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
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
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.