Buyer Confusion About Rights Licensed

Posted on 11/5/2013 by Jim Pickerell | Printable Version | Comments (3)

One of the surprising things that came out of this year’s Visual Connections event in New York was the degree of confusion and misunderstandings  graphic designers and art directors have about image rights. Many seem unsure as to what they can and cannot do with the images they license.

The main purpose of Visual Connections is to provide a venue where image buyers can review the offerings of a number of stock agencies and make contacts with agency sales representatives. This year 72 different stock agency brands from around the world exhibited including 22 agencies from outside the US.

However, prior to the opening of the exhibit floor there was a two-hour session where buyers could ask questions of a panel of experts on all aspects of sourcing, licensing and using images and footage. The room was packed. The questions focused on copyright, fair use, orphan works, royalty free, rights managed, and the changing ways images are being used.

Nancy Wolfe was the only attorney on the panel and she was kept busy fielding questions throughout most of the session. Some buyers wanted a clearer definition of “fair use.” Others wanted to understand when an image is in the “public domain.” It is important to note that most of the people in attendance were experienced, professional buyers, not amateurs or people new to the industry.

One of the big problems image buyers face in the rapidly changing world of media and advertising is that when they license an image for a project they often have very little idea of how their client might want to re-purpose the end product in the future. Also, there is no universal standard RM or RF license. The agreements of each agency vary slightly.

Most image users are willing to pay a fair rate, but they also don’t want to pay more than necessary. They also want to protect themselves from unanticipated surprises once the project is complete. The fact that there is no standard definition of either RM or RF makes their lives difficult.

Many buyers seem not to understand that all “Royalty Free” licenses are not equal. Traditional RF sources allow unlimited use (with a few exceptions) of each image file purchased. Most companies that license Microstock RF put a 500,000 copy circulation limit on most uses unless an “Extended License” is purchased. It is often unclear if that number relates to online impressions, or whether online uses are truly unlimited. RF prices used to be fixed depending of the file size purchased, but more and more they are being negotiated downward dramatically from the posted list price.

Some designers feel that if they license a RF images they can legally use it in several different projects for different customers. Usually, the designer is supposed to report the name of the “end user” and re-license the image for each new “end user.” But, if the designer works for a large corporation that has several different end user divisions in-house is it necessary to license the image again for each use? That is not always clear.

Is it always important to discuss the specifics of each use with the agency’s sales representative? If so, what’s the point of online pricing?

Of course the rights, and usually a list of ways the images can’t be used, are spelled out in great legal detail in each agency’s License Agreement. These agreements can usually be found on line, but are not necessarily supplied with the image file. The length of some of these documents is interesting.

iStock’s Content License Agreement 4,051 words
Shutterstock’s License Agreement 3,749 words
Dreamstime’s Standard License Agreement 9,101 words
Fotolia’s Standard License Agreement 3,968 words
Getty Images’ Editorial and RM License agreement 5,728 words
All Getty License Agreements 14,600 words

These documents are regularly updated and modified. So just because a buyer read and understood the document a year ago, doesn’t mean all those same terms are still in force today. And even when that buyer clearly understands the license agreement usage issues still arise that are not clearly spelled out in the documents.

Then, of course, we get to Rights Managed where the customer is supposed to license each specific use. This used to be easy because virtually all uses were for print and there were hardly ever any supplementary uses of a particular project, or other ways a specific client might use the image. Now, with the Internet and guerrilla marketing campaigns there are a host of possible ways that any communication message might be presented to various segments of the customer’s market. These are limited only by the imagination of the creative director and the end user of the project.

Often, at the time a project is initially conceived no one has any idea how that project may morph over time and no one wants to come back and re-license each new use when the project takes a new direction. In many cases there simply isn’t time to go back and negotiate additional rights. At the same time customers are reluctant to pay for unlimited rights for every project when they know that in the vast majority of cases the project will never be used beyond a small, initial use.

What Does This Mean For Image Sellers?

If we expect to have a sustainable business we need to find a way to simplify licenses and harmonize them across the industry.

RM sellers need to seriously consider whether their strategy is workable in today’s communication environment. Image buyers have an increasing number of options available to them for reaching the consumer. They are constantly being asked to test new ideas.
Based on the data I’ve been able to collect RM licenses currently represent less than 2% of the image uses licensed annually, worldwide. That percentage is steadily declining. Customers are looking for simpler, easy to understand licenses that offer them more flexibility in how they can use the images they purchase. They want lower prices, but it is not just about lower base prices.

In order to try to hang onto their best customers RM sellers have often lowered the price of RM and traditionally priced RF images to levels below microstock pricing. Based on an analysis of a number of Getty sales reports from large suppliers more than 25% of Getty Images licenses are for gross fees of less than $25. Recently, Alamy reported that 22% or their licenses in 2012 were for $25 or less. While these low prices may result in growing unit sales they have not significantly increased gross revenue, and they are making it harder and harder for image producers to survive.

None of the current licensing models may be working well for both image creators and customers. Finding a way to adequately adjust these models so the volume of low priced sales for each contributor will offset the loss in revenue from occasional large uses may not be easy. But it may be time for a complete re-examination of the way the industry licenses image uses.

Also check out Licensing From The Buyer's Perspective.

Copyright © 2013 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 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, 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:  


  • Todd Klassy Posted Nov 5, 2013
    Great article. $25 for a RF image, in my opinion, is lunacy. I sell images on my own to clients and I can't recall the last time I licensed a RF image for less than $50, and that includes sales to mom & pop business, individuals, and non-profit organizations.

    Getty, Alamy, et. al. need to begin hiring some salespeople who know what they are doing instead of focusing on how to rip off photographers.

  • Paul Melcher Posted Nov 5, 2013
    This is why fee based on usage is intrinsically flawed . A supermarket does not ask you what you will be doing with those potatoes before charging you a price. The stock photo industry does and in this new digital economy, it just doesn't work anymore.

  • Bob Zentmaier Posted Nov 6, 2013
    re Todd Klassy's comment: Right on!

    Photo Researchers is one of the last of the pre-digital age stock houses specializing in science and working with suppliers on a 50/50 basis. We would have been gone long ago if we started giving away this expensive to produce, hard to find content!

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