Conversation With Sheldon Marshall

Posted on 12/13/1998 by Jim Pickerell | Printable Version | Comments (0)



December 13, 1998

In a recent conversation with Sheldon Marshall, Chief Executive Officer of Visual

Communications Group, outlined some of VCG's future plans for involvement in

the royalty free market and for general marketing using the web. He also sheds

some light on several issues of recent concern to stock photographers including

percent of sales, the cost of catalog participation and photographer return on


The VCG group includes: the Telegraph Colour Library (UK), FPG (US), PIX (France),

Bavaria Bildagentur (Germany), Colorific (UK), Planet Earth Pictures (UK), and

Giraudon (France).

Royalty Free

JP - What plans do you have to introduce royalty-free products in the


SM - Basically we have been looking at the market for some time and we made

a decision to enter the market by producing a range of products which will surface

in the middle of 1999. We are in a situation where fundamentally our clients are

demanding those products and we have a situation where Getty, Image Bank and Corbis are in

the game so we have to have a response.

JP - Will that be discs, on-line or both?

SM - At the moment we envisage both. But, it seems to us that the business

is very much gravitating toward the web. Having said that, not all markets are at

the same rate of development as North America. It will be a while before all

markets can have the same connectability to the web. So CD's will be an important

part of the whole marketing mix.

JP - Will you be putting out print catalogs with those CD's?

SM - Yes, we plan to produce a print catalog to go along side each CD.

JP - Will you attempt to acquire an existing RF company, or build a RF

division from scratch?

SM - At the moment we don't have any plans to acquire a business. Our

initial planning is to start the RF from scratch.

JP - It is my understanding that earlier this year you had discussions with

Digital Vision, and possibly others about acquisition.

SM - We were looking at a lot of options. Along the way we had discussions

with PhotoDisc and Digital Stock. Now, they have been acquired and Image Bank has

acquired Artville. We talk to everybody. We were trying to work out how best we

could go forward in the RF business. None of those discussions came to anything.

JP - What percentage of royalty free sales do you anticipate that the

photographers will receive?

SM - We haven't put together our final proposal, but we did announce to our

photographers that it would be in line with existing RF industry practice. My

understanding is that the current industry commission rate is about 20%, based on

the proportional number of images on a disc, or an on-line sale.

JP - As I understand it that is 20% if the sales are direct, and a lesser

percentage if a distributor is involved in the process.

    [Editor's Note: We understand that in many cases the distributors of RF discs

    get 60% of the gross sale leaving 40% for the disc producer. At that point the

    photographer's 20% share of the disc producer's income works out to about 8% of

    the gross sale. Sources also tell us that Getty and PhotoDisc are actively

    attempting to purchase many of the PhotoDisc distributors which would give Getty

    92% of the gross fee collected on many of their CD-ROM disc sales.]

    [Based on Getty's model, the agent or representative in the country where the sale

    is made, will receive their normal share of the sale before the remainder is

    transmitted to the parent agent. In such a case the photographer will receive

    much less than 20% of the gross fee.]

JP - Will you be looking for new suppliers of RF images for your discs and

on-line site?

SM - It is dependent on the type of imagery required. There are images

that are being sold as RF that don't fall into the traditional stock photography

mold, and there are areas where you need to have specialists which we don't

necessarily have as a stock agency. Our main focus is to work with a limited

number of our existing suppliers. But, these royalty free arrangements won't

necessarily suit everybody in terms of the style and range of photography that we

intend to publish.

The answer is that we will start with the people we know, but we may have to take

on people which can extend the image range that we can offer.

On-line Sales

JP - I understand that VCG has made arrangements with a California company

to begin licensing PEP (Planet Earth Pictures) images online, and that the

photographers will receive 25% of the gross fees charged for these usages. I'm

not sure whether there are images from Telegraph, or FPG included on this site.

Is this RF or will these images be licensed at traditional rates?

SM - It is not strictly RF. We've got a test site up for PEP because

obviously we want to learn more about the market. It has a relatively small

amount of images.

JP - What is the URL of that site?

SM - The site should go up by the end of December. It is actually up in

Beta form now. The site is looking at not only stills, but some footage as well.

JP - Do you own a footage agency at this point?

SM - We don't own a footage agency, but within the group (United News &

Media plc) there is a company, United Wildlife, which has a very large quantity of

footage specializing in wildlife, natural history and travel.

JP - But, in this site in California only still images involved are from


SM - That is correct. There are a limited number of photographers who are

participating on the PEP site.

European Web Site

JP - What plans do you have to set up a VCG or Telegraph web site in Europe

that will have content separate from what FPG has on-line?

SM - We are currently working on that. We hope to have that site up in the

early part of next year.

JP - Will there be crossover images? Will you use some of the FPG images,

or will the European site be totally separate?

SM - The FPG site itself hasn't got full inventory yet. The group images

(images from other agencies in the group) are not yet up online. In principle,

both sides will have group images. The current model is to reflect the catalog.

There is a different publishing program in North America so the images on the FPG

site are in many cases different from the edits that take place for Europe and the

rest of the world. Eventually the whole editing will reflect, perhaps, a more

common approach, where we can show the same images on both sides.

    [Editors Note: We did a story in October on the launch of the FPG site and

    pointed out at that time how poorly keyworded the images were on that site.

    Rebecca Tayor of FPG told us at that time that they were still importing data and,

    "We hope to add additional data in a week or two and have all the data in place in

    at least a month." In doing some test searches today, almost two months after the

    story was written, there is very slight improvement. Rebecca Taylor reports that, "No

    changes have been made to the site so far." In my estimation the FPG

    site is still a long way from being an efficient search tool.]

Charge For Web Site Participation

JP - How much will photographers be charged for images that go on these


SM - We haven't finalized that yet. We are looking at increasing the

existing space charge for images in the print catalogs to cover on-line costs.

    [Editor's Note: If they increase the charge for print catalog participation

    then the web site costs will be paid from sales generated by the print catalog,

    not necessarily from sales made from the web site. This guarantees VCG earlier

    payment of costs as the web site is developing customers, but is not necessarily

    in the best interest of the photographers.]

JP - Will the only images on your web sites be those that appear in the

print catalogs? What about images that don't make the catalog?

SM - We haven't addressed the individual non-print-catalog images. When we

launched the FPG site we didn't charge anybody anything. We wanted to get the

site out there and we wanted to get some experience. But, there are costs in

maintaining, operating and marketing these sites. We need to look very closely at

all the charges. We started off with catalogs and dupes. Now we are producing

CD's, high res files, and a web site. There are numerous levels of expenditure in

which we are involved.

Going forward the role of the catalog itself may change. The web will become the

on-line catalog for most of our clients. So there may be differences in cost

structure over the next three to five years. We are currently looking at these

changes group wide. We want to come up with a uniform package.

JP - But, you have not established a price to photographers for putting

images on the web site?

SM - To give you an indication we said at a recent meeting that we were

looking at a cost of about $80 increase in our current space charges (for the

print catalog) to reflect the making of the high res file, the indexation of the

image and getting it onto the web. But that is not a confirmed number yet. We

will be getting back to our photographers within the next month or so with a more

validated answer.

JP - Whatever the charge turns out to be, will it be the same regardless of

whether the image ends up on one site or both sites?

SM - Again, I haven't got an answer to that. At the moment we haven't made

a charge in North America for adding images to the site. I suspect there may be

two charges. One of the reasons is that we are calibrating slightly differently for

the North American market.

JP - Your calibrating differently?

SM - Yes, the printing process in North America is different to Asia and Europe.

We scan in CMYK but customers calibrate differently in the two areas of the world.

It is an issue of printing inks, density of inks and the way

separations actually come down on the paper. There is a fundamental difference in

printing in the U.S. market. That results in calibrating in a slightly different

way. The effect of that is that we scan images in one way for the American market

and we will be re-scanning them in a different way for the European market.

JP - How large a file are you normally producing when you scan?

SM - We are scanning 28MB files which are then compressed down for the


Percent of Sales

JP - I believe all your wholly owned offices keep 50% of any fees collected

before submitting the remainder to VCG and that amount is then split with the

photographer giving the photographer 25% of the gross sale price. Is that true?

SM - That is correct.

JP - How long has that policy been in force?

SM - Obviously, you know that the group has grown by acquisition and that

it has acquired more recently its German agent (Bavaria) and FPG in the U.S. In

the case of FPG it has always operated on that basis with us, even when we had a

cross representational agreement with them, prior to acquisition.

JP - It is my understanding after doing some recent checking that as far

back as the late 1980's FPG was allowing many of the foreign agents who took their

catalog to keep 50% of the gross fee collected.

I believe most of their photographers (myself included) thought the split was

60/40 in favor of FPG, and thus the photographers thought they were receiving 30%

of the gross sale. In fact we were receiving 25%, but we failed to ask the right

questions and thus never understood the true situation.

SM - We offer a range of commissions where the selling agent retains

between 40% and 50%. We also have figures in between depending on performance

levels and commitment to marketing, etc. We've always had a similar range and we have

always been direct with the photographers about it.

JP - Where are your wholly owned offices?

SM - Germany, France, UK, and North America.

    [Editors Note: It is generally believed that these four areas of the world

    represent in excess of 80% of the gross sales of stock photography worldwide.

    These wholly owned offices retain 50% of all sales for their operations before

    submitting any income from images produced outside their territory to VCG group

    headquarters for later division and distribution to their photographers.]

JP - As you know there are many major agencies that only allow the selling

agent, even wholly owned offices, to retain 40% of the gross fee collected. Thus

the photographer gets 30% of the gross fee instead of 25%. Given this choice, why

would a photographer want to put his work with a VCG agency rather than getting a

larger percentage with someone else?

SM - There are a number of agencies that work in a number of different

ways. The commission element is an important part, but not the only part. We

have always been very selective in the choice of our (agency) partners. We have

worked hard to make that relationship meaningful. We don't have thousands of

active photographers. We have a fairly tight nucleus of producers for the group.

I think those people, in general, are happy with the arrangement, which they were

well aware of when we entered into the arrangement, and with the results we have

actually delivered.

Cost of Catalog Participation

JP - It is my understanding that VCG advances all the money to pay for

catalog production costs until the catalog is distributed. At the point that

sales are made on a particular image VCG gets all the money collected until the

photographer's share is paid off. Is that correct?

SM - That is correct and that has always been our policy. I think most

agencies operate on that basis. We have not had a problem with it.

JP - Some agencies give the photographers some part of the early sales. In

some cases the photographer receives 50% of his normal share of the fee until the

catalog fee is paid off. There are also discounts for photographers who pay in

advance. There is not one uniform system.

SM - The other point is whether it is done on an image basis or a portfolio

basis. When a photographer has a portfolio of images he will be earning something

on some of those images. That's the offer we have had on the table all along, and

we haven't changed it.

JP - Since the charge is on a image by image basis, if a particular image

does not sell well, it is my understanding that the photographer is not charged

the total catalog fee for that image. For example, if the image fee is $400, and

over its lifetime the image only produces $400 in fees which would make the

photographer's share somewhere between $100 and $200 then the total the

photographer would ever be charged for that images would be the amount he would

have collected, not the $400. Is that correct?

SM - That is correct although it is generally not a problem.

Photographer Return On Investment

JP - What is the average length of time after the catalog has been released

for photographer's to pay off their catalog fees and start earning income from

their images?

SM - That is a difficult question for me to answer. With the number of

catalogs we have been producing the life cycle of the catalog is getting shorter.

We are seeing in some markets a quicker "up lift" in sales immediately (after

release of the catalog) and a "burn out" quicker than when we first started

producing catalogs. This is because of the competition.

Because we are in that many more markets -- we operate in 67 countries worldwide

now -- you have a lot of arms feeding you. The combined effect of that is that

photographers are seeing a return quicker than later.

JP - I have been hearing from some photographers with more than one image

in the Telegraph catalog that it is currently taking about a year before their

catalog fees are paid off and they begin to earn money from their catalog images.

Would you say that is representative.

SM - It could be. Without getting into the detail of the photographer and

the image, it will vary. Obviously, the markets we control (where they have

wholly owned offices) are more receptive to our strategies. Where we deal with

agents, collections can be difficult and the payments can drag out. It can take

longer to get a return.

We have guaranteed out photographers a return in 90 days after a sales report. So

we are, in fact, financing many markets (that take longer to collect and pay). In

some markets, if we get a return in less than 90 days that compensates. But, the

average time does vary tremendously with the photographer, the image, and the

range of images they have in any one catalog.

New Contracts

JP - It is my understanding that earlier this year FPG offered new

contracts to approximately 170 photographers, and it is the agencies intention

to make this group the core of the new FPG. What happens to photographers who

didn't receive a new contract? Will they be asked to leave?

SM - We are not taking new images from the photographers who didn't receive

contracts. If any of these photographers want to leave and want their images back

we will return them. If they want to leave their images in the file they will be

allowed to do so and we will continue to market those images.

JP - What about the number of photographer with the Telegraph? Will you try to

keep that number at about 200?

SM - We don't have a specific goal. We have less than 200 active photographers

working in Europe currently. Our aim is to work with a limited number of the best

photographers in both the U.S. and Europe.

Payment for Foreign Sales

JP - Can you explain why you are having trouble paying photographers on

time for foreign sales? It is my understanding that FPG photographers receive one

check for domestic and one check for foreign. There was no foreign payment in

September. At that time photographers were told that there was a processing error

and it wouldn't happen again. They were told it would be caught up in October and

indeed the extra payment did come through in October. However, in November there

was no foreign sales payment again.

Photographers in the U.S., particularly, are concerned about what is happening.

It is my understanding that all payments from foreign offices go first to VCG

before going to the agency that supplied the image. The parent agency must wait

until VCG sends them a check before they can pay the photographers. VCG did not

send checks in September and again in November.

SM - Some photographers were paid in both September and November, but we

have had a problem with some of the payments from London not

arriving in New York in time to meet the deadline for the photographer checks being

written and mailed out of New York. This is not an issue of financing. It is a

process problem. All back payments will be made up in December. We have identified

the problem and we will see to it that payments arrive on time in the future.

JP - Thank you.

Copyright © 1998 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 301-251-0720, 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:  


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