Contract Negotiations

Posted on 8/24/2000 by Jim Pickerell | Printable Version | Comments (0)

334

CONTRACT NEGOTIATIONS VS. BUSINESS STRATEGY




August 24, 2000





Contract negotiations is the buzz word among photographers today. Cobris is developing

a new contract (partially revealed, but evidently still not in its final form) which

affects photographers with Sygma, Saba, The Stock Market, Sharpshooters, those formerly

with WestLight and those who have signed directly with Corbis.

As Getty Images integrates The Image Bank, FPG, The Telegraph Colour Library and the

other VCG companies they need to produce new contracts that will let photographers who

were formerly with these companies know where they stand in the new relationship.

Getty feels there is no great rush to develop new contracts because all the existing

contracts which they inherited remain in full force and effect until there is a new

contract.

On the hand the photographers recognize that the goals and directions of their new

company are different from those of their old companies. There are changes in the

working relationships and the purpose of contracts is to spell out and codify such

changes. At the very least photographers are likely to slow production until they have

a clearly defined deal with the new company.

In addition Stone's contracts with their photographers are due to expire in the fall of

2001. Already many Stone photographers are talking about changes they want to see in

the "new contract."

There are many issues that photographers want to see changed. I discussed some of these

with relation to the Corbis contract in

Story 325 .

When the Stone contract was released two years ago, I published an interview

Story 169 with

Jonathan Klein that dealt with many of the the issues that concerned photographers at

the time. These stories outline some of the issues, but by no means all of the places

where photographers would like to see modifications.

Business Strategy Analysis

However, the central problem with most current photographer proposals is that they fail

to adequately take into account the radical differences in business strategy between

the ways stock agencies used to operate and the way the Internet focused businesses of

Getty Images and Corbis intend to operate.

No amount of negotiations will force G&C to operate their businesses in the way stock

agencies were operated in the past.

Yet, that is what many photographers seem to want. G&C believe

the stock photo business will eventually be 100% digital delivery and that the vast

majority will be e-commerce. Thus, unscanned images simply will not exist.

At this point in time maybe 20% of the stock photo business is digital. Last quarter

44% of Getty's business was e-commerce (excluding TIB and VCG which were not fully

integrated at that point). If sales of CD-ROM's were added to this more than half of

Getty's business would result from digital sales.

A case can be made that a high portion of gross stock revenue for the industry will

come from researching analog files for a long long time. G&C either don't believe that

is true, or they think it is irrelevant to the success of their business model.

Unfortunately, the future of analog sales is not irrelevant to the business models of

many photographers.

If analog images do represent a significant portion of future sales G&C will get little

of that business because they are structuring their operations to do away with their

analog files. This won't happen overnight, but Getty's goal is to return all unscanned

images to the photographers and Corbis wants to return all images -- even those scanned

-- to their photographers.

C&G may modify their contracts so long as the modifications are consistent with their

overall strategy, but it is highly unlikely that any group of photographers will be

able to apply enough pressure to convince either of these companies to totally alter

their business strategy.

Each photographers needs to focus on understandings the distinctives of these business

strategies and their implications for the marketing of the specific type of work the

photographer produces. If the strategy itself has flaws then no amount of negotiation

is likely to provide a satisfactory long term relationship. Nevertheless, individual

photographers may be able to use Getty or Corbis to improve their short term options,

as they continue to look for better long term solutions.

It is interesting to note the number of photographers who were among the top producers

at Stone three to five years ago, that no longer seem to be getting images into the

Stone catalogs. If you are acquainted with any of these people it might be interesting

to talk to them and determine why. They may have figured out early that Getty Image's

long term strategy was not consistent with their long term goals for their photography.


Copyright © 2000 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 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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