the Picture Network International model the low
end, fixed price sales make up about 70% of the volume, but probably represent less
than 30% of the gross revenue.
The following are some of the other points in the contract that need to be
carefully examined. In some cases I have also suggested some negotiating
- Captioning and keywording will be a critical issue that needs to be
explained in more detail. Photographers should look at the "captioning guidelines
for contributors" before they jump into this contract. Many photographers who
initially put images with Corbis (and this business plan has a lot of simularities
to the Corbis
model) have said that they spent a lot of staff time and money preparing caption
information for the Corbis system. Many said the $4.50 per image advance they were
paid was eaten up in caption preparation. Many took months to get the selected
images captioned to the satisfaction of Corbis. EyeWire is not offering an advance so
the photographer will have to absorb this up-front cost.
- In item 6(b)(ii) and item 6(c) the photographer is responsible to have all
releases and waivers so Eyewire can use the content any way they want without
having to get any other clearances. This can be very risky for people pictures --
even third world people -- as lawyers in these countries get sharper. The strategy
of laying all the responsibility on the photographer is not one that ought
to please photographers, particularly in the current climate where many buyers
tend to manipulate and
misrepresent the original intent of the imagery. This is a time when image
producer need to be looking for better ways to control how their images are used
rather than laying them out without any controls whatsoever. The indications from
the Contributor Agreement language is that
EyeWire will place no controls on the use.
Keep in mind the PhotoDisc story. Photo District News is reporting in their current
online edition that PhotoDisc made a $1.9 million settlement for the uses that
were made of one of their images without a proper model release.
PhotoDisc is now suing the two agencies who were involved in supplying the image
without a valid release.
On Schedule "C", items 4(b) and (c) it talks about release guidelines and that
releases "shall be required for all images selected". Before spending a whole lot
of time reviewing this contract photographers need to get a look at these model
release guidelines and see is they are going to be able to comply. If they can,
then the question remains in light of 6(b) and (c) whether they will want to take
- Item 7(c) seems to indicate that the photographer could write no-release on
every image and would not be responsible if a model release question came up.
However, in the "Warranties" (section 6) it seems that the photographer must
warrant that all images have releases, or they will not be accepted. This is a
question for a lawyer, but I don't think the photographer is going to be protected
in this situation. I think the contract probably has to be
amended or re-written on this point if photographers are going to supply people
images. As I see it the contract is very burdensome from the warranties point of
- Item 10 deals with the term of the agreement. It seems to me that if an
image is only being marketed on-line it should be possible to pull it at almost any
time. EyeWire may want three years because they want to recover their costs of
drum scanning. The other issue is that the dates are based
entirely on the date the image was accepted, not on the signing of the contract.
Thus, in the event the contract is terminated there will be a long lag time in
getting material back and it will come in dribbles and drabs. It will be a long
time [12(c)] before the contributor can begin to license similars.
- In item 14(i) it is clearly stated that Eyewire is not an "agency". This has
become common among many major image sellers. This clause means that Eyewire has
none of the fiduciary responsibilities to act in the best interest of photographer
that an agent would normally have.
- Every image that goes on-line will be drum scanned to at least 42MB and they
are considering the possibility of scanning them larger. Current plans are to
return the original film to the photographers, but a lot will depend on input from
- One good thing is monthly payment. This is certainly much better than Corbis
which is still holding to quarterly payments for no reason other then greed.
- According to Mauzy, EyeWire is focused on the "business to business" market,
not the consumer market. This certainly separates them from other large players
like Getty and Corbis who seem to be directing a lot of emphasis toward the
The two philosophies -- consumer or business professional -- require different
focuses in marketing. In addition the image files will have widely differing
characteristics. In choosing an agency to handle their work, photographers need to
think long and hard about which one of these markets they are most interested in
pursuing. Most agencies will do better at selling to one of these markets than to
- EyeWire is a Delaware company, with offices in Calgary, Texas and Seattle. This
means there probably will be no payment and U.S. tax problems for American photographers.
However, if there are any disputes they must be litigated in Canada according to the
- Ms. Lazar indicated that photographers would not be allowed to just put
images in the "Artists Choice" category and put little or nothing into "EyeWire
Selects." "We want photographers who will give us a significant number of images,
but we didn't feel we could define minimum numbers of images in the contract," she
explained. Nevertheless, if EyeWire starts providing a list of "name"
photographers who have signed on, it may be wise to be skeptical and try to
determine the number of images each has supplied to the file. Don't assume other
photographers signed the same agreement you have been offered.
- Corbis photographers may be in a strong negotiating position. One Corbis
photographer pointed out, "There are many points where the Corbis contract gives me
a better deal than EyeWire. I am going to lay the two contracts side by side and
insist on at least as good as Corbis, if not better, on every point -- plus the 70%
-- before I consider moving."